WASHINGTON – Criticized for allowing Medicare providers to abuse the tax system to the tune of more than $1.3 billion, the Department of Health and Human Services (HHS) is answering back.
HHS is working with the Department of Treasury and Internal Revenue Service on separate programs to address weaknesses cited by a recent Government Accountability Office (GAO) report that spurred a March 20 Senate subcommittee hearing.
The report accused HHS of ignoring the GAO’s recommendation, back in 2001, to integrate its computer systems with the IRS and Treasury Department.
“HHS is working in partnership with the Department of Treasury and the IRS to implement the most effective means of matching data to ensure that tax cheats are not paid,” answered Jeff Nelligan, director of media affairs for the Centers for Medicare and Medicaid Services.
Currently, Medicare subjects approximately $110 billion per year, mostly for managed care and Part D plans, to continuous levy.
“Subjecting the remaining $292 billion in payments (largely for fee-for-service providers) to levy will require significant systems and business process investments on the part of both Treasury and HHS,” Nelligan said. “Treasury and HHS are committed to having a plan to do this by the end of the year.”
Nelligan pointed out that HHS’ partnership with law enforcement has been effective. In a pilot project, HHS secured three convictions and $100 million in savings to Medicare in Los Angeles County this year. HHS is working with the IRS and the Department of Justice to expand the program nationwide.
While the office of Senator Carl Levin (D-Mich.), chairman of the subcommittee, declined to comment, he is advocating for the application of the Federal Payment Levy Program.
“This Subcommittee has been involved in an intensive effort to strengthen the tax levy program in order to withhold funds from federal payments made to federal contractors who don’t pay their taxes,” he said at the hearing.