Review of Severance and Termination Costs Claimed by CareFirst Blue Cross/Blue Shield of Maryland for the Period October 2005 Through December 2006

Our objective was to deter m ine whether CareFirst Blue Cross/Blue Shield of Maryland's (CareFirst) claims for severance and ter m ination costs were allowable, reasonable, and alloca b l e, in accorda n ce with the Federal Acquisition Regulation, the Medicare co n t ract provisions, and CareFirst severance policies.  CareFirst claimed $1,394,977 in severance and termination costs for the period October 2005 through December 2006.  We did not question $1,362,526 of this amount.  However, CareFirst claimed $32,451 in unallowable costs.  In its comments on our draft report, CareFirst concurred with all but one of our findings.  CareFirst provided additional documentation (letter, invoice, and schedule of hours/wages) from AON Consulting to support the professional fees totaling $12,024 for services claimed for November 2005.

Although CareFirst provided additional information about the work performed, it did not document the details of the agreements. Therefore, we continue to support our recommendation.