Report on Medicare Part B Administrative Costs at Pennsylvania Blue Shield

EXECUTIVE SUMMARY:

This final audit report points out that the Pennsylvania Blue Shield (PBS) claimed unallowable costs totaling $1,128,698 in administering the Medicare Part B program. The unallowable costs included costs associated with PBS' private lines of business, entertainment, contributions, a bid proposal, and other activities not eligible for Medicare reimbursement. The PBS agreed to make procedural improvements and a financial adjustment for the above amount. Health Care Financing Administration officials generally agreed with the findings and recommendations.