Highmark Medicare Services, Inc., Claimed Some Unallowable Medicare Pension Costs for Fiscal Years 2003 Through 2009

Highmark Medicare Services, Inc. (Highmark), a Centers for Medicare & Medicaid Services contractor, claimed approximately $1.1 million of unallowable Medicare pension costs for reimbursement during fiscal years (FYs) 2003 through 2009. Highmark claimed these unallowable Medicare pension costs primarily because it based its claim for Medicare reimbursement on incorrectly calculated Cost Accounting Standards pension costs.

We recommended that Highmark revise its Final Administrative Cost Proposals for FYs 2003 through 2009 to reduce its claimed Medicare pension costs by approximately $1.1 million. In written comments on our draft report, Highmark did not directly address our recommendation. However, it is clear from the comments that Highmark did not agree with our recommendation to reduce its claimed Medicare pension costs by approximately $1.1 million.