Audit of Medicare Administrative Costs Claimed Under Medicare Part B for Empire Blue Cross Blue Shield

EXECUTIVE SUMMARY:

Empire Blue Cross Blue Shield (Empire) contracts with the Health Care Financing Administration to serve as a Medicare Part B carrier in New York State. During the period of our audit, October 1, 1984 through September 30, 1989, Empire processed approximately 94 million claims, paid about $7 billion in Part B benefits, and claimed around $216 million in administrative costs. We determined that $2,533,711 of the $216,562,200 administrative costs claimed by Empire were unallowable.