Estimated 30,000 Medicaid providers owe back taxes

The Senate Permanent Subcommittee on Investigations wants to know why more than 30,000 Medicaid providers, including doctors and others in the health care field, "owe at least $1 billion in back taxes and still receive federal payments for their services." (Source: "Some Medicaid providers owe back taxes," Associated Press, Nov. 14, 2007.) A recent Government Accountability Office (GAO) report "noted that federal law does not prevent health care providers who owe back taxes from enrolling in Medicaid. It said that officials from the Centers for Medicare and Medicaid Services, the federal agency that administers the program, said such a requirement could make it harder for states to provide health care to poor people."

According to the GAO, if the IRS had a system to levy part of the Medicaid payments, it could have collected between $70 million and $160 million last year. But since the IRS does not count Medicaid payments as "federal payments," they are "not subject to continuous levy."