Question 1

In health plan terminology, demand management, as used by health plans, can best be described as

Accepted Answer

A)  an evaluation of the medical necessity, efficiency, and/or appropriateness of healthcare services and treatment plans for a given patient 
B)  a series of strategies designed to reduce plan members' needs to utilize healthcare services by encouraging preventive care, wellness, member self-care, and appropriate use of healthcare services 
C)  a technique that prevents a provider who is being reimbursed under a fee schedule arrangement from billing a plan member for any fees that exceed the maximum fee reimbursed by the plan 
D)  a system of identifying plan members with special healthcare needs, developing a healthcare strategy to meet those needs, and coordinating and monitoring the care 
A)  an evaluation of the medical necessity, efficiency, and/or appropriateness of healthcare services and treatment plans for a given patient 
B)  a series of strategies designed to reduce plan members' needs to utilize healthcare services by encouraging preventive care, wellness, member self-care, and appropriate use of healthcare services 
C)  a technique that prevents a provider who is being reimbursed under a fee schedule arrangement from billing a plan member for any fees that exceed the maximum fee reimbursed by the plan 
D)  a system of identifying plan members with special healthcare needs, developing a healthcare strategy to meet those needs, and coordinating and monitoring the care

Question 2

Rasheed Azari, the risk manager for the Tower health plan, is attempting to work with providers in the organization in order to reduce the providers' exposure related to utilization review. Mr. Azari is considering advising the providers to take the following actions: 1-Allow Tower's utilization management decisions to override a physician's independent medical judgment 2-Support the development of a system that can quickly render a second opinion in case of disagreement surrounding clinical judgment 3-Inform a patient of any issues that are being disputed relative to a physician's recommended treatment plan and Tower's coverage decision Of these possible actions, the ones that are likely to reduce physicians' exposures related to utilization review include actions

Accepted Answer

A)  1, 2, and 3 
B)  1 and 2 only 
C)  1 and 3 only 
D)  2 and 3 only 
A)  1, 2, and 3 
B)  1 and 2 only 
C)  1 and 3 only 
D)  2 and 3 only

Question 3

Bill Clinton is a member of Lewinsky's PBM plan which has a three-tier copayment structure. Bill fell ill and his doctor prescribed him AAA, a brand-name drug which was included in the Lewinsky's formulary; BBB, a non-formulary drug; and CCC, a generic drug.  In which order, from most preferred to least, is the preferred drug of choice for this coverage?

Accepted Answer

A)  CCC, AAA, BBB 
B)  BBB, CCC, AAA 
C)  BBB, AAA, CCC 
D)  CCC, BBB, AAA 
A)  CCC, AAA, BBB 
B)  BBB, CCC, AAA 
C)  BBB, AAA, CCC 
D)  CCC, BBB, AAA

Question 4

Arthur Moyer is covered under his employer's group health plan, which must comply with the Consolidated Omnibus Budget Reconciliation Act (COBRA). Mr. Moyer is terminating his employment. He has elected to continue his coverage under his employer's group

Accepted Answer

A)  18 months, but his coverage under COBRA will cease if he obtains group health coverage through another employer. 
B)  18 months, even if he obtains group health coverage through another employer. 
C)  36 months, but his coverage under COBRA will cease if he obtains group health coverage through another employer. 
D)  36 months, even if he obtains group health coverage through another employer. 
A)  18 months, but his coverage under COBRA will cease if he obtains group health coverage through another employer. 
B)  18 months, even if he obtains group health coverage through another employer. 
C)  36 months, but his coverage under COBRA will cease if he obtains group health coverage through another employer. 
D)  36 months, even if he obtains group health coverage through another employer.

Question 5

After a somewhat modest start in 2004, enrollment in HSA-related health plans more than tripled in 2005, making them today's fastest growing type of CDHP. As of January 2006, enrollment in HSAs had reached nearly:

Accepted Answer

A)  1.2 million 
B)  2.2 million 
C)  3.2 million 
D)  4.2 million 
A)  1.2 million 
B)  2.2 million 
C)  3.2 million 
D)  4.2 million

Question 6

As part of its utilization management (UM) system, the Creole Health Plan uses a process known as case management. The following individuals are members of the Creole Health Plan: -Jill Novacek, who has a chronic respiratory condition. -Abraham Rashad.

