Question 1

After conducting a business portfolio analysis, the Acorn Health Plan decided to pursue a harvest strategy with one of its strategic business units (SBUs)-Guest Behavioral Healthcare. By following a harvest strategy with Guest, Acorn most likely is seeking to

Accepted Answer

A)   Maximize Guest's short-term earnings and cash flow
B)   Increase Guest's market share
C)   Maintain Guest's market position
D)   Sacrifice immediate earnings in order to fund Guest's growth A

Question 2

Determine whether the following statement is true or false: Although most-favored-nation (MFN) clauses in contracts between health plans and healthcare providers are not per se illegal, they should be reviewed under the rule of reason analysis for antitrust purposes.

Accepted Answer

A)   True, because the Federal Trade Commission (FT
C)   ruled that MFN clauses are not per se illegal and the FTC encourages health plans to include them in provider contracts.
B)   True, because although MFN clauses are not per se illegal, they violate antitrust laws if they have a predatory purpose and an anticompetitive effect.
C)   False, because MFN clauses involve decisions by providers concerning the level of fees to charge, and thus they are per se illegal.
D)   False, because MFN clauses are not per se illegal, and thus they are exempt from antitrust laws and regulation by the FTC. B

Question 3

The Tidewater Life and Health Insurance Company is owned by its policy owners, who are entitled to certain rights as owners of the company, and it issues both participating and nonparticipating insurance policies. Tidewater is considering converting to the type of company that is owned by individuals who purchase shares of the company's stock. Tidewater is incorporated under the laws of Illinois, but it conducts business in the Canadian provinces of Ontario and Manitoba. With regard to the state in which Tidewater is domiciled, it is correct to say that, from the perspective of both Ontario and Manitoba, Tidewater is considered to be the type of corporation known as:

Accepted Answer

A)   A foreign corporation
B)   An alien corporation
C)   A sister corporation
D)   A domestic corporation B

Question 4

The National Association of Insurance Commissioners (NAIC) adopted the Health Maintenance Organization Model Act (HMO Model Act) to regulate the development and operations of HMOs. One true statement regarding the HMO Model Act is that the act

Accepted Answer

A)   includes mental health services in its definition of basic healthcare services
B)   authorizes only one state agency-the department of insurance-to regulate HMOs
C)   requires HMOs to place a deposit in trust with the state insurance commissioner for the purpose of protecting the interests of enrollees should an HMO become financially impaired
D)   requires HMOs that wish to offer a point-of-service (POS)  product to contract with a licensed insurance company to provide POS options to plan members

Question 5

SoundCare Health Services, a health plan, recently conducted a situation analysis. One step in this analysis required SoundCare to examine its current activities, its strengths and weaknesses, and its ability to respond to potential threats and opportunities in the environment. This activity provided SoundCare with a realistic appraisal of its capabilities. One weakness that SoundCare identified during this process was that it lacked an effective program for preventing and detecting violations of law. SoundCare decided to remedy this weakness by using the 1991 Federal Sentencing Guidelines for Organizations as a model for its compliance program. By definition, the activity that SoundCare conducted when it examined its strengths, weaknesses, and capabilities is known as

Accepted Answer

A)   An environmental analysis
B)   An internal assessment
C)   An environmental forecast
D)   A community analysis

Question 6

States may impose nominal deductibles, coinsurance, or copayments on some Medicaid recipients for certain services. Services for which states can require copayments from Medicaid recipients include:

Accepted Answer

A)   Emergency services
B)   Family planning services
C)   Both A and B
D)   A only
E)   B onlyF)  Neither A nor B

Question 7

Brighton Health Systems, Inc., a health plan, wants to modify its advertising and marketing materials to avoid liability risk under the principle of ostensible agency. One step that Brighton can take to reduce the likelihood of being liable for provider negligence under the theory of ostensibleagency is to

Accepted Answer

A)   Guarantee the quality of medical care provided to Brighton members
B)   Use advertising materials which state that Brighton itself provides healthcare
C)   Add disclaimers to advertising materials indicating that only physicians and not Brighton make medical decisions
D)   Use advertising materials to characterize Brighton's role as providing physicians, hospitals, and other healthcare professionals rather than arranging for healthcare.

