Audit of Administrative Costs Claimed Under Parts A&B of the Health Insurance for the Aged and Disabled Program - AdminaStar Federal, Indianapolis, Indiana

This final audit report points out that AdminaStar (a Medicare contractor) overstated Medicare administrative costs by $3,111,728 for Fiscal Years 1996 and 1997. The overstated administrative costs consisted of ; overstated pension costs, overstated return on investment costs, excessive executive salary increases, improper deferred compensation and post-retirement health benefit claims, and overstated cost allocations. We recommended a financial adjustment for $3,111,728. The AdminaStar concurred with recommended adjustments totaling $2,449,320.