Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of the Post Retirement Benefit Costs Claimed by Wellmark, Inc.," (A-07-02-03035)

February 21, 2003


Complete Text of Report is available in PDF format (951 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


EXECUTIVE SUMMARY:

The purpose of this review was to determine the allowability of $717,106 in post retirement benefit (PRB) costs claimed for Medicare reimbursement by Wellmark, Inc. (Wellmark).  The $717,106 represents PRB costs that will be incurred subsequent to the termination of Wellmark’s Medicare contract.  The review showed that the claimed costs are unallowable for Medicare reimbursement and we recommend that Wellmark withdraw the claim.  Wellmark disagreed with our report, asserting that the application of prior unclaimed administrative costs (approximately $1.8 million) offsets our recommendation to withdraw the claim for PRB costs.