Audit of Blue Cross Blue Shield of Florida's Unfunded Pension Costs for 1994 Through 2003, A-07-04-00179

DEPARTMENT OF HEALTH & HUMAN SERVICES office of Inspector General : b Washington, D.C. 20201 FEE -4 2005 TO: Tim Hill Director. Office of Financial Management FROM: /beputy inspector General for Audit Services SUBJECT: Audit of Blue Cross Blue Shield of Florida's Unfunded Pension Costs for 1994 Through 2003 (A-07-04-00179) Attached is an advance copy of our final report on Blue Cross Blue Shield of Florida's (Florida) unfunded pension costs. We will issue this report to Florida within 5 business days. We suggest that you share this report with the Centers for Medicare & Medicaid Services components involved with monitoring the Medicare contractors' financial operations, particularly the Center for Medicare Management and the Office of the Actuary. Florida is a Medicare contractor and, as such, is allowed to claim reimbursement for its Medicare employees' pension costs. Regulations and the Medicare contracts provide for the funding requirements and assignment of pension costs claimed for Medicare reimbursement. We are recommending that Florida increase its accumulated unallowable pension costs by about $2.3 million. Florida agreed with our report finding. If you have any questions or comments about this report, please do not hesitate to call me, or George M. Reeb, Assistant Inspector General for the Centers for Medicare & Medicaid Audits, at (410) 786-7104 or James P. Aasurnndstad, Regional Inspector General, ~e~ion VII, at (816) 426-3591, ...