Audit of Pension Costs Claimed for Medicare Reimbursement by Blue Cross and Blue Shield of Texas, Inc.,

Page 2 - Wynethea Walker Texas stated that its pension cost calculation was in accordance with CAS and that its voluntary cost reductions had implemented the prior audit recommendation. Texas’s comments are included in their entirety as Appendix B. Regardless of whether Texas’s pension cost calculations were in accordance with CAS, its methodology for allocating pension costs to the Medicare segment was not in accordance with the Medicare contract. Also, Texas did not provide adequate documentation to show that it had implemented the prior audit recommendation. If you have any questions or comments about this report, please do not hesitate to call me, or your staff may contact George M. Reeb, Assistant Inspector General for the Centers for Medicare & Medicaid Audits, at (410) 786-7104 or James P. Aasmundstad, Regional Inspector General, Region VII, at (816) 426-3591, extension 225. Please refer to report number A-07-03-03046 in all correspondence. Attachment Page 2 – Ms. Susan E. Gajda Direct Reply to HHS Action Official: James R. Farris, M.D. Regional Administrator Centers for Medicare & Medicaid Services 1301 Young Street, Room 714 Dallas, Texas 75202 Department of Health and Human Services OFFICE OF INSPECTOR GENERAL AUDIT OF PENSION COSTS CLAIMED FOR MEDICARE REIMBURSEMENT BY BLUE CROSS AND BLUE SHIELD OF TEXAS, INC. JULY 2004 A-07-03-03046 Office of Inspector General http:/ ...