Medical bills paid directly (gift tax exclusion)

Money paid straight to a hospital, doctor or other provider for someone else's medical care is not a gift for US gift tax, whatever the amount, and is not reported on Form 709 (26 U.S.C. §2503(e)). It has to go to the provider: sending the money to the patient, who then pays the bill, is an ordinary gift that counts toward the annual exclusion.