Question 8

Nightingale Health Systems, a health plan, operates in a state that requires health plans to allow enrollees to visit obstetricians and gynecologists without a referral from a primary care provider. This information indicates that Nightingale must comply with a type of mandate known as a:

Accepted Answer

A)   Direct access law
B)   Scope-of-practice law
C)   Provider contracting mandate
D)   Physician incentive law

Question 9

The Balanced Budget Act (BBA) of 1997 created the Medicare+Choice plan. One provision of the BBA under Medicare+Choice is that the BBA

Accepted Answer

A)   Requires health plans to qualify as either a competitive medical plan (CMP)  or a federally qualified HMO in order to participate in the Medicare program
B)   Eliminates funding for demonstration projects such as the Medicare Enrollment Demonstration Project
C)   Narrows the geographic variations in payments to Medicare health plans by lowering the growth rate of payments in high-payment counties and raising the rates in low-payment counties
D)   Increases Graduate Medical Education (GM
E)   payments to hospitals for the training and cost of educating and training residents

Question 10

One provision of the Mental Health Parity Act of 1996 (MHPA) is that the MHPA prohibits group health plans from

Accepted Answer

A)   Setting a cap for a group member's lifetime medical health benefits that is higher than the cap for the member's lifetime mental health benefits
B)   Imposing limits on the number of days or visits for mental health treatment
C)   Charging deductibles for mental health benefits that are higher than the deductibles for medical benefits
D)   Imposing annual limits on the number of outpatient visits and inpatient hospital stays for mental health services

Question 11

Any willing provider laws have their share of proponents and opponents. Arguments commonly made in opposition to any willing provider laws include

Accepted Answer

A)   That such laws reduce the number of providers in a health plan's network
B)   That such laws limit consumer choice to coverage options that are more costly than networkbased plans
C)   That such laws encourage providers to offer discounts in exchange for patient volume
D)   All of the above

Question 12

The following statements appear in the Twilight Health Plan's strategic plan: Increase the percentage of preventive health interventions for total eligible membership during each of the next three calendar years for the following services: mammography, Pap smears, immunizations, and first trimester visits for prenatal mothers Improve customer satisfaction on an annual basis for each of the next three calendar years, as measured by satisfaction surveys for members, providers, and employer groups Increase by 30% the number of claims processed by the automated claim payment system and reduce by 10% the cost of paying claims during the next three years These statements are examples of Twilight's

Accepted Answer

A)   Corporate objectives
B)   Company mission
C)   Company vision
D)   Corporate strategies

Question 13

In the paragraph below, a statement contains two pairs of terms enclosed in parentheses. Determine which term in each pair correctly completes the statement. Then select the answer choice containing the two terms that you have chosen. In the case of Pacificare of Oklahoma, Inc. v. Burrage, the U.S. Court of Appeals for the Tenth Circuit considered whether ERISA preempts medical malpractice claims against health plans based on certain liability theories. In this case, the Tenth Circuit court held that ERISA (should /should not) preempt a liability claim against an HMO for the malpractice of one of its primary care physicians, and therefore the HMO was subject to a claim of (subordinated / vicarious) liability.

Accepted Answer

A)   Should / subordinated
B)   Should / vicarious
C)   Should not / subordinated
D)   Should not / vicarious

Question 14

From the following answer choices, choose the term that best corresponds to this description. Barrington Health Services, Inc. contracts with a state Medicaid agency as a fiscal intermediary. Barrington does not provide medical services, but contracts with medical providers on behalf of the state Medicaid agency.

Accepted Answer

A)   Health insuring organization (HIO) 
B)   Independent practice association (IP
A)  
C)   Physician practice management (PPM)  company
D)   Peer review organization (PRO)

Question 15

The following statements describe various state benefit mandates. Select the answer choice that describes a state law pertaining to off-label uses for drugs.

Accepted Answer

A)   State A mandates that health plans provide benefits for experimental drugs for the treatment of terminal diseases such as AIDS and cancer.
B)   State B mandates that health plans have a procedure in place to allow a patient to have a nonformulary drug covered under certain conditions.
C)   State C mandates that, in dispensing generic drugs, pharmacies must label drug containers with the name of the substituted generic medication.
D)   State D mandates that health plans provide benefits for the treatment of one form of cancer with specific drugs that had originally been approved by the Food and Drug Administration (FD
A)   to treat other forms of cancer.

