Review of Medicare Part A Administrative Costs Claimed By Horizon Blue Cross Blue Shield of New Jersey for the Period October 1, 1997 through July 31, 2000

EXECUTIVE SUMMARY:

The objective of our review was to determine whether administrative costs claimed by Horizon Blue Cross Blue Shield of New Jersey (Horizon) on its Medicare Part A Final Administrative Cost Proposals (FACP) covering the period October 1, 1997 through July 31, 2000 were allowable, allocable and reasonable.  We found that Horizon's reported administrative costs included  $12,000 of employee training costs for services that did not benefit Medicare, and  $1,651 of excessive executive salaries and fringe benefits.  We recommended that costs claimed by Horizon for the period October 1, 1997 through July 31, 2000 be reduced by $13,651.