Review of Pension Costs Claimed for Medicare Reimbursement by Arkansas Blue Cross and Blue Shield

This final report provides the results of our review of Pension Costs Claimed for Medicare Reimbursement by Arkansas Blue Cross and Blue Shield. Our review showed that Arkansas Blue Cross and Blue Shield (Arkansas) underclaimed allowable Medicare pension costs for 1991 through 1996 by $1,756,942. The underclaim occurred primarily because Arkansas did not base its claim on separately computed Cost Accounting Standards (CAS) pension costs for the Medicare segment. We recommend Arkansas revise its Final Administrative Cost Proposals (FACPs) to reflect the remaining allowable pension costs. Arkansas concurred with our finding and recommendation.