Missouri's New Law Takes Tax Refunds Away From Working Missourians
On the heels of Missouri's Governor Matt Blunt slashing the state's Medicaid rolls for approximately 125,000 Missourians, the Missouri republican legislature and Mr. Blunt have sunk a dagger even deeper into the heart of hard working Missourians. If you owe money to a hospital or health care provider and were counting on receiving a tax refund this year, don't count on it.
Missouri House Bill 818 was enacted June 1, 2007 and became law on January 1, 2008. Suprisingly, the bill passed the House with a vote of 106-41, getting bipartisan support. It is likely this part of the bill slipped through the cracks. This new Missouri law allows health care providers to unilaterally seize an uninsured patient's tax refund to collect outstanding medical bills without advance notice to the taxpayer.
This completely ridiculous law effectively makes the state of Missouri a collection agency for hospitals and health care providers. Oh, by the way, if this happens to you, expect to pay more for the same service someone with health care insurance pays. It is common practice that all health care providers charge a reduced or discounted rate to health insurance companies for services to their insureds. However, if you are uninsured, the health care provider charges you the full non-discounted rate. That’s right, the health insurance companies pay less for the same treatment than someone with no insurance and no means to pay for health insurance pays. Isn't this ironic? Talk about gouging the middle and lower class citizens of Missouri!
This new law is codified at RSMo 143.782. However, definitions outlined in Missouri statutes 143.782 to 143.788 give meaning to this new law, or more appropriately, "scheme." Here are the definitions that give context to the statute, which appears in full below:
(1) "Court", the supreme court, court of appeals, or any circuit
court of the state;
(2) "Debt", any sum due and legally owed to any state agency which
has accrued through contract, subrogation, tort, or operation of law
regardless of whether there is an outstanding judgment for that sum,
court costs as defined in section 488.010, RSMo, fines and fees owed, or
any support obligation which is being enforced by the division of family
services on behalf of a person who is receiving support enforcement
services pursuant to section 454.425, RSMo , or any claim for unpaid
health care services which is being enforced by the department of health
and senior services on behalf of a hospital or healthcare provider under
section 143.790;
(3) "Debtor", any individual, sole proprietorship, partnership,
corporation or other legal entity owing a debt;
(4) "Department", the department of revenue of the state of Missouri;
(5) "Refund", the Missouri income tax refund which the department
determines to be due any taxpayer pursuant to the provisions of this
chapter. The amount of a refund shall not include any senior citizens
property tax credit provided by sections 135.010 to 135.035, RSMo, unless
such refund is being offset for a delinquency or debt relating to
individual income tax or a property tax credit; and
(6) "State agency", any department, division, board, commission,
office, or other agency of the state of Missouri, including public
community college district.
Here is the text of Missouri Statute 143.790:
1. Any hospital or healthcare provider who has provided
health care services to an individual who was not covered by a health
insurance policy or was not eligible to receive benefits under the
state's medical assistance program of needy persons, Title XIX, P. L.
89-97, 1965 amendments to the federal Social Security Act,
42 U. S.C. Section 301, et seq., under chapter 208, RSMo, and the health
insurance for uninsured children under sections 208.631 to 208.657,
RSMo, at the time such health care services were administered, and such
person has failed to pay for such services for a period greater than
ninety days, may submit a claim to the director of the department of
health and senior services for the unpaid health care services. The
director of the department of health and senior services shall review
such claim. If the claim appears meritorious on its face, the claim for
the unpaid medical services shall constitute a debt of the department of
health and senior services for purposes of sections 143.782 to 143.788,
and the director may certify the debt to the department of revenue in
order to set off the debtor's income tax refund. Once the debt has been
certified, the director of the department of health and senior services
shall submit the debt to the department of revenue under the set off
procedure established under section 143.783.
2. At the time of certification, the director of the department of
health and senior services shall supply any information necessary to
identify each debtor whose refund is sought to be set off pursuant to
section 143.784 and certify the amount of the debt or debts owed by each
such debtor.
3. If a debtor identified by the director of the department of health
and senior services is determined by the department of revenue to be
entitled to a refund, the department of revenue shall notify the
department of health and senior services that a refund has been set off
on behalf of the department of health and senior services for purposes of
this section and shall certify the amount of such setoff, which shall not
exceed the amount of the claimed debt certified. When the refund owed
exceeds the claimed debt, the department shall send the excess amount to
the debtor within a reasonable time after such excess is determined.
4. The department of revenue shall notify the debtor by certified
mail the taxpayer whose refund is sought to be set off that such setoff
will be made. The notice shall contain the provisions contained in
subsection 3 of section 143.794, including the opportunity for a hearing
to contest the setoff provided therein, and shall otherwise substantially
comply with the provisions of subsection 3 of section 143.784.
5. Once a debt has been setoff and finally determined under the
applicable provisions of sections 143.782 to 143.788, and the department
of health and senior services has received the funds transferred from the
department of revenue, the department of health and senior services shall
settle with each hospital or healthcare provider for the amounts that the
department of revenue setoff for such party. At the time of each
settlement, each hospital or healthcare provider shall be charged for
administration expenses which shall not exceed twenty percent of the
collected amount.
6. Lottery prize payouts made under section 313.321, RSMo, shall also
be subject to the set off procedures established in this section and any
rules and regulations promulgated thereto.
7. The director of the department of revenue shall have priority to
offset any delinquent tax owed to the state of Missouri. Any remaining
refund shall be offset to pay a state agency debt or to meet a child
support obligation that is enforced by the division of family services on
behalf of a person who is receiving support enforcement services under
section 454.425, RSMo.
8. The director of the department of revenue and the director of the
department of health and senior services shall promulgate rules and
regulations necessary to administer the provisions of this section. Any
rule or portion of a rule, as that term is defined in section 536.010,
RSMo, that is created under the authority delegated in this section shall
become effective only if it complies with and is subject to all of the
provisions of chapter 536, RSMo, and, if applicable, section 536.028,
RSMo. This section and chapter 536, RSMo, are nonseverable and if any of
the powers vested with the general assembly pursuant to chapter 536,
RSMo, to review, to delay the effective date, or to disapprove and annul
a rule are subsequently held unconstitutional, then the grant of
rulemaking authority and any rule proposed or adopted after August 28,
2007, shall be invalid and void.
If you study the language of this statute, you will quickly realize the Republican Missouri representatives, senate and Governor Blunt are making times harder and harder for hard working Missouri families- not better.
If you find this statute to be unacceptable, write your representative, senator or better yet call Governor Blunt's office at (573) 751-3222. Then, go to the next Missouri governor's web site, Jay Nixon and make a campaign contribution.
