2. a. The Director of the Division of Consumer Affairs in the Department of Law and Public Safety shall enter into a memorandum of understanding with an accrediting body chosen by the director through appropriate procurement processes authorized to accredit a health care service firm pursuant to subsection c. of section 1 of P.L.2002, c.126 (C. 34:8-45.1). The memorandum of understanding shall establish the standards for accreditation and for reporting the results of audits performed pursuant to subsection d. of section 1 of P.L.2002, c.126 to the Division.

b. The director shall, in consultation with representatives of health care service firms registered with the division, develop an agreed-upon set of standards and procedures for independent third party practitioners to review health care service firm financial statements and records, general management, and internal controls pursuant to paragraph (4) of subsection d. of section 1 of P.L.2002, c.126 (C. 34:8-45.1). At a minimum, the standards and procedures developed pursuant to this subsection shall address:

(1) the minimum educational, training, and professional certification qualifications for independent third party practitioners performing reviews of health care service firm financial statements and records;

(2) the data points and metrics to be included in a review of a health care service firm’s financial statements and records, general management, and internal controls which shall include, at a minimum, verification of the accreditation and licensing status of the firm; review of the firm’s ownership structure; review of contracts and funding sources as well as payments, cash transactions, and reconciliation of account balances; review of the adequacy of the firm’s insurance coverage; review of billing practices and invoices to ensure the adequacy of supporting documentation and the inclusion of appropriate authorizations; review of any history of litigation involving the firm, regulatory actions taken against the firm, or past audits of the firm; review of the use of independent contractors; and review of large transactions and liabilities that exceed a specified percentage of the firm’s total billings or liabilities, as appropriate; and

(3) the thresholds and requirements for the division to make an adverse finding and take corrective action against a firm based upon a review of an independent third party report concerning the firm’s financial statements and records.

L.2014, c.29, s.2; amended 2020, c.132, s.2.