Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Pension Costs Claimed for Medicare Reimbursement by Trigon Blue Cross Blue Shield," (A-07-02-03009)

July 16, 2002

Complete Text of Report is available in PDF format (472 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The purpose of this review was to determine the allowability of pension costs claimed for Medicare reimbursement for Fiscal Years (FY's) 1988 through 1999.  For Fiscal Years 1988 through 1999, we determined that Trigon Blue Cross Blue Shield (Trigon) under claimed allowable Medicare pension costs.  During this period, the allowable Medicare pension costs were $2,677,690.  However, Trigon claimed pension costs of $1,379,473 for Medicare reimbursement.  As a result, Trigon did not claim $1,298,217 in allowable pension costs.  This under claim of pension costs was the result of Trigon basing their pension cost calculations on incorrect asset values, and because Trigon neglected to include certain pension contribution amounts on their Final Administrative Cost Proposals (FACPS).  We are recommending Trigon revise its FACPs to reflect the remaining allowable pension costs.  Trigon agreed with our recommendations.