Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Pension Costs Claimed for Medicare Reimbursement by Arkansas Blue Cross Blue Shield for Fiscal Years 1997 Through 1998," (A-07-06-00208)

March 29, 2007

PDF File Complete Text of Report is available in PDF format (317 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

EXECUTIVE SUMMARY:

The objective of our review was to determine the allowability of pension costs that Arkansas claimed for Medicare reimbursement for fiscal years (FY) 1997 through 1998. Arkansas claimed $126,636 of unallowable Medicare pension costs for FYs 1997 through 1998 primarily because of the use of the Financial Accounting Standard No. 87 expense for the calculation of the "Other" segment allowable pension costs. Arkansas claimed $2,454,110 of pension costs for Medicare reimbursement; however, we calculated the allowable Medicare pension costs during this period to be $2,327,474. We recommended that Arkansas revise its Final Administrative Cost Proposals for FYs 1997 through 1998 to reduce its claimed pension costs by $126,636. Arkansas agreed with our recommendation.