Post Retirement Benefit Costs Claimed by Blue Cross and Blue Shield of Michigan

EXECUTIVE SUMMARY:

This report provides the results of an Office of Inspector General (OIG), Office of Audit Services (OAS) review titled Post Retirement Benefit Costs Claimed by Blue Cross and Blue Shield of Michigan . The purpose of our review was to determine the allowability of $8,979,998 in post retirement benefit (Post Retirement) costs claimed for Medicare reimbursement by Blue Cross and Blue Shield of Michigan (Michigan). The $8,979,998 represents Post Retirement costs that will be incurred subsequent to the termination of Michigan's Medicare contracts. The review showed that the claimed costs are unallowable for Medicare reimbursement and we recommend that Michigan withdraw the claim.

Michigan disagrees with our recommendation and maintains that the Health Care Financing Administration (HCFA) is responsible for reimbursing Post Retirement costs attributable to Michigan's administration of Medicare.