Review of Postretirement Benefit Costs Claimed by First Coast Service Options for Medicare Reimbursement for Fiscal Years 2002 Through 2005

EXECUTIVE SUMMARY:

The objective of our review was to determine the allowability of the post retirement benefit (PRB) costs First Coast Service Options (FCSO) claimed for Medicare reimbursement on an accrual basis for fiscal years (FYs) 2002 through 2005. FCSO did not claim all accrued PRB costs that were allowable for Medicare reimbursement for FYs 2002 through 2005. During this period, the allowable accrued PRB costs were $8,894,080. However, FCSO claimed accrued PRB costs of $8,630,152 for Medicare reimbursement. FCSO therefore underclaimed $263,928 of allowable PRB costs during this period because it did not claim PRB costs in accordance with its Medicare contract. We recommended that FCSO revise its Final Administrative Cost Proposals (FACPs) to claim allowable accrued PRB costs of $263,928 for FYs 2002 through 2005. We also recommended that FCSO claim future PRB costs in accordance with the Medicare contract. FCSO agreed with our recommendations and stated that it would revise its FACPs for FYs 2002 through 2005.