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Audit (A-07-11-03166)

04-12-2012
Most of Mutual of Omaha's Medicare Administrative Costs Reported for Fiscal Years 2007 and 2008 Were Allowable

Executive Summary

Mutual of Omaha Insurance Company (Mutual) reported Medicare administrative costs that substantially complied with Federal regulations and the Medicare contract. However, Mutual reported, on the Final Administrative Cost Proposals, $67,000 that was not allowable. In addition, the Federal Government did not receive a refund or credit for its equitable share of gains from Mutual's 401(k) pension plan, due to unvested forfeitures, for fiscal years 1989 through the termination of the contract on November 5, 2007. Mutual did not have a process to identify which employees were unvested in order to calculate and refund or credit the Federal Government. As a result, Mutual did not refund, or credit to the Federal Government, 401(k) pension plan gains, due to unvested forfeitures, totaling $556,000.

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