Review of Pension Costs Claimed for Medicare Reimbursement by Trigon Blue Cross Blue Shield

The purpose of this review was to determine the allowability of pension costs claimed for Medicare reimbursement for Fiscal Years (FY's) 1988 through 1999.  For Fiscal Years 1988 through 1999, we determined that Trigon Blue Cross Blue Shield (Trigon) under claimed allowable Medicare pension costs.  During this period, the allowable Medicare pension costs were $2,677,690.  However, Trigon claimed pension costs of $1,379,473 for Medicare reimbursement.  As a result, Trigon did not claim $1,298,217 in allowable pension costs.  This under claim of pension costs was the result of Trigon basing their pension cost calculations on incorrect asset values, and because Trigon neglected to include certain pension contribution amounts on their Final Administrative Cost Proposals (FACPS).  We are recommending Trigon revise its FACPs to reflect the remaining allowable pension costs.  Trigon agreed with our recommendations.