Review of Pension Costs Claimed by Cahaba Government Benefit Administrators

EXECUTIVE SUMMARY:

The objective of this review was to determine the allowability of pension costs claimed for Medicare reimbursement for Fiscal Years (FYs) 1994 through 2002.  For FYs 1994 through 2002, we determined that Blue Cross and Blue Shield of Alabama (Cahaba) under claimed allowable Medicare pension costs.  During this period, the allowable Medicare pension costs were $20,851,684.  However, Cahaba claimed pension costs of $13,766,191 for Medicare reimbursement.  As a result, Cahaba did not claim $7,085,493 of allowable pension costs. 

We recommended that Cahaba revise its Final Administrative Cost Proposals for FYs 1994 through 2002 to claim additional allowable CAS pension costs of $7,085,493.  Cahaba agreed with our report.