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

This report provides the results of our review titled, "Review of Pension Costs Claimed for Medicare Reimbursement by Blue Cross and Blue Shield of North Dakota." The purpose of our review was to determine the allowability of pension costs claimed for Medicare reimbursement for Fiscal Years 1992 through 1998. We determined that North Dakota overclaimed allowable Medicare pension costs for 1992 through 1998. During this period, the allowable Medicare pension costs were $3,200,126. However, North Dakota claimed pension costs of $3,216,989 for Medicare reimbursement. As a result, North Dakota has claimed $16,863 in pension costs that are not allowable. The overclaim occurred because the pension costs claimed exceeded the funded portion of the Cost Accounting Standards (CAS) computed pension costs. We recommend that North Dakota revise its Final Administrative Cost Proposals (FACPs) to eliminate the unallowable pension costs.