Review of Medicare Contractor's Pension Segmentation Blue Cross and Blue Shield of Oregon

This final report provides the results of our review of Medicare Contractor's Pension Segmentation, Blue Cross and Blue Shield of Oregon. Our review showed that Oregon overstated Medicare segment pension assets as of 1986 by $170,415. The overstatement occurred because Oregon inadvertently used the 1981 rather than the 1984 asset fraction when identifying the January 1, 1986 Medicare assets. However, Oregon's update of the Medicare segment assets from Plan Year 1986 to Plan Year 1994 understated segment assets by $361,727. The Understatement primarily occurred because Oregon used incorrect participant data and did not equitably assign pension contributions. We recommended that Oregon increase the January 1, 1994 assets of the medicare segment by $191,312 ($361,727 less $170,415).