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 1996–2004," (A-07-07-00235)
October 19, 2007
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) 1996–2004. We found that South Carolina overclaimed
$1,847,056 in accrued Excess Plan costs
for FYs 1996–2004 because it improperly determined costs based on accrual
We recommended that South Carolina revise its Final Administrative Cost Proposals for FYs 1996–2004 for Palmetto and FYs 2000–2004 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.