Can Medicaid stop paying tax cheats?

Stethoscope and $5 bills

TEXT OF STORY

KAI RYSSDAL: There was medical news out of Washington today, wrapped up in Medicaid policy: A Senate panel was looking into why the government is making millions of dollars in Medicaid payments to tax cheats -- doctors, hospitals and nursing homes that haven't bothered to pay their federal taxes, but who still expect Uncle Sam to pay up.

Marketplace's Nancy Marshall-Genzer reports.


Nancy Marshall Genzer: Senators today chewed over a new Government Accountability Office study. It concludes that 5 percent of Medicaid providers in seven states owe more than a billion dollars in back taxes. Some live in million-dollar houses and drive luxury cars while receiving Medicaid payments.

Critics say Medicaid -- which provides health care for the poor -- is making deadbeat taxpayers rich.

Leslie Page: Medicaid has become kind of a nice cash cow.

That's Leslie Page with Citizens against Government Waste. She's not the only one who's appalled -- Republican Sen. Norm Coleman of Minnesota thinks he's come up with a solution. He wants to withhold government payments to anyone who owes back taxes. But analysts say it's not that simple.

ALAN SEGAR: The states cut the checks.

That's Boston School of Public Health Professor Alan Segar. He says even though the federal government reimburses states for Medicaid, the states dole out the cash to providers. The IRS says it can't be expected to keep track of that.

Segar: The states don't have easy ways of communicating their payments to different doctors, hospitals and nursing homes to the IRS.

And there's one more problem -- Medicaid officials say if the federal government puts doctors and hospitals under a microscope, they'll start to turn away Medicaid patients.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

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