Review of Medicare Contractor's Pension Segmentation Requirements, Blue Cross Blue Shield of Maine for the Period Covering January 1, 1988, to December 31, 2000

EXECUTIVE SUMMARY:

The objective of our review was to determine if Blue Cross Blue Shield of Maine complied with the pension segmentation requirements of the Medicare contract while updating Medicare segment assets from January 1, 1988, to December 31, 2000.  We found that Maine did not correctly identify the initial allocation of pension plan assets to the Medicare segment.  In addition, Maine did not comply with the Medicare contract's pension segmentation requirements while updating Medicare segment assets from January 1, 1988, to December 31, 2000.  As a result, Maine understated Medicare segment pension assets by $942,882.  We recommended that Maine increase the Medicare segment pension assets by $942,882 as of December 31, 2000.  Maine agreed with our findings.