Accepted Answer

A)  Ms. Novacek, Mr. Rashad, and Mr. Devereaux 
B)  Ms. Novacek and Mr. Rashad only 
C)  Ms. Novacek and Mr. Devereaux only 
D)  None of these members 
A)  Ms. Novacek, Mr. Rashad, and Mr. Devereaux 
B)  Ms. Novacek and Mr. Rashad only 
C)  Ms. Novacek and Mr. Devereaux only 
D)  None of these members

Question 7

Because a health plan cannot decline coverage for individuals who are eligible for conversion of group health coverage to individual health coverage, the bulk of the health plan's underwriting for conversion policies is accomplished through health plan design.

Accepted Answer

A) True 
 B)False

Question 8

Kevin Olin applied for individual healthcare coverage from the Mercury health plan. Before issuing the policy, Mercury's underwriters attached a rider that excludes from coverage any loss that results from Mr. Olin's chronic knee problem. This information indicates that Mr. Olin's policy includes

Accepted Answer

A)  a moral hazard rider 
B)  an essential plan rider 
C)  an impairment rider 
D)  an insurable interest rider 
A)  a moral hazard rider 
B)  an essential plan rider 
C)  an impairment rider 
D)  an insurable interest rider

Question 9

The following statements are about a health plan's underwriting of small groups. Select the answer choice containing the correct statement.

Accepted Answer

A)  Almost all states prohibit health plan s from rejecting a small group because of the nature of the business in which the small business is engaged. 31 
B)  Most states prohibit health plans from setting participation levels as a requirement for coverage, even when coverage is otherwise guaranteed issue. 
C)  In underwriting small groups, a health plan's underwriters typically consider both the characteristics of the group members and of the employer. 
D)  Generally, a health plan's underwriters require small employers to contribute at least 80% of the cost of the healthcare coverage. 
A)  Almost all states prohibit health plan s from rejecting a small group because of the nature of the business in which the small business is engaged. 31 
B)  Most states prohibit health plans from setting participation levels as a requirement for coverage, even when coverage is otherwise guaranteed issue. 
C)  In underwriting small groups, a health plan's underwriters typically consider both the characteristics of the group members and of the employer. 
D)  Generally, a health plan's underwriters require small employers to contribute at least 80% of the cost of the healthcare coverage.

Question 10

The physicians who work for the Sunrise Health Plan, a staff model HMO, are paid a salary that is not augmented with another type of incentive plan. Compared to the use of a traditional reimbursement method, Sunrise's use of a salary reimbursement method is more likely to

Accepted Answer

A)  Encourage Sunrise's physicians to perform services that are not medically necessary 
B)  Completely eliminate service risk for Sunrise's physicians 
C)  Decrease Sunrise's liability for any negligent acts of the physicians in the plan's network of providers 
D)  Help stabilize expenses for Sunrise 
A)  Encourage Sunrise's physicians to perform services that are not medically necessary 
B)  Completely eliminate service risk for Sunrise's physicians 
C)  Decrease Sunrise's liability for any negligent acts of the physicians in the plan's network of providers 
D)  Help stabilize expenses for Sunrise

Question 11

Greentree Medical, a health plan, is currently recruiting PCPs in preparation for its expansion into a new service area. Abigail Davis, a recruiter for Greentree, has been meeting with Melissa Cortelyou, M.D., in an effort to recruit her as a PCP in Green

Accepted Answer

A)  Greentree is prevented by law from offering a contract to Dr. Cortelyou until the credentialing process is complete 
B)  any contract signed by Dr. Cortelyou should include a clause requiring the successful completion of the credentialing process within a defined time frame in order for the contract to be effective 
C)  Greentree must offer a standard contract to Dr. Cortelyou, without regard to the outcome of the credentialing process 
D)  Greentree will abandon the credentialing process now that Dr. Cortelyou has agreed to participate in Greentree's network 
A)  Greentree is prevented by law from offering a contract to Dr. Cortelyou until the credentialing process is complete 
B)  any contract signed by Dr. Cortelyou should include a clause requiring the successful completion of the credentialing process within a defined time frame in order for the contract to be effective 
C)  Greentree must offer a standard contract to Dr. Cortelyou, without regard to the outcome of the credentialing process 
D)  Greentree will abandon the credentialing process now that Dr. Cortelyou has agreed to participate in Greentree's network

