Dumb Government: Medicaid Providers, Go Ahead Take Our Money, but Don’t Worry About Paying Your Taxes.

Back in the Clinton/Gore years there was at least an effort made to reinvent government and make it more efficient. I'm proud to say our Portland Multifamily staff led the way in HUD with our FastTrack program that cut red tape and processing time for apartment developers and HUD staff alike, and offered a money back guarantee of timely loan processing.

Yesterday, I read a news story and today I read the GAO report on unpaid federal tax liabilities of an estimated 30,000 Medicaid providers [NOT patients]. The full GAO report is HERE.

This excerpt from the report indicate how DUMB GOVERNMENT can sometimes be:

[Medicaid].."officials stated that such a requirement for screening potential providers for unpaid taxes could adversely impact states' ability to provide health care to low income people. Further, federal law generally prohibits the disclosure of taxpayer data to CMS and states. No tax debt owed by Medicaid providers has ever been collected through the continuous levy program. During our audit, IRS had not made a determination on whether Medicaid payments are considered ''federal payments'' and thus eligible for its continuous levy program. For fiscal year 2006, if an effective levy was in place for the seven selected states, GAO estimates that the federal government could have collected between $70 million and $160 million?"

The report notes later that the IRS has concluded, 10 years after passage of legislation authorizing the continuous levy program to collect taxes owed that

".. Medicaid disbursements do not qualify as federal payments and therefore cannot be incorporated in the continuous levy program".

Press reports in the past have indicated there may be a $400 billion gap in real tax liabilities vs. actual tax collections. So it may be that IRS feels it has far bigger non compliance than the $1 billion loss suggested by the report.

Right now the President is posturing about federal domestic spending and recently vetoed a SCHIP expansion where ultimately the cost difference will turn out to be in the range of $5 billion.

To the President and Congress ---Stop being so DUMB.

Why not use an immediate Congressional appropriations clarification that medicaid payment ARE included as "federal payments" to help fill at least part of that difference in the SCHIP funding?