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

EXECUTIVE SUMMARY:

This final report provides the results of our review of Medicare Contractor's Pension Segmentation, Blue Cross and Blue Shield of Mississippi (Mississippi). Our review showed that Mississippi understated Medicare segment pension assets as of 1986 by $224,711. The understatement occurred because Mississippi omitted certain Medicare segment cost centers in determining Medicare's initial assets. However, Mississippi's update of the Medicare segment assets from Plan Year 1986 to Plan Year 1996 overstated segment assets by $950,412. The overstatement primarily occurred because Mississippi did not make the correct transfer adjustment. We recommended that Mississippi decrease the January 1, 1996 assets of the Medicare segment by $725,701 (950,412 less $224,711). Mississippi accepted our recommendation.