About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

092654 1 (1969-12-03)

handle is hein.gao/gaobacwmw0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFI:E 0 u14WASHINGTON, D C 20548 CIVIL DIVISION December 3, 1969 Dear Mr. Ball We have completed a r view of the reasonableness of the allocation of selected administrabive cos~b to parts A and B of the Medicare program by the Aetna Life Insurance Company (Aetna) for calendar year 1967 Under a cost-type contract with the Social Security Administration (SSA), Aetna acts as a carrier under part B of the piogram and as a fiscal intermediary under part A of the program At the time of our review, the Department of Health, Education, and Welfare (HEW) Audit Agency had not made its review of Aetna's calendar year 1967 administrative costs In our opinion, certain administrative costs for (1) data processing, (2) executive compensation and related costs, and (3) certain other indi- rect costs had not been equitably allocated to the Medicare program In discussing the mathed of al1ocating admini4trative coto with Arts of- ficials, we suggested -uoat a more equitable metnod be useat to allocate such costs to the Medicare program Aetna agreed to revise its method of allocating costs and will reduce its allocation to the Medicare pro- gram for calendar year 1967 by about $135,000. We estimate that the changes in the methods of allocating administraTive costs will result in future annual savings of about $132,000. Our findings are discussed in more detail in the following sections of this report DATA PROCESSING COSTS In our opinion, the costs allocated to the Medicare program from the cost center for group data processing exceeded the costs incurred in con- nection with the Medicare program This overallocation occurred because certain costs incurred in the Group Data Processing Department (GDPD), such as those for rental of electronic data processing equipment and employee fringe benefits, had been charged to other cost centers but were also considered as part of the costs of the group data processing cost center in determining the percentage of cost to be allocated to the Medicare program Since part of the costs charged to the other cost centers also had been allocated to the Medicare program, we believe that the total costs allocated to the program were excessive. We brought this matter to the attention of Aetna officials, who agrced that the method of allocating group data processing costs to the Medicare program was inequitable and that a more equitable basis for allocating these costs was needed After giving further consideration BEST DOCUMENT AVAILABLE Io444(

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most