Review of Pension Costs Claimed for Medicare Reimbursement by Blue Cross and Blue Shield of Nebraska

This final report provides the results of our review of Pension Costs claimed for Medicare Reimbursement by Blue Cross and Blue Shield of Nebraska (Nebraska). We determined that Nebraska claimed pension costs for 1987 through 1994 that are unallowable for Medicare reimbursement. During this period, the allowable Medicare pension costs were $73,844. However, Nebraska claimed pension costs of $79,919 for Medicare reimbursement. As a result, Nebraska claimed $6,075 in pension costs that were unallowable. The over claim occurred primarily because Nebraska did not base its claim on separately computed cost accounting Standards (CAS) pension costs for the Medicare segment. We recommended Nebraska revise its Final Administrative Cost Proposals to eliminate the unallowable pension costs. We also recommended that Nebraska base future claims for Pension costs on separately compound CAS costs for the Medicare segment. Nebraska accepted our recommendation.