SPECIAL REPORT ON EXAMINATION

http://www.ins.state.ny.us/exam_rpt/hnsr1203.pdf

SPECIAL REPORT ON EXAMINATION
OF
HEALTHNOW NEW YORK INC.
AS OF
DECEMBER 10, 2003


Conflict of Interest Procedures
The examination review revealed that certain directors were engaged in outside business
practices that have, at least, the appearance of potential conflicts with their roles as directors of
the Plan. During the examination period, conflict of interest statements were submitted to the
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Plan’s internal audit section and reviewed in conformity with the Plan’s policy. However, not all
of the Plan’s potential conflicts of interest were identified or noted in the Board or Committee
minutes of meetings.
A review of the Plan’s existing Conflict of Interest forms, signed by the Plan’s board
members and officers indicates that such form should be enhanced to provide for additional
disclosure of conflicts including disclosure of a medical practice in New York State, disclosure
of family members that work for, or have a connection with providers of health care services,
disclosure of filer or family member of filer as a supplier of services to the Plan or member of
the HealthNow holding company system, and disclosure of filer or family member are owners of
a corporation whose aggregate sales to (1) hospitals, (2) licensed medical professions and (3)
facilities of health service, hospital service and medical expense indemnity corporations exceed
5% of its total sales.
It is recommended that HealthNow enhance its conflict of interest forms for its directors,
officers and key employees by including such additional disclosure items as indicated above or
other items as necessary. It is further recommended that the Plan enhance its review of such
conflict of interest statements and require more comprehensive documentation to support a
determination that conflicts do not exist.