Common use of Financial Readiness Review Clause in Contracts

Financial Readiness Review. To complete a financial review, the MCO must submit a Financial Update Report no later than 60 days prior to the Operational Start Date. At a minimum, the report must include the following: 1. Material change in financial condition. For both the MCO and its ultimate parent, the report must identify whether either entity has experienced any material financial deterioration following proposal submission. The report must identify and briefly describe any changes to the financial statements, including changes to net worth; cash flow; loss of contracts; credit, audit, regulatory, and/or legal issues; major contingencies, etc. The report must also describe any known potential issues, and any issues with respect to change of ownership or control. 2. Updated financial statements. The report must include the most recently updated financial statements, which should be more current than those provided in the proposal. The updated financial statements should include the most recent quarterly (or monthly) internal financial statements, the most-recently completed annual statements, and the most-recent audited statements. The statements should generally include the notes, management discussion, and where appropriate, the audit letter. Internal most-recent-month statements are not expected to include these items. The report must include any of the following new or updated reports (as referenced under Sections 4.2.3.3 and 4.2.3.4) that have become available since proposal submission: TDI financial examination report (or similar report from another state); Form B Registration statement filing; IRS Form 990; and bond or debt rating analysis. It is not necessary to submit updated SEC 10-K or 10-Q filings with the report. In addition to the Financial Update Report, the MCO must submit documentation demonstrating it has secured all required bonds in accordance with TDI requirements, Section 8, “Operations Phase Requirements,” and Attachment A, “Uniform Managed Care Terms and Conditions,” Article 17. Such documentation is due no later than ten (10) business days after the Contract Effective Date.