Audit of Blue Cross Blue Shield of North Carolina's Claim for Post Retirement Benefits Costs to be Incurred After Termination of Its Medicare Contract and Closing of Its Medicare Segment

EXECUTIVE SUMMARY:

The objective of this review was to determine the allowability of $2,074,473 in post retirement benefit (PRB) costs claimed for Medicare reimbursement by North Carolina.  The $2,074,473 represents PRB costs that will be incurred subsequent to the termination of North Carolina's Medicare contract.  The review showed North Carolina's claim for $2,074,473 of PRB costs is unallowable for Medicare reimbursement because the claim represented a retroactive change in accounting basis and a request for reimbursement of unfunded costs.  We recommended North Carolina withdraw its claim for $2,074,473 of unallowable PRB costs.