Wisconsin Physicians Service Insurance Corporation Claimed Unallowable Medicare Part A Administrative Costs for Fiscal Year 2012

Wisconsin Physicians Service Insurance Corporation (WPS) claimed $1.2 million in unallowable administrative costs on its Medicare Part A final administrative cost proposals (FACPs) for fiscal year 2012. We recommended that WPS reduce its FACPs by $1.2 million to eliminate the unallowable costs identified and improve procedures to identify allowable and unallowable costs in accordance with the applicable Medicare contract, Cost Accounting Standards (CAS), and FAR provisions. In written comments on our draft report, WPS did not concur with $1.2 million in recommended reductions related to unallowable residual home office expenses, employee incentive program bonuses and related taxes, and salary allocations. WPS provided limited comments on our recommendation for procedural improvements. We maintain that all of our findings and recommendations are valid.