The objective of our review was to determine the allowability of Medicare Part A pension costs claimed by Oregon for Medicare reimbursement for fiscal year (FY) 1996. We found that Oregon failed to claim $136,186 of allowable Medicare Part A pension costs due to an adjustment made to pension costs from an administrative cost audit. Oregon claimed $25,552 of pension costs for Medicare reimbursement; however, we calculated the allowable Medicare pension costs during this period to be $161,738. We recommended that Oregon revise its Final Administrative Cost Proposal to claim the allowable Medicare Part A CAS pension costs of $136,186 for FY 1996. Oregon agreed with our recommendation.