Audit of the Pension Plan at a Terminated Medicare Contractor, Blue Cross and Blue Shield of Kansas City

This report provides you with the results of our review of the Pension Plan at a Terminated Medicare Contractor, Blue Cross Blue Shield of Kansas City (Kansas City). Kansas City was the Medicare contractor for parts of the state of Missouri until the contract was terminated effective October 1, 1991. Under the terms of the contract, any difference between the Medicare segment pension assets and actuarial liability at the time the Medicare segment terminated should be refunded to the Medicare program. We recommend that Kansas City refund $635,984 of excess Medicare pension assets resulting from the termination of their Medicare contract. Kansas City believed that elements of our calculations resulted in an overstatement of the recommended refund.