Exam 3: Health Plan Finance and Risk Management

The methods of alternative funding for health coverage can be divided into the following general categories: Category A-Those methods that primarily modify traditional fully insured group insurance contracts Category B-Those methods that have either partial or total self funding Typically, small employers are able to use some of the alternative funding methods in

Provider reimbursement methods that transfer some utilization risk from a health plan to providers affect the health plan's RBC formula. A health plan's use of these reimbursement methods is likely to result in

The provider contract that Dr. Timothy Meyer, a pediatrician, has with the Cardigan health plan states that Cardigan will compensate him under a capitation arrangement. However, the contract also includes a typical low enrollment guarantee provision. Statements that can correctly be made about this arrangement include that the low enrollment guarantee provision most likely:

Bart Vereen is insured by both a traditional indemnity health insurance plan, which is his primary plan, and a managed care plan. Both plans have a typical coordination of benefits (COB) provision, but neither plan has a nonduplication of benefits provision

In accounting terminology, the items of value that a company owns-such as cash, cash equivalents, and receivables-are generally known as the company's

In most cases, medical errors are caused by breakdowns in the healthcare system rather than by provider mistakes.

Federal law addresses the relationship between Medicare- or Medicaid contracting health plans and providers who are at "substantial financial risk." Under federal law, Medicare- or Medicaid-contracting health plans

A product is often described as having a thin margin or a wide margin. With regard to the factors that help determine the size of the margin of a health plan's product, it can correctly be stated that the

Dr. Julia Phram is a cardiologist under contract to Holcomb HMO, Inc., a typical closed-panel plan. The following statements are about this situation. Select the answer choice containing the correct statement.

Al Marak, a member of the Frazier Health Plan, has asked for a typical Level One appeal of a decision that Frazier made regarding Mr. Marak's coverage. One true statement about this Level One appeal is that:

A particular health plan offers a higher level of benefits for services provided in-network than for out-of-network services. This health plan requires preauthorization for certain medical services.  With regard to the steps that the health plan's claims enforcement policy, clients:

The Harp Company self-funds the health plan for its employees. The plan is administered under a typical administrative-services-only (ASO) arrangement. One true statement about this ASO arrangement is that

Experience rating and manual rating are two rating methods that the Cheshire health plan uses to determine its premium rates. One difference between these two methods is that, under experience rating, Cheshire

With regard to a health plan's underwriting of groups, it can correctly be stated that, generally, a

HMOs typically employ several techniques to manage provider utilization and member utilization of medical services. One technique that an HMO uses to manage member utilization is

A stop-loss contract may provide that claims are settled using a paid claims method or an incurred claims method. The Concord Company provides health coverage to its employees through a selffunded health plan. On March 17, a Concord employee who is enrolled in this plan underwent surgery, and the surgery was sufficiently expensive to trigger Concord's specific stop-loss coverage. On April 10, Concord paid the medical expenses associated with the surgery. The term of the stop-loss contract ended on April 1. This information indicates that the stop-loss carrier is responsible for paying a portion of the cost of the surgery under

This concept, which holds that a company should record the amounts associated with its business transactions in monetary terms, assumes that the value of money is stable over time. This concept provides objectivity and reliability, although its relevance may fluctuate. From the following answer choices, choose the name of the accounting concept that matches the description.

An exclusive provider organization (EPO) operates much like a PPO. However, one difference between an EPO and a PPO is that an EPO

According to the IRS, which of the following is not an allowable preventive care service?

Appropriateness of treatment provided is determined by developing criteria that if unmet will prompt further investigation of a claim which are also called: