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elects in and out of the ElderPlace program, thereby rendering
payments to the foster care provider taxable, or nontaxable,
depending only upon who is making the payment, the State or
ElderPlace.
Petitioners' analysis leads them to an incorrect conclusion.
In the situation where an individual eligible for adult foster
home care elects in and then out of the ElderPlace program, the
placement by ElderPlace is terminated, with notice to the
provider according to the contract. If the State assumes
responsibility for care of the individual, the State will then
place the individual; it is placement, not payment, that would
determine the taxability of the payments in petitioners' example.
We find the example cited by petitioners not to be "absurd" but
merely the intended result of the statute as written by Congress.
See Tele-Communications, Inc. & Subs. v. Commissioner, 95 T.C.
495, 507 (1990), affd. 12 F.3d 1005 (10th Cir. 1993).
Although petitioners assert that tax consequences may
negatively affect the medicaid waiver or PACE program by placing
an additional financial burden on ElderPlace and petitioners, or
those similarly situated, we are not at liberty to ignore the
plain wording of section 131. The purpose of medicaid is not to
financially benefit health care providers but to aid patients.
Baptist Hosp. E. v. Secretary of HHS, 802 F.2d 860, 868-869
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