Thousands of providers under Medicare Part B are abusing the tax system, officials
from the Government Accountability Office testified today before a Senate Homeland
Security and Governmental Affairs panel.
The report found that more than 21,000 physicians, health professionals and suppliers
that get paid under Medicare Part B had tax debts totaling over $1 billion in 2005. In
addition to tax evasion, many of these individuals bought or owned significant
personal assets, such as multimillion homes, luxury vehicles, and in one case, an
Several of the case studies involved physicians who were sanctioned by their state
medical boards for substandard care of patients or for drug abuse. One physician
attempted to transfer large amounts of money to a country known for state-sponsored
terrorism, testified Gregory Kutz, managing director of the GAOs forensic audits and
special investigations unit.
A special federal tax levy program was established 10 years ago to stop this type of
abuse. Yet, the CMS has failed to implement this program for Medicare Parts A and B,
said the subcommittees Chairman Carl Levin (D-Mich.).
Expressing outrage over the fact that these providers were harming beneficiaries,
CMS Acting Administrator Leslie Norwalk told the panel that the agency was exploring
regulatory options to build better restraints into the system.
Current statutory authority doesnt allow the CMS to deny or revoke provider
enrollment for delinquent tax liabilities, and theres no system in place in which the
Internal Revenue Service notifies the agency of such individuals before processing
their enrollment, she said. -- by Jennifer