Question 12

Users of the Fulcrum Health Plan financial information include: The independent auditors who review Fulcrum's financial statements Fulcrum's controller (comptroller) Fulcrum's plan members The providers that deliver healthcare services to Fulcrum plan members Fulcrum's competitors Of these users, the ones that most likely can correctly be classified as external users with a direct financial interest in Fulcrum are the

Accepted Answer

A)  Independent auditors, the plan members, the providers, and the 
B)  Competitors only 
C)  Independent auditors, the controller, and the providers only 
D)  Controller and the competitors only 
E)  Plan members and the providers only 
A)  Independent auditors, the plan members, the providers, and the 
B)  Competitors only 
C)  Independent auditors, the controller, and the providers only 
D)  Controller and the competitors only 
E)  Plan members and the providers only

Question 13

By definition, a health plan's network refers to the:

Accepted Answer

A)  organizations and individuals involved in the consumption of healthcare provided by the plan 
B)  relative accessibility of the plan's providers to the plan's participants 
C)  group of physicians, hospitals, and other medical care providers with whom the plan has contracted to deliver medical services to its members 
D)  integration of the plan's participants with the plan's providers 
A)  organizations and individuals involved in the consumption of healthcare provided by the plan 
B)  relative accessibility of the plan's providers to the plan's participants 
C)  group of physicians, hospitals, and other medical care providers with whom the plan has contracted to deliver medical services to its members 
D)  integration of the plan's participants with the plan's providers

Question 14

The reimbursement arrangement that Dr. Caroline Monroe has with the Exmoor Health Plan includes a typical withhold arrangement. One true statement about this withhold arrangement is that, for a given financial period,

Accepted Answer

A)  Dr. Monroe and Exmoor are equally responsible for making up the difference if cost overruns exceed the amount of money withheld 
B)  Exmoor most likely distributes to Dr. Monroe the entire amount withheld from her if her costs are below the amount budgeted for the period 
C)  Exmoor pays Dr. Monroe at the end of the period an amount over and above her usual reimbursement, and this amount is based on the performance of the plan as a whole 
D)  Exmoor most likely withholds between 3% and 5% of Dr. Monroe's total reimbursement 
A)  Dr. Monroe and Exmoor are equally responsible for making up the difference if cost overruns exceed the amount of money withheld 
B)  Exmoor most likely distributes to Dr. Monroe the entire amount withheld from her if her costs are below the amount budgeted for the period 
C)  Exmoor pays Dr. Monroe at the end of the period an amount over and above her usual reimbursement, and this amount is based on the performance of the plan as a whole 
D)  Exmoor most likely withholds between 3% and 5% of Dr. Monroe's total reimbursement

Question 15

The Caribou health plan is a for-profit organization. The financial statements that Caribou prepares include balance sheets, income statements, and cash flow statements. To prepare its cash flow statement, Caribou begins with the net income figure as reported on its income statement and then reconciles this amount to operating cash flows through a series of adjustments. Changes in Caribou's cash flow occur as a result of the health plan's operating activities, investing activities, and financing activities. Caribou is engaged in an operating activity when it

Accepted Answer

A)  Purchases or sells assets of the health plan 
B)  Disposes of a subsidiary 
C)  Repays funds loaned by its creditors 
D)  Pays expenses associated with the healthcare services provided to its members 
A)  Purchases or sells assets of the health plan 
B)  Disposes of a subsidiary 
C)  Repays funds loaned by its creditors 
D)  Pays expenses associated with the healthcare services provided to its members

Question 16

In order to measure the expenses of institutional utilization, Holt Healthcare Group uses the standard formula to calculate hospital bed days per 1,000 plan members per year. On October 23, Holt used the following information to calculate the bed days per

Accepted Answer

A)  278 
B)  397 
C)  403 
D)  920 
A)  278 
B)  397 
C)  403 
D)  920

Question 17

State A, which requires guaranteed issue of at least two mandated healthcare plans, has established a typical health coverage reinsurance program for small employer groups. One true statement about this reinsurance program is that it most likely

