American Samoa's LBJ Hospital is reported to have unpaid debts of almost seven million US dollars.
In a report presented to the Senate by LBJ officials, the hospital said it had forecast revenues from the medical insurance company, Medicare, of more than seven million.
But Medicare audited accounts for the fiscal years 1999 to 2002 and discovered they had been billed for costs not covered by the insurance.
As a result it reduced payments for this year by the amount outstanding, some three million US dollars.
The debts owed by the hospital include one point seven million to the Internal Revenue Service and more than half a million to the American Samoa government.
Two officials from the US Revenue Service are now in American Samoa to try to resolve the federal tax situation.