Review of Medicare Part A Administrative Costs Fiscal Years 1996 - 1997 Independence Blue Cross Philadelphia, Pennsylvania

EXECUTIVE SUMMARY:

This audit report presents the results of an Office of Inspector General (OIG) review of administrative costs claimed by Independence Blue Cross (IBC) for the administration of the Medicare Part A program for Fiscal Years (FYs) 1996 and 1997 (October 1, 1995 - September 30, 1997).  During this period, IBC booked and claimed a total of $24,610,539 in Medicare administrative costs.  We found that IBC claimed $4,644,602 in questioned costs including $4,146,905 in excess costs claimed over approved budgets and $497,697 in unfunded transition costs.  We did not make any procedural recommendations since IBC opted to discontinue the Medicare Part A program.   We recommended that IBC coordinate with CMS to reduce the costs claimed by $4,644,602.