Register May 2010 No. 653
Chapter Ins 57
CARE MANAGEMENT ORGANIZATIONS
Changes in the business plan.
Copies of provider agreements.
Acquisition of control of or merger with a care management organization.
Standards for transactions within a holding company system.
Forms and Instructions.
Forms — incorporation by reference, summaries and omissions.
Transactions subject to prior notice — notice filing.
Dividends and other distributions.
Consent to jurisdiction.
General requirements related to filing and extensions for filing of annual audited financial reports.
Contents of annual audited financial report.
Designation of independent certified public accountant.
Qualifications of independent certified public accountants.
Scope of audit and report of independent certified public accountant.
Notification of adverse financial condition.
Accountant's letter of qualifications.
Availability and maintenance of CPA work papers.
Conduct of care management organization in connection with the preparation of required reports and documents.
Care management organizations to file financial statements.
Exemptions and effective dates.
Ins 57.01 Definitions.
In addition to the definitions in s. 648.01
, Stats., in this chapter:
“Affiliate" of, or person “affiliated" with, a specific person means a person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.
“Commissioner" means the commissioner of insurance of this state or the commissioner's designee.
“Department" means the department of health services of this state.
“Independent certified public accountant" means an independent certified public accountant, or independent accounting firm, in good standing with the American Institute of Certified Public Accountants in this state, and in the states in which the accountant or firm is licensed, or required to be licensed, to practice.
“Net assets" means assets minus liabilities.
“Restricted reserve" means liquid assets maintained in a segregated account by a care management organization.
“Subsidiary" of a person means a person which is controlled, directly or indirectly through one or more intermediaries, by the first person.
“Ultimate controlling person" means a person who is not controlled by any other person.
“Work papers" means records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to the independent certified public accountant's examination of the financial statements of a care management organization. “Work papers" includes audit planning documentation, audit guides, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of examination of the financial statements of a care management organization or which support the opinion of the independent certified public accountant regarding the financial statements.
“Working capital" means a measure calculated as current assets minus current liabilities.
Ins 57.01 History
History: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10. Ins 57.04
Ins 57.04 Financial requirements.
All of the following are the minimum financial requirements for compliance with this section unless a different amount is ordered by the commissioner, after consultation with the department:
(1) Working capital.
Unless otherwise ordered by the commissioner the care management organization shall maintain working capital of not less than 3% of the projected annual capitation made over the effective contract period.
(2) Restricted reserve.
Unless otherwise ordered by the commissioner the care management organization shall maintain a restricted reserve of not less than the sum of the following:
8% of the first $5 million of annual budgeted capitation revenue.
4% of the next $5 million annual budgeted capitation revenue.
3% of the next $10 million annual budgeted capitation revenue.
2% of the next $30 million annual budgeted capitation revenue.
1% of annual budgeted capitation revenue in excess of $50 million.
(3) Accessing restricted reserve funds.
A care management organization may not access the restricted reserve unless:
A plan for accessing the funds is filed with the commissioner at least 30 days prior to the proposed effective date; and
The commissioner, after consulting with the department, does not disapprove the plan in the 30 day timeframe.
Risks and factors the commissioner may consider in determining whether to require greater restricted reserves by order include all of the following:
Types of contingencies.
The commissioner shall consider the risks of:
Increases in the frequency or severity of losses beyond the levels contemplated by the capitation payments received;
Increases in expenses beyond those contemplated by the capitation payments received; and
Any other contingencies the commissioner can identify which may affect the care management organization's operations.
In making the determination under this subsection, the commissioner shall take into account the following factors:
The most reliable information available as to the magnitude of the various risks under par. (a)