New York Codes, Rules and Regulations › Title 10 - DEPARTMENT OF HEALTH › Chapter II - Administrative Rules and Regulations › Subchapter R - Health Maintenance Organizations › Part 98 - Health Maintenance Organizations › Subpart 98-3 - Managed Care Organizations Audited Financial Statements › Section 98-3.13 - Requirements for audit committees

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
					 The audit committee shall be directly responsible for the appointment,
					 compensation and oversight of the work of any CPA (including resolution of
					 disagreements between management and the CPA regarding financial reporting) for
					 the purpose of preparing or issuing the audited financial report or related
					 work pursuant to this Subpart. Every CPA shall report directly to the audit
					 committee.
(b) Every member of the
					 audit committee shall be a member of the board of directors, a member of the
					 board of directors of a member of the holding MCO system or, for a United
					 States branch of an alien MCO, a member of the audit committee of the person
					 that controls the branch.
(c) In
					 order to be considered independent for purposes of this section, a member of
					 the audit committee may not, other than in the member's capacity as a member of
					 the audit committee, the board of directors, or any other board committee,
					 accept any consulting, advisory or other compensatory fee from the MCO or be an
					 affiliated person of the MCO or any subsidiary thereof, except to the extent
					 that any law may require board participation by otherwise non-independent
					 members, and, in such case, the member may participate in the audit committee
					 and be designated as independent for audit committee purposes, unless the
					 member is an officer or employee of the MCO or one of its affiliates.
(d) If a member of the audit committee ceases
					 to be independent for reasons outside the member's reasonable control, that
					 person may remain an audit committee member of the responsible MCO until the
					 earlier of the next annual meeting of the responsible MCO or one year from the
					 occurrence of the event that caused the member to be no longer independent,
					 provided that the MCO promptly notifies the Commissioner.
(e) The MCO shall give written notice to the
					 Commissioner of the selection of its audit committee within 30 days of the
					 effective date of this Subpart and within 30 days of any change in membership
					 of the audit committee. The notice shall include a description of the reason
					 for the change.
(f)
(1) The audit committee shall require the CPA
					 that performs any audit for a MCO that is required by this Subpart to timely
					 report to the audit committee:
(i) All
					 significant accounting policies and material permitted practices;
(ii) All material alternative treatments of
					 financial information within statutory accounting principles that have been
					 discussed with management officials of the MCO, ramifications of the use of the
					 alternative disclosures and treatments, and the treatment preferred by the CPA;
					 and
(iii) Other material written
					 communications between the CPA and the management of the MCO, such as any
					 management letter or schedule of unadjusted differences.