Accepted Answer

A)  is administered by a commercial reinsurance company that operates in State A 
B)  allows a small employer carrier operating in State A to reinsure either an entire small group or specific individuals within the group 
C)  has, for the coverage on a plan, a base premium, which is multiplied by a factor of 2 in the case of reinsurance on entire groups or a factor of 3 for reinsurance on individuals 
D)  prohibits a small employer carrier operating in State A from placing individuals enrolled in small groups in a reinsurance pool 32 
A)  is administered by a commercial reinsurance company that operates in State A 
B)  allows a small employer carrier operating in State A to reinsure either an entire small group or specific individuals within the group 
C)  has, for the coverage on a plan, a base premium, which is multiplied by a factor of 2 in the case of reinsurance on entire groups or a factor of 3 for reinsurance on individuals 
D)  prohibits a small employer carrier operating in State A from placing individuals enrolled in small groups in a reinsurance pool 32

Question 18

The Fiesta Health Plan prices its products in such a way that the rates for its products are reasonable, adequate, equitable, and competitive. Fiesta is using blended rating to calculate a premium rate for the Murdock Company, a large employer. Fiesta has assigned a credibility factor of 0.6 to Murdock. Fiesta has also determined that Murdock's manual rate is $200 PMPM and that Murdock's experience rate is $180 PMPM. According to regulations, Fiesta's premium rates are reasonable if they

Accepted Answer

A)  vary only on the factors that affect Fiesta's costs 
B)  are at a level that balances Fiesta's need to generate a profit against its need to obtain or retain a specified share of the market in which it conducts business 
C)  are high enough to ensure that Fiesta has enough money on hand to pay operating expenses as they come due 
D)  do not exceed what Fiesta needs to cover its costs and provide the plan with a fair profit 
A)  vary only on the factors that affect Fiesta's costs 
B)  are at a level that balances Fiesta's need to generate a profit against its need to obtain or retain a specified share of the market in which it conducts business 
C)  are high enough to ensure that Fiesta has enough money on hand to pay operating expenses as they come due 
D)  do not exceed what Fiesta needs to cover its costs and provide the plan with a fair profit

Question 19

As part of the first step in its strategic planning process, the Trout health plan developed the following statements: Statement A-Trout will deliver quality healthcare to our customers at a reasonable cost. Statement B-Within five years, Trout will be recognized as the industry leader in all of our markets. Statement A can best be described as a

Accepted Answer

A)  Vision statement, and Statement B also can best be described as a vision statement 
B)  Vision statement, whereas Statement B can best be described as a mission statement 
C)  Mission statement, whereas Statement B can best be described as a vision statement 
D)  Mission statement, and Statement B also can best be described as a mission statement 
A)  Vision statement, and Statement B also can best be described as a vision statement 
B)  Vision statement, whereas Statement B can best be described as a mission statement 
C)  Mission statement, whereas Statement B can best be described as a vision statement 
D)  Mission statement, and Statement B also can best be described as a mission statement

Question 20

Mandated benefit laws are state or federal laws that require health plans to arrange for the financing and delivery of particular benefits. Within a market, the implementation of mandated benefit laws is likely to cause __________.

Accepted Answer

A)  A reduction in the number of self-funded healthcare plans 
B)  An increase in the cost to the health plans 
C)  A reduction in the size of the provider panels of health plans 
D)  A reduction in the uniformity among the healthcare plans of competing health plans 
A)  A reduction in the number of self-funded healthcare plans 
B)  An increase in the cost to the health plans 
C)  A reduction in the size of the provider panels of health plans 
D)  A reduction in the uniformity among the healthcare plans of competing health plans

In health plan terminology, demand management, as used by health plans, can best be described as

Arthur Moyer is covered under his employer's group health plan, which must comply with the Consolidated Omnibus Budget Reconciliation Act (COBRA). Mr. Moyer is terminating his employment. He has elected to continue his coverage under his employer's group

After a somewhat modest start in 2004, enrollment in HSA-related health plans more than tripled in 2005, making them today's fastest growing type of CDHP. As of January 2006, enrollment in HSAs had reached nearly:

As part of its utilization management (UM) system, the Creole Health Plan uses a process known as case management. The following individuals are members of the Creole Health Plan: -Jill Novacek, who has a chronic respiratory condition. -Abraham Rashad.

Because a health plan cannot decline coverage for individuals who are eligible for conversion of group health coverage to individual health coverage, the bulk of the health plan's underwriting for conversion policies is accomplished through health plan design.

