Tags: Medicaid Tax Delinquents

Govt Report: Tax Cheats Getting Paid by Medicaid

Thursday, 02 Aug 2012 06:08 AM

Congressional investigators say thousands of Medicaid health care service providers still got paid by the government even though they owed hundreds of millions of dollars in federal taxes.

A legal technicality is making it harder for the IRS to collect.

In a report out Thursday, the Government Accountability Office says one dentist who received more than $100,000 from Medicaid while owing back income taxes was spending lavishly on fine dining, trips, spas, shopping and wine.

Medicaid payments to doctors, hospitals and other providers aren't technically considered federal funds, since they're funneled through state health care programs.

Because of that loophole, the IRS can't just shut off the payment spigot to collect tax debts. Investigators only looked at three states, so the true extent of the losses is greater.

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