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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Pension Costs Claimed for Medicare Reimbursement by Independence Blue Cross," (A-07-01-03003)

February 26, 2002

Complete Text of Report is available in PDF format (2.95 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This report provides the results of an Office of Inspector General (OIG), Office of Audit Services (OAS) review titled "Review of Pension Costs Claimed for Medicare Reimbursement by Independence Blue Cross."  The purpose of our review was to determine the allowability of pension costs claimed for Medicare reimbursement for Fiscal Years 1987 through 1997. During this period, the allowable Medicare pension costs were $2,150,995.  However, Independence Blue Cross (IBC) claimed pension costs of $1,051,012 for Medicare reimbursement.  As a result, IBC did not claim $1,099,983 in allowable pension costs.  This under claim of pension costs primarily occurred because IBC neglected to include certain pension contribution amounts on their Final Administrative Cost Proposals (FACPs).  We recommended IBC revise its FACPs to reflect the remaining allowable pension costs.  While IBC agreed that any costs not claimed per its identification of the Medicare segment would be reimbursable, it did not agree with our identification of the segment.