Medicare providers could face up to 100% late tax penalties

Praise for Congress for proposing a bill that would reset Medicare physician pay rates could be a little less hearty, after details emerged Tuesday that the measure would also include penalties as high as 100% for providers delinquent with income tax payments.

Thousands of Medicare providers are late paying their income taxes every year, according to the Government Accountability Office.

The House could take important action on the bill later this week, according to published reports.

Under a key provision, the Internal Revenue Service would be allowed to impose late tax penalties as high as double the amount of the back taxes, which would reduce the offenders' Medicare reimbursement checks. Current law sets the ceiling at 15%.

The GAO said Medicare providers were late on about $2 billion in income taxes in 2008. This most recent provision is just the latest in a series of efforts to fund government programs with severe IRS income penalties on providers, according to Bloomberg News services. A 2012 bill would have generated $841 million from 2014 to 2024, including $379 million from 2014 to 2019, to be used for highway programs.