Johnson Designates ‘High Risk Pool’ Agency For Audit

State Auditor Wayne Johnson
SANTA FE State Auditor Wayne Johnson Tuesday designated the New Mexico Medical Insurance Pool (NMMIP) for a special audit going back five years to 2013. Johnson says the public deserves transparency from government entities like the insurance pool.
“I am deeply concerned with the Board’s lack of responsiveness regarding the requirement that it comply with the Audit Act,” says Johnson’s letter designating the Agency for audit.
The Office of the State Auditor wrote to the Pool in April 2017 asking for documentation demonstrating compliance with several aspects of the Audit Rule and state statute. That letter went without substantive response until Johnson’s office followed up soon after he took office. June 6, 2018, the Pool responded to the OSA, informing the office that they would not comply with the Audit Act.
Johnson says there are numerous indicators that the Pool is subject to audit as an instrumentality of the state. For example, the Pool already claims an exemption from federal taxes because it “provides an essential governmental function to its members” and is therefore exempt from federal taxes under Section 115 of the Internal Revenue Code.
“It is disingenuous for the NMMIP to claim on one hand that it is an instrumentality of the state for purposes of the IRS Code, while claiming it is not an instrumentality of the state for purposes of the transparency that the New Mexico Audit Act provides for public expenditures,” Johnson’s letter says.
Johnson set a deadline of August 25, 2018 for the Pool to initiate the audit process.
The New Mexico Medical Insurance Pool (NMMIP) was established by New Mexico State Legislature to provide access to health insurance coverage to residents of New Mexico who are denied health insurance and considered uninsurable. The number of New Mexicans covered by the Pool has dropped significantly over the years following the passage of the federal Affordable Care Act and Medicaid expansion in New Mexico.
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