Review of Medicare Contractor's Pension Segmentation, Pennsylvania Blue Shield

This final audit report points out that Pennsylvania Blue Shield (PBS) omitted Medicare cost centers and misidentified Medicare participants in its calculation of the 1981 Medicare asset fraction. As a result pension assets of the Medicare segment were understated by $616,636 as of January 1, 1986. The PBS' update of the Medicare segment assets to January 1, 1992 understated the assets by an additional $412,751 due to the prior error. We recommended that PBS increase the January 1, 1992 asset base of the Medicare segment by $1,029,387.