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

EXECUTIVE SUMMARY:

The purpose of this review was to determine the allowability of pension costs claimed for Medicare reimbursement for Fiscal Years (FYs) 1987 through 1999.   For FYs 1987 through 1999, we determined that Blue Cross Blue Shield of Minnesota (Minnesota) over claimed Medicare pension costs.   During this period, the allowable Medicare pension costs were $7,108,225.  However, Minnesota claimed pension costs of $7,658,308 for Medicare reimbursement.  As a result, Minnesota over claimed pension costs by $550,083.  This over claim of pension costs was the result of Minnesota basing their pension cost calculations on incorrect asset values.  We recommended Minnesota remit $550,083 to the Federal Government.  Minnesota agreed with our finding and recommendation.