Review of Blue Cross and Blue Shield of Georgia, Inc.'s Medicare Final Administrative Cost Proposals for the Period October 1, 2006, Through May 4, 2009

Most of the administrative costs claimed on Blue Cross and Blue Shield of Georgia, Inc.'s Medicare Final Administrative Cost Proposals for October 1, 2006, through May 4, 2009, were allowable for Medicare reimbursement. Of the $24.7 million in administrative costs reviewed, $24.3 million was allowable for Medicare reimbursement under the Part A contract. However, the remaining $403,000 was not. Of this amount, $245,000 was unallowable for Medicare reimbursement because Blue Cross and Blue Shield of Georgia, Inc. did not have adequate policies and procedures to ensure that these costs were adequately supported and allocated to the Medicare Part A contract in compliance with applicable Federal regulations and CMS guidance. We set aside the remaining $158,000 for CMS adjudication because it consisted of termination costs, which, under CMS guidance, should have been claimed on termination cost vouchers.