Review of Blue Cross Blue Shield of Florida's Pension Segmentation Requirements for the Period January 1, 1994, to January 1, 2003

EXECUTIVE SUMMARY:

The objectives of our review were to determine if Blue Cross Blue Shield of Florida (Florida):  (1) implemented our prior audit recommendation to increase Medicare segment assets by $813,122; and (2) complied with the Medicare contract's pension segmentation requirements while updating Medicare segment assets.  We found that Florida did not implement the prior audit recommendation and did not comply with the Medicare contract's pension segmentation requirements while updating Medicare segment assets.  Florida understated Medicare segment assets by $1,294,606.  We recommended that Florida increase the Medicare segment pension assets by $1,294,606, implement controls to ensure that audit recommendations are addressed, and implement controls to ensure that Medicare segment assets are updated in accordance with the Medicare contract.  Florida agreed with our report findings.