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Medicaid Providers Owe $791 Million in Taxes, U.S. Says

A patient looks after having her teeth cleaned at a community health center in Colorado. Photographer: John Moore/Getty Images
A patient looks after having her teeth cleaned at a community health center in Colorado. Photographer: John Moore/Getty Images

Aug. 2 (Bloomberg) -- Doctors, dentists and other health providers in three states owed $791 million in back taxes while they collected $6.6 billion in 2009 from Medicaid, the insurance program for the poor, government investigators found.

About 7,000 health providers in Florida, Texas and New York owed back taxes while collecting payments from Medicaid, the U.S.-state coverage plan, the Government Accountability Office, the investigative arm of Congress, said in a report today. Thirty-two of the providers owed more than $1 million and collected more than $1 million in payments, the GAO said, without naming them.

The federal government should prohibit health providers with unpaid taxes from enrolling in Medicaid, said U.S. senators who requested the report.

“People who cheat on their taxes show a clear disregard for the law so they might be more likely to defraud Medicaid, or even harm patients,” U.S. Senator Tom Coburn, a Republican of Oklahoma, said in a statement.

The government’s ability to recoup unpaid taxes from Medicaid health providers is more limited than in Medicare, the insurance program for the elderly. Because Medicare is run entirely by the federal government, the Internal Revenue Service can continuously garnish payments to collect back taxes. Because Medicaid is administered by states, its payments aren’t considered federal and are more difficult to garnish, the GAO said.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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