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

The purpose of our review was to determine the allowability of pension costs claimed for Medicare reimbursement for Fiscal Years 1987 through 1999.  For Fiscal Years 1987 through 1999, Blue Cross and Blue Shield of Oklahoma (Oklahoma) under claimed allowable Medicare pension costs.  During this period, the allowable Medicare pension costs were $926,822.  However, Oklahoma claimed pension costs of $884,359 for Medicare reimbursement.  As a result, Oklahoma did not claim $42,463 in allowable pension costs.  This under claim of pension costs was the result of Oklahoma basing their pension cost calculations on incorrect asset values, and not adjusting budgeted costs to actual costs for indirect Medicare operations.  We recommended that Oklahoma revise its Final Administrative Costs Proposals to reflect the remaining allowable pension costs.