Convoluted Tax Schemes
Wisconsin Governor Jim Doyle has a plan to give more money to hospitals. It's very simple -- in order to pay them more, he first has to tax them more. The Wisconsin State Journal gave a breakdown of the plan:
It works like this: The state imposes the tax on hospitals, leading to an increase in the cost of providing health services. The state returns the money raised by the tax to hospitals to help cover the costs of providing care to Medicaid patients. Then the state reports the increased costs of Medicaid to the federal government, which in turn increases its reimbursement to the state.
The state can then use the extra money for health care or other programs.
I'm reasonably certain that any private doctor, trying to increase Medicaid reimbursements this way, would be prosecuted for Medicaid fraud. Why are states are allowed to get away with such blatant fraud? Wisconsin isn't the only state doing this, but it might be one of the last:
"We have, as a state, been much less aggressive than other states in the use of these assessments," said Jason Helgerson, executive assistant and policy director for the Department of Health and Family Services.
Hospital executives say they understand why states are imposing such taxes. But they said the federal government is catching on to what states are doing and federal rules changes could limit Medicaid reimbursements and render the taxation strategy ineffective for states.
This whole scenario is a perfect example of government inefficiency and waste. Whatever faults private insurance might have, this kind of chicanery isn't it.