Review of Supplemental Executive Retirement Plan Costs Claimed by Blue Cross Blue Shield of South Carolina for Medicare Reimbursement for Fiscal Years 1999–2004

Our objective was to determine the allowability of the Supplemental Executive Retirement Plan (SERP) costs that Blue Cross Blue Shield of South Carolina (South Carolina) claimed for Medicare reimbursement for fiscal years (FY) 1999'2004. 

South Carolina's claim for $5,920,947 in SERP costs for FYs 1999'2004 included some costs that were unreasonable and therefore unallowable for Medicare reimbursement.  However, we were unable to determine the impact of these unallowable compensation costs on SERP costs because South Carolina did not provide us with the necessary documentation to support its SERP calculations.  Therefore, we are setting aside the $5,920,947 in claimed SERP costs for adjudication by the Centers for Medicare & Medicaid Services (CMS).  

We recommended that South Carolina work with CMS to determine the allowability of $5,920,947 in SERP costs claimed for FYs 1999'2004.  South Carolina concurred with our recommendation.