Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicare Contractor’s Pension Segmentation, CareFirst of Maryland," (A-07-02-03033)

May 30, 2003


Complete Text of Report is available in PDF format (1.1 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


EXECUTIVE SUMMARY:

This final audit report points out that CareFirst of Maryland, a Medicare contractor, understated Medicare segment pension assets by $6.8 million as of January 1, 2002.  This occurred because CareFirst; (1) made an improper reallocation of pension assets on January 1, 1996 ($4.3 million understatement), (2) incorrectly identified benefit payments ($0.1 million overstatement), and (3) used an incorrect asset base in calculating earnings and expenses ($2.6 million understatement).  We recommended that CareFirst increase its Medicare segment assets by $6.8 million as of January 1, 2002.  CareFirst concurred with our recommendation.