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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Nonqualified Defined-Benefit Pension Plan Costs Claimed by Highmark, Inc. for Fiscal Years 1998 Through 2002," (A-07-06-00202)

January 20, 2006


Complete Text of Report is available in PDF format (308 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


EXECUTIVE SUMMARY:

Our objective was to determine the allowability of nonqualified defined-benefit pension plan (NQDBP) costs Highmark claimed for Medicare reimbursement for fiscal years (FY) 1998 through 2002. Highmark claimed $122,780 of unallowable NQDBP costs for FYs 1998 through 2002 because it did not update the Medicare segment assets in accordance with the Medicare contract, which resulted in a difference in allocable pension costs. During FYs 1998 through 2002, the allowable NQDBP costs were $667,902; however, Highmark claimed NQDBP costs of $790,682 for Medicare reimbursement. We recommended that Highmark revise its Final Administrative Cost Proposals (FACP) for FYs 1998 through 2002 to reduce its claimed NQDBP costs by $122,780. Highmark agreed with our recommendation.