Review of Pension Costs Claimed for Medicare Reimbursement by The Regence Group for Fiscal Years 1997 Through 2006

The Regence Group (Regence), a Centers for Medicare and Medicaid Services contractor, underclaimed $260,000 of Medicare pension costs on its Oregon and Common Working File (CWF) Final Administrative Cost Proposals (FACP) for fiscal years (FY) 1997'2006.  Regence also underclaimed $665,000 of Medicare pension costs on its Utah FACPs for FYs 1998'2006.  Regence administered both Medicare Part A and Part B operations under cost reimbursement contracts with CMS until the contractual relationship was terminated November 30, 2005. 

We recommended that Regence (1) revise its Oregon and CWF FACPs for FYs 1997'2006 to claim the additional allowable pension costs of $260,000 and (2) revise its Utah FACPs for FYs 1998'2006 to claim the additional allowable pension costs of $665,000. Regence concurred with the audit results but stated that the '. . . scope of this audit is limited to the Medicare Part A and Part B cost reimbursement contracts that terminated on November 30, 2005 and does not include the Oregon Medicare Data Center contract which terminated on December 31, 2006.'