Group Health Incorporated Overstated Allocable Pension Costs for Plan Years 2007 and 2008.

摘要

Group Health Incorporated (GHI), an EmblemHealth Company, administered Medicare Part B operations under cost reimbursement contracts with the Centers for Medicare & Medicaid Services (CMS), which terminated July 18, 2008. GHI also administers Medicare operations under a Coordination of Benefits contract with CMS. In addition, GHI performs Medicare work as a subcontractor on the Retiree Drug Subsidy and on the Medicare Secondary Payer Recovery contracts. During our audit period, GHI had three defined benefit pension plans. This report will address the allocable pension costs computed for all three of these pension plans. Before January 1, 2007, GHI based its request for Medicare reimbursement on actual costs. Effective January 1, 2007, GHI amended its disclosure statement with CMS to receive Medicare reimbursement based on indirect cost rates submitted on incurred cost proposals (ICP). CMS reimburses a portion of the annual contributions that contractors make to their pension plans. The pension costs are included in the computation of the indirect cost rates reported on the ICPs. In turn, CMS uses indirect cost rates in reimbursing costs under cost-reimbursement contracts. In claiming costs, contractors must follow cost reimbursement principles contained in the Federal Acquisition Regulation, Cost Accounting Standards (CAS), and Medicare contracts. The Medicare contracts require contractors to allocate or separately calculate pension costs. Contractors must use the separate calculation method if there is a material difference between the results of the two methods.