Question 16

The following statements are about various provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Three of the statements are true and one statement is false. Select the answer choice that contains the FALSE statement.

Accepted Answer

A)   HIPAA permits group health plans that offer coverage through an HMO to impose affiliation periods during which no benefits or services are provided to a plan member.
B)   HIPAA created a new category of federal healthcare crimes, called federal healthcare offenses that apply to private healthcare plans as well as to federally funded healthcare programs.
C)   One effect of Section 231(h)  of HIPAA, which amended the Social Security Act, has been to permit health plans with Medicare contracts to provide enrollees with value-added services such as discounted memberships to health clubs.
D)   HIPAA provides that any fines and penalties recovered through regulatory proceedings to enforce the federal fraud and abuse statutes will be turned over to enforcement agencies to conduct additional investigations.

Question 17

Regulators of health plans have set standards in a number of areas of plan operations. Requirements with which health plans must comply typically include

Accepted Answer

A)   providing enrollees and prospective enrollees with detailed information about various aspects of health plan policies and operations
B)   maintaining internal grievance and appeals processes to resolve enrollee complaints against the organization
C)   maintaining quality assurance programs that reflect the plan's activities in monitoring quality
D)   all of the above

Question 18

The Tidewater Life and Health Insurance Company is owned by its policy owners, who are entitled to certain rights as owners of the company, and it issues both participating and nonparticipating insurance policies. Tidewater is considering converting to the type of company that is owned by individuals who purchase shares of the company's stock. Tidewater is incorporated under the laws of Illinois, but it conducts business in the Canadian provinces of Ontario and Manitoba. Tidewater established the Diversified Corporation, which then acquired various subsidiary firms that produce unrelated products and services. Tidewater remains an independent corporation and continues to own Diversified and the subsidiaries. In order to create and maintain a common vision and goals among the subsidiaries, the management of Diversified makes decisions about strategic planning and budgeting for each of the businesses. In order to become the type of company that is owned by people who purchase shares of the company's stock, Tidewater must undergo a process known as

Accepted Answer

A)   management buy-out
B)   piercing the corporate veil
C)   demutualization
D)   mutualization

Question 19

Certificate of need (CON) laws apply to health plans in a variety of ways, depending upon the state. By definition, CON laws are laws that are designed to

Accepted Answer

A)   Regulate the construction, renovation, and acquisition of healthcare facilities as well as the purchase of major medical equipment in a geographical area
B)   Protect commerce from unlawful restraint of trade, price discrimination, price fixing, reduced competition, and monopolies
C)   Determine benefit payments when a person is covered by more than one plan, such as two group health plans 12
D)   License and regulate health plans that wish to establish and operate an HMO

Question 20

Greenpath Health Services, Inc., an HMO, recently terminated some providers from its network in response to the changing enrollment and geographic needs of the plan. A provision in Greenpath's contracts with its healthcare providers states that Greenpath can terminate the contract at any time, without providing any reason for the termination, by giving the other party a specified period of notice. The state in which Greenpath operates has an HMO statute that is patterned on the NAIC HMO Model Act, which requires Greenpath to notify enrollees of any material change in its provider network. As required by the HMO Model Act, the state insurance department is conducting an examination of Greenpath's operations. The scope of the on-site examination covers all aspects of Greenpath's market conduct operations, including its compliance with regulatory requirements. From the following answer choices, select the response that identifies the type of market conduct examination that is being performed on Greenpath and the frequency with which the HMO Model Act requires state insurance departments to conduct an examination of an HMO's operations.

Accepted Answer

A)   Type of examination: comprehensive; Required frequency: annually
B)   Type of examination: comprehensive; Required frequency: at least every three years
C)   Type of examination: target; Required frequency: annually
D)   Type of examination: target; Required frequency: at least every three years

Exam 2: Governance and Regulation

After conducting a business portfolio analysis, the Acorn Health Plan decided to pursue a harvest strategy with one of its strategic business units (SBUs) -Guest Behavioral Healthcare. By following a harvest strategy with Guest, Acorn most likely is seeking to