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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicare Contractor's Pension Segmentation Requirements Pennsylvania Blue Shield for the Period Covering January 1, 1992 to December 31, 1997," (A-07-04-00169)

November 5, 2004

Complete Text of Report is available in PDF format (806 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objectives of this review were to determine if Pennsylvania Blue Shield (PBS):  (1) implemented our prior audit recommendation, and (2) complied with the pension segmentation requirements of the Medicare contract while updating Medicare segment assets from January 1, 1992, to December 31, 1997.  We found that PBS implemented the recommendation from the prior audit.  However, PBS did not have adequate controls to ensure that the Medicare segment was identified in accordance with the Medicare contract, and the Medicare segment was not updated in accordance with CAS 412 and 413.  As a result, as of December 31, 1997, PBS understated the Medicare segment assets by $1,214,985.  We recommended that PBS increase the Medicare segment pension assets by $1,214,985 and recognize segment assets of $37,438,341 as of December 31, 1997.