Review of Medicare Contractor's Pension Segmentation, Blue Cross and Blue Shield of North Dakota

This report provides the results of our review titled, "Review of Medicare Contractor's Pension Segmentation, Blue Cross and Blue Shield of North Dakota." The purpose of our review was to evaluate Blue Cross and Blue Shield of North Dakota's (North Dakota) compliance with pension segmentation requirements of its Medicare contract. Our review showed that North Dakota understated its January 1, 1992 Medicare segment assets by $180,634. The understatement occurred because North Dakota did not implement our recommendations from a prior audit report. However, North Dakota's update of the Medicare segment assets from January 1, 1992 to January 1, 1998 overstated segment assets by $1,529,366. The overstatement primarily occurred because North Dakota did not make correct transfer adjustments. We recommend that North Dakota decrease the January 1, 1998 assets of the Medicare segment by $1,348,732 ($1,529,366 less $180,634).