Review of Pension Costs Claimed for Medicare Reimbursement by Blue Cross Blue Shield of Arizona for Fiscal Years 1991 Through 2005

EXECUTIVE SUMMARY:

The objective of our review was to determine the allowability of pension costs claimed by Arizona for Medicare reimbursement for fiscal years (FY) 1991 through 2005.  We found that Arizona claimed $142,343 of unallowable Medicare pension costs for FYs 1991 through 2005 due to the differences in the calculated allocable pension costs.  Arizona claimed $1,737,918 of pension costs for Medicare reimbursement; however we calculated the allowable Medicare pension costs during this period to be $1,595,575.  We recommended that Arizona revise its Final Administrative Cost Proposals for FYs 1991 through 2005 to reduce its claimed pension costs by $142,343.  Arizona agreed with our recommendation.