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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Excess Plan Costs Claimed by Blue Cross Blue Shield of South Carolina for Medicare Reimbursement for Fiscal Years 19962004," (A-07-07-00235)

October 19, 2007

PDF File Complete Text of Report is available in PDF format (375 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) administers Medicare Part A and Part B operations in its Palmetto Government Benefit Administrators (Palmetto) and TrailBlazer Health Enterprises (TrailBlazer) subsidiaries under cost reimbursement contracts with the Centers for Medicare & Medicaid Services.  Our objective was to determine the allowability of the Excess Plan costs that South Carolina claimed for Medicare reimbursement for fiscal years (FY) 19962004.  We found that South Carolina overclaimed $1,847,056 in accrued Excess Plan costs for FYs 19962004 because it improperly determined costs based on accrual accounting.

We recommended that South Carolina revise its Final Administrative Cost Proposals for FYs 19962004 for Palmetto and FYs 20002004 for TrailBlazer to reduce claimed Excess Plan costs by $1,847,056.  In written comments on our draft report, South Carolina did not directly address our recommendation.