Review of Postretirement Benefit Costs Claimed for Blue Cross Blue Shield of South Carolina for Fiscal Years 2000 Through 2004

摘要

Blue Cross Blue Shield of South Carolina (South Carolina) administers Medicare Part A and Part B operations in its TrailBlazer Health Enterprises and Palmetto Government Benefit Administrators subsidiaries under cost reimbursement contracts with the Centers for Medicare & Medicaid Services (CMS). In claiming postretirement benefit (PRB) costs, contractors must follow cost reimbursement principles contained in the Federal Acquisition Regulation (FAR) and applicable Cost Accounting Standards, as required by the Medicare contract. In addition, the Medicare contract and the Budget and Performance Requirements mandate that any proposed change in accounting practice for PRB costs be submitted to CMS for approval. In fiscal year (FY) 2000, South Carolina submitted a request to CMS to use accrual accounting for PRBs. South Carolina established a revocable grantor trust for its PRB plan and began claiming accrual costs in FY 2000. In FY 2005, South Carolina established a voluntary employee benefit association (VEBA) trust and transferred the funds from the revocable grantor trust to the VEBA in order to meet the FAR 31.205-6(o) and Statement of Financial Accounting Standards 106 requirements for recognition of the trust as a plan asset, and to comply with the conditions agreed upon with CMS.