Administrative Costs Claimed Under Part A of the Health Insurance for the Aged and Disabled Program - Blue Cross of Western Pennsylvania

EXECUTIVE SUMMARY:

This final audit report points out that Blue Cross of Western Pennsylvania claimed approximately $2.2 million in unallowable costs for administering the Medicare Part A program. The unallowable costs consisted of: rental costs of $1,159,389 which were claimed but not incurred; costs of $347,178 for unspecified projects that were not approved by the Health Care Financing Administration (HCFA); credits totaling $687,640 that were due but not used to offset Medicare costs; and $24,321 that was misclassified or based on estimated rather than actual costs. We recommended financial adjustments and procedural improvements. Regional HCFA officials concurred with our findings and recommendations.