Department of Health and Human Services

Office of Inspector General -- AUDIT

"Administrative Costs Incurred Under Parts A and B of the Health Insurance for the Aged and Disabled Program - Arkansas Blue Cross and Blue Shield, Little Rock, Arkansas," (A-06-03-00013)

October 14, 2003

Complete Text of Report is available in PDF format (825 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this audit was to determine whether the final administrative cost proposals fairly presented the costs of program administration.  Of the $234,056,106 in administrative costs claimed by Arkansas Blue Cross Blue Shield (Blue Cross) during fiscal years 1999 - 2002, we determined that a financial adjustment of $689,546 was necessary and that an additional $70,202 needed to be set aside for lack of documentation.  We recommended that the remaining $233,296,358 be accepted for reimbursement.  Blue Cross concurred with $624,952 of our recommended financial adjustments and disagreed with all of the $70,202 of set aside costs.