Blue Cross and Blue Shield of North Carolina Pension Costs Claimed for Medicare Reimbursement

The purpose of this review was to determine the allowability of pension costs claimed for Medicare reimbursement for Fiscal Years 1992 through 2001 by Blue Cross and Blue Shield of North Carolina.  For this period, we determined that North Carolina under claimed allowable Medicare pension costs by $872,735.  The allowable Medicare pension costs were $3,666,767.  However, North Carolina claimed pension costs of $2,794,032 for Medicare reimbursement.  This under claim was the result of North Carolina making erroneous adjustments to the retirement account and not including indirect costs in the earlier years.  We recommended that North Carolina revise its Final Administrative Cost Proposals for FYs 1992 through 2002 to claim additional allowable pension costs of $872,735.