Kevin Olin applied for individual healthcare coverage from the Mercury health plan. Before issuing the policy, Mercury's underwriters attached a rider that excludes from coverage any loss that results from Mr. Olin's chronic knee problem. This information indicates that Mr. Olin's policy includes

The following statements are about a health plan's underwriting of small groups. Select the answer choice containing the correct statement.

The physicians who work for the Sunrise Health Plan, a staff model HMO, are paid a salary that is not augmented with another type of incentive plan. Compared to the use of a traditional reimbursement method, Sunrise's use of a salary reimbursement method is more likely to

Greentree Medical, a health plan, is currently recruiting PCPs in preparation for its expansion into a new service area. Abigail Davis, a recruiter for Greentree, has been meeting with Melissa Cortelyou, M.D., in an effort to recruit her as a PCP in Green

By definition, a health plan's network refers to the:

The reimbursement arrangement that Dr. Caroline Monroe has with the Exmoor Health Plan includes a typical withhold arrangement. One true statement about this withhold arrangement is that, for a given financial period,

In order to measure the expenses of institutional utilization, Holt Healthcare Group uses the standard formula to calculate hospital bed days per 1,000 plan members per year. On October 23, Holt used the following information to calculate the bed days per

State A, which requires guaranteed issue of at least two mandated healthcare plans, has established a typical health coverage reinsurance program for small employer groups. One true statement about this reinsurance program is that it most likely

Mandated benefit laws are state or federal laws that require health plans to arrange for the financing and delivery of particular benefits. Within a market, the implementation of mandated benefit laws is likely to cause __________.

AHM Medical Management

Governance and Regulation

Network Management

Filters

Exam 3: Health Plan Finance and Risk Management

In health plan terminology, demand management, as used by health plans, can best be described as

Arthur Moyer is covered under his employer's group health plan, which must comply with the Consolidated Omnibus Budget Reconciliation Act (COBRA). Mr. Moyer is terminating his employment. He has elected to continue his coverage under his employer's group

After a somewhat modest start in 2004, enrollment in HSA-related health plans more than tripled in 2005, making them today's fastest growing type of CDHP. As of January 2006, enrollment in HSAs had reached nearly:

As part of its utilization management (UM) system, the Creole Health Plan uses a process known as case management. The following individuals are members of the Creole Health Plan: -Jill Novacek, who has a chronic respiratory condition. -Abraham Rashad.

Because a health plan cannot decline coverage for individuals who are eligible for conversion of group health coverage to individual health coverage, the bulk of the health plan's underwriting for conversion policies is accomplished through health plan design.

Kevin Olin applied for individual healthcare coverage from the Mercury health plan. Before issuing the policy, Mercury's underwriters attached a rider that excludes from coverage any loss that results from Mr. Olin's chronic knee problem. This information indicates that Mr. Olin's policy includes

The following statements are about a health plan's underwriting of small groups. Select the answer choice containing the correct statement.

The physicians who work for the Sunrise Health Plan, a staff model HMO, are paid a salary that is not augmented with another type of incentive plan. Compared to the use of a traditional reimbursement method, Sunrise's use of a salary reimbursement method is more likely to

Greentree Medical, a health plan, is currently recruiting PCPs in preparation for its expansion into a new service area. Abigail Davis, a recruiter for Greentree, has been meeting with Melissa Cortelyou, M.D., in an effort to recruit her as a PCP in Green

By definition, a health plan's network refers to the:

The reimbursement arrangement that Dr. Caroline Monroe has with the Exmoor Health Plan includes a typical withhold arrangement. One true statement about this withhold arrangement is that, for a given financial period,

In order to measure the expenses of institutional utilization, Holt Healthcare Group uses the standard formula to calculate hospital bed days per 1,000 plan members per year. On October 23, Holt used the following information to calculate the bed days per

State A, which requires guaranteed issue of at least two mandated healthcare plans, has established a typical health coverage reinsurance program for small employer groups. One true statement about this reinsurance program is that it most likely

Mandated benefit laws are state or federal laws that require health plans to arrange for the financing and delivery of particular benefits. Within a market, the implementation of mandated benefit laws is likely to cause __________.

AHM Medical Management

Governance and Regulation

Network Management

Filters