GAO: Some healthcare providers don't pay taxes but still collect Medicare

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A total of 6%, or roughly 27,000 of all Medicare providers—including nursing homes—collected Medicare reimbursements in 2006 while owing a collective total of more than $2 billion in back-taxes, the Government Accountability Office said recently.

Sens. Carl Levin (D-MI) and Norm Coleman (R-MN), both of the Government Affairs subcommittee on investigations, are conducting inquiries into why some  government contractors continue to receive federal funds despite not having paid their taxes. The report uncovered some heinous abuses of the system, including a nursing home owner who received $15 million in Medicare claims and established a charitable organization, one function of which was to purchase luxury cars for the owner.

To complicate matters, says the report, the federal government does not generally release tax information to CMS or its affiliates, making it difficult to hold some providers accountable. The GAO recommends issuing guidance to Medicare contractors to help identify and investigate tax-delinquent providers and using those investigations to determine whether such providers should be enrolled in the Medicare system.

To view the report, visit