HHS/OIG, Audit - "Review of Excess Plan Costs Claimed by Blue Cross Blue Shield of South Carolina for Medicare Reimbursement for Fiscal Years 1996�04," (A-07-07-00235)

Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Excess Plan Costs Claimed by Blue Cross Blue Shield of South Carolina for Medicare Reimbursement for Fiscal Years 1996�04," (A-07-07-00235)

October 19, 2007

Complete Text of Report is available in PDF format (375 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

EXECUTIVE SUMMARY:

Blue Cross Blue Shield of South Carolina (South Carolina) administers Medicare Part A and Part B operations in its Palmetto Government Benefit Administrators (Palmetto) and TrailBlazer Health Enterprises (TrailBlazer) subsidiaries under cost reimbursement contracts with the Centers for Medicare & Medicaid Services. Our objective was to determine the allowability of the Excess Plan costs that South Carolina claimed for Medicare reimbursement for fiscal years (FY) 1996�04. We found that South Carolina overclaimed $1,847,056 in accrued Excess Plan costs for FYs 1996�04 because it improperly determined costs based on accrual accounting.

We recommended that South Carolina revise its Final Administrative Cost Proposals for FYs 1996�04 for Palmetto and FYs 2000�04 for TrailBlazer to reduce claimed Excess Plan costs by $1,847,056. In written comments on our draft report, South Carolina did not directly address our recommendation.