Review of Pension Costs Claimed for Medicare Reimbursement by Premera Blue Cross for Fiscal Years 1996 Through 2004

EXECUTIVE SUMMARY:

The objective of our review was to determine the allowability of pension costs that Premera claimed for Medicare reimbursement for fiscal years (FYs) 1996 through 2004.  We found that Premera did not claim all pension costs that were allowable for Medicare reimbursement for FYs 1996 through 2004 because it did not claim pension costs in accordance with the Medicare contract.  Premera underclaimed $36,923 of allowable pension costs.  We recommended that Premera revise its Final Administrative Cost Proposals to claim allowable Cost Accounting Standards pension costs of $36,923 for FYs 1996 through 2004.  Premera concurred with our recommendation.