Review of Medicare Contractor's Pension Segmentation Requirements at Blue Cross Blue Shield of Oregon for the Period January 1, 1994, Through January 1, 1997

EXECUTIVE SUMMARY:

The objectives of our review were to determine if Oregon complied with the Medicare contracts' pension segmentation requirements while: (1) implementing the prior audit recommendation, and (2) updating the Medicare segment's assets from January 1, 1994, through January 1, 1997. We found that Oregon did correctly implement the prior audit recommendation; however, it did not comply with the Medicare contract's pension segmentation requirements when updating the segment's assets from January 1, 1994, through January 1, 1997. As a result, Oregon overstated the January 1, 1997, Medicare segment assets by $298,048. We recommended that Oregon decrease Medicare segment pension assets by $298,048 as of January 1, 1997. Oregon agreed with our recommendation.