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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Postretirement Benefit Costs Claimed for TrailBlazer Health Enterprises for Medicare Reimbursement by Blue Cross Blue Shield of South Carolina for Fiscal Years 2000 Through 2004," (A-07-07-00229)

December 28, 2007

PDF File Complete Text of Report is available in PDF format (443 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


Blue Cross Blue Shield of South Carolina (South Carolina) overclaimed TrailBlazer Health Enterprisesís (TrailBlazer) accrued postretirement benefit (PRB) costs on the final administrative cost proposals (FACP) for fiscal years (FY) 2000 through 2004.  We determined that the allowable accrued PRB costs for this period were $2,355,247.  However, South Carolina claimed accrued PRB costs of $4,045,529 on the FACPs because it did not compute PRB costs in accordance with its Medicare contract and an agreement with the Centers for Medicare & Medicaid Services.  As a result, South Carolina overclaimed $1,690,282 in accrued PRB costs for FYs 2000 through 2004.

We recommended that South Carolina revise TrailBlazerís FACPs for FYs 2000 through 2004 to reduce its claimed PRB costs by $1,690,282.  We also recommended that South Carolina claim future PRB costs in accordance with the Medicare contract.  South Carolina did not concur with our recommendations.