OIG questions GALIC billing

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Tuesday, April 30, 2002

ST. LOUIS — Nearly $43 million of the Medicare Part B administrative costs claimed by the General American Life Insurance Company (GALIC) are being questioned and recommended for disallowance, according to a recent OIG report.

The report alleges GALIC did not provide sufficient documentation to support its indirect costs, fringe benefits, miscellaneous costs and termination costs from Oct. 1993, through Dec. 1999. Two of those areas, indirect costs and fringe benefits, account for $38 million of the company's alleged $42.8 million oversight.

The OIG's objective had been to determine whether GALIC had established effective systems of internal control, accounting and reporting for administrative costs. The report states the OIG determined the company had not established those systems for indirect costs. HME

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