More than companies in other industries, health care payers must operate from a position of financial integrity. Poor internal controls or financial insolvency can put members' well-being at risk. Payers must be able to assure their members and industry and federal regulators that they are solvent and trustworthy. Assurance is designed to support these assertions with competent, independent verification of a payer's compliance with accepted business processes and financial reporting practices.
Public payers are required by law to comply with the Sarbanes-Oxley Act of 2002, which establishes standards and procedures for financial reporting, accountability for the accuracy of financial disclosures, and sentencing guidelines that prescribe individual and corporate penalties for fraud or non-compliance. Although private and nonprofit insurers are not obligated to comply specifically with the accountability provisions of Section 404 of Sarbanes-Oxley, good corporate governance is essential for conducting business in a highly regulated business environment. The National Association of Insurance Commissioners (NAIC) recently strengthened its commitment to the Annual Financial Reporting Model Regulation — known popularly as the Model Audit Rule — which is very similar to Sarbanes-Oxley in that it requires private payers to transparently disclose and independently verify their financial performance. During the next few years, many states will be considering whether to adopt the new provisions of the Model Audit Rule either through legislation or regulation. The Model Audit Rule may differ from state to state, complicating compliance.
How we can help you
Leading health insurance companies come to PricewaterhouseCoopers for people, experience and thought leadership in assurance services and solutions. We provide consulting or audit services to all of Fortune's "2006 Top Ten Most Admired Health Payers." We audit more leading U.S. insurance companies than any other firm. Our approach to audits and assurance services and our proven methodology to implement effective internal controls set the standard for financial reporting across many industries. Our renowned assurance practice and proprietary tools combined with our deep knowledge of the health industry and its specific compliance and reporting requirements differentiates us from our "Big Four" competitors.
If your company is publicly traded, you need a strong collaboration with a firm able to provide thought leadership and practical guidance that will help you navigate the requirements of Sarbanes-Oxley. If you are a non-public or not-for-profit insurer, it is equally vital to work with a firm that can help you to establish internal controls that assure the integrity of your business processes and financial reporting. Whether your organization is governed by Sarbanes-Oxley or the Model Audit Rule, we can help you develop effective controls over your financial reporting in an efficient manner and use the process to achieve substantial business value.
