Ins 57.30(2)(h) (h) A supplemental financial report that demonstrates the financial position and segregated reserves of the CMO business for each state program contract where the organization serves members under multiple Medicaid managed care contracts or other lines of business. The report shall be in columnar format for the various programs as required.

Ins 57.30(2)(i) (i) Management letter as issued or written assurance that a management letter was not issued with the audit report.

Ins 57.30(2)(j) (j) Management responses and corrective action plan for each audit issue identified in the audit report or in the management letter.

Ins 57.30(2)(k) (k) Notes to financial statements. These notes shall be those required by generally accepted accounting principles. The notes shall include a reconciliation of differences, if any, between the audited financial statements and the annual statement filed pursuant to s. Ins 57.40 with a written description of the nature of these differences.

Ins 57.30(3) (3) The financial statement shall be comparative, presenting the amounts as of December 31 of the current year and the amounts as of the immediately preceding December 31, except in the first year in which a care management organization is required to file an audited financial report, the comparative data may be omitted.

Ins 57.30 History History: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10; correction in (2) (k) made under s. 13.92 (4) (b) 7., Stats., Register May 2010 No. 653.

Ins 57.31 Ins 57.31 Designation of independent certified public accountant.

Ins 57.31(1) (1) A care management organization shall, within 60 days after the care management organization becomes subject to this subchapter:

Ins 57.31(1)(a) (a) Provide the commissioner in writing the name and address of the independent certified public accountant retained to conduct the annual audit required by this subchapter.

Ins 57.31(1)(b) (b) File with the commissioner a copy of the letter required to be obtained under sub. (3).

Ins 57.31(2) (2) Care management organizations not retaining an independent certified public accountant on June 1, 2010, shall register the name and address of their retained independent certified public accountant not less than 6 months before the date when the first audited financial report is to be filed.

Ins 57.31(3) (3) A care management organization shall obtain a letter from the independent certified public accountant it retains to conduct the annual audit required by this subchapter. The letter shall state that the independent certified public accountant:

Ins 57.31(3)(a) (a) Is aware of the provisions of the administrative code and the rules and regulations of the insurance department or equivalent agency of the state of domicile of the care management organization that relate to accounting and financial matters of care management organizations; and

Ins 57.31(3)(b) (b) Will express an opinion on whether the financial statements conform to the generally accepted accounting practices prescribed or otherwise permitted by that department or equivalent agency and will specify exceptions as appropriate.

Ins 57.31(4) (4) If an independent certified public accountant for the immediately preceding filed audited financial report of a care management organization is dismissed or resigns, the care management organization shall comply with all of the following:

Ins 57.31(4)(a) (a) The care management organization shall within 5 business days notify the commissioner of the dismissal or resignation.

Ins 57.31(4)(b) (b) The care management organization shall within 15 business days of the dismissal or resignation furnish the commissioner with a letter which clearly states that there was no disagreement required to be disclosed under this paragraph or which describes any disagreement between the care management organization and the independent certified public accountant in the 24 months preceding the dismissal or resignation, which:

Ins 57.31(4)(b)1. 1. Was on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure; and

Ins 57.31(4)(b)2. 2. Would require the independent certified public accountant to make reference to the subject matter of the disagreement in connection with the opinion required under s. Ins 57.30. The requirement to provide a description applies regardless of whether the disagreement was resolved or whether the former independent certified public accountant was satisfied with the resolution.

Ins 57.31(4)(c) (c) The care management organization shall within 15 business days of the dismissal or resignation furnish the commissioner with a letter from the independent certified public accountant addressed to the care management organization stating whether the independent certified public accountant agrees with the statements contained in the care management organization’s letter required under par. (b) and, if not, stating the reasons why not.

Ins 57.31 History History: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10.

Ins 57.32 Ins 57.32 Qualifications of independent certified public accountants.

Ins 57.32(1) (1) The commissioner may rule that an accountant or accounting firm is not qualified for purposes of expressing an opinion on the financial statements in the annual audited financial report required under this subchapter, prohibit care management organizations from retaining the accountant or an accounting firm, and require care management organizations to replace the accountant or accounting firm, if the commissioner finds there is cause, including, but not limited to, a finding that the accountant or accounting firm:

Ins 57.32(1)(a) (a) Is not in good standing with the American institute of certified public accountants and in all states in which the accountant or accounting firm is, or is required to be, licensed to practice;

Ins 57.32(1)(b) (b) Has either directly or indirectly entered into an agreement of indemnification with respect to the audit of the care management organization;

Ins 57.32(1)(c) (c) Has not conformed to the standards of the accounting profession as contained in the code of professional ethics of the American institute of certified public accountants and rules and regulations and code of ethics and rules of professional conduct of the accounting examining board, or a similar code;

Ins 57.32(1)(d) (d) Has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 USC 1961 to 1968, as revised, or any dishonest conduct or practices under federal or state law;

Ins 57.32(1)(e) (e) Has been found to have violated the insurance laws or rules of this state; or

Ins 57.32(1)(f) (f) Has demonstrated a pattern or practice of failing to detect or disclose material information in financial reports.