Corporate Compliance

GOV’T AUDIT INSIDER: Unallowable pension cost claims in Tennessee

Healthcare Auditing Weekly, November 2, 2004

Blue Cross Blue Shield of Tennessee claimed $684,551 of unallowable pension costs for fiscal years 1994 through 2002, according to an Office of Inspector General (OIG) audit report. Contactors must follow cost reimbursement principles contained in Federal Acquisition Regulations, Cost Accounting Standards (CAS), and the Medicare contracts. According to the report, Tennessee incorrectly identified the Medicare segment according to the contract. The OIG recommends that Tennessee should revise its Final Administrative Cost Proposals to eliminate the unallowable CAS pension costs. During the audit, the OIG did the following:

  • Identified Tennessee's CAS pension costs for the total company and the Medicare segment

  • Determined the extent to which Tennessee funded CAS pension costs with contributions to the pension trust and accumulated prepayment credits

  • Calculated CAS pension costs that are allowable for Medicare reimbursement

    Click here to read the audit report, "Review of Pension Costs Claimed by Blue Cross Blue Shield of Tennessee," (A-07-04-03054), issued October 4.

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