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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicare Contractor's Pension Segmentation, Blue Cross and Blue Shield Association," (A-07-98-02527)

March 10, 1999


Complete Text of Report is available in PDF format (669 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

EXECUTIVE SUMMARY:

This final report provides the results of our review of Medicare Contractor's Pension Segmentation, Blue Cross and Blue Shield Association. Our review showed that the Association overstated Medicare segment assets as of January 1, 1994 by $57,343. The overstatement occurred because the Association did not implement the recommendations of our prior segmentation audit report. The Association update of the Medicare segment assets from 1994 to 1997 overstated segment assets by an additional $349,700. The overstatement occurred primarily because the Association used incorrect participant data in their update of pension assets, and computed transfer adjustments for 1996 using an incorrect actuarial liability. We recommend that the Association decrease the January 1, 1997 assets of the Medicare segment by $407,043 ($57,343 plus $349,700). The Association accepted our recommendation.