Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Excess Benefit Plan Costs Claimed by CIGNA for Medicare Reimbursement for Fiscal Years 1991 Through 2004," (A-07-06-00215)

October 2, 2006

PDF File Complete Text of Report is available in PDF format (258 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 excess benefit plan (EBP) costs claimed by CIGNA for Medicare reimbursement for fiscal years (FYs) 1991 through 2004. We found that CIGNA claimed unallowable EBP costs for FYs 1991 through 2004. During this period, the allowable EBP costs were $213,630. However, CIGNA claimed EBP costs of $329,296 for Medicare reimbursement. CIGNA claimed $115,666 of unallowable EBP costs because it did not claim EBP costs in accordance with the Cost Accounting Standards (CAS). 

We recommended that CIGNA revise its final administrative cost proposals for FYs 1991 through 2004 to reduce its claimed EBP costs by $115,666. We also recommend that CIGNA claim future EBP costs in accordance with the CAS. CIGNA concurred with our findings and stated that it will be working with CMS to settle the $115,666 owed.