Review of CIGNA's Fiscal Year 1996-2001 Medicare Final Administrative Cost Proposals

EXECUTIVE SUMMARY:

The objective of this review was to determine if the costs CIGNA claimed on its Final Administrative Cost Proposals for administering the Medicare Part B and DMERC contracts for the period October 1, 1995 through September 30, 2001 were reasonable, allocable, and allowable for Medicare reimbursement.  We concluded that $370,602 of direct costs were unallowable and $30,690,542 of indirect costs were considered unsupported and set aside for adjudication by the Centers for Medicare and Medicaid Services (CMS).  We recommended financial adjustments and procedural improvements.