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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of Administrative Costs Claimed Under Parts A&B of the Health Insurance for the Aged and Disabled Program - AdminaStar Federal, Indianapolis, Indiana," (A-05-98-00042)

September 7, 1999

Complete Text of Report is available in PDF format (1.52 mb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This final audit report points out that AdminaStar (a Medicare contractor) overstated Medicare administrative costs by $3,111,728 for Fiscal Years 1996 and 1997. The overstated administrative costs consisted of ; overstated pension costs, overstated return on investment costs, excessive executive salary increases, improper deferred compensation and post-retirement health benefit claims, and overstated cost allocations. We recommended a financial adjustment for $3,111,728. The AdminaStar concurred with recommended adjustments totaling $2,449,320.