Editorial: Paying tax dodgers?

Friday, March 23, 2007 | 6:56 a.m.

A government audit shows that more than 21,000 health care providers, most of them doctors, owe a total of more than $1.3 billion in unpaid federal income and payroll taxes, yet continue to receive their full federal Medicare reimbursements.

A report released Tuesday by the Government Accountability Office, the investigative arm of Congress, says "many of these individuals accumulated substantial wealth and assets, including million-dollar houses and luxury vehicles, while failing to pay their federal taxes." One physician, whose hospital privileges had been revoked because of substandard care and who owed nearly $1 million in delinquent taxes, still received more than $100,000 in Medicare reimbursements, the GAO reports.

The Internal Revenue Service may seize up to 100 percent of federal payments made to a government contractor who has unpaid federal taxes - such as a doctor who is reimbursed through Medicare - until the tax bill is paid. But the Department of Health and Human Services, which administers Medicare, has no regulations or policies that require determining whether a health care professional has an outstanding tax debt before making Medicare payments, the GAO says. As a result, the government is owed a staggering debt when the government is struggling to cover Medicare costs.

The GAO is continuing its examination and may issue recommendations for improving the system later this year. But Congress should not wait. Lawmakers should demand to know why Medicare has been allowed to continue paying health care professionals who are earning generous incomes while ducking their tax bills. Other delinquent taxpayers can face fines, wage garnishment and prison time. Congress should put an end to this outrageous free ride.