Question 1

The Challenger Group is a type of management services organization (MSO) that purchases the assets of physician practices, provides practice management and administrative support services to participating providers, and offers physicians a long-term contract and an equity position in Challenger. This information indicates that Challenger is a type of health plan

Accepted Answer

A)  Known as 
B)  An integrated delivery system (IDS) 
C)  Amedical foundation 
D)  Aprovider-sponsored organization (PSO) 
E)  Aphysician practice management (PPM) company

Question 2

From the following choices, choose the definition that best matches the term Screening

Accepted Answer

A)  A technique used to educate plan members on how to distinguish between minor problems and serious conditions and effectively treat minor problems themselves 
B)  A technique used to determine if a health condition is present even if a member has not experienced symptoms of the problem 
C)  A technique in which information about a plan member's health status, personal and family health history, and health-related behaviors is used to predict the member's likelihood of experiencing specific illnesses or injuries 
D)  A technique used to evaluate the medical necessity, appropriateness, and cost-effectiveness of healthcare services for a given patient

Question 3

Following a report by the Institute of Medicine on the incidence and consequences of medical errors, a national task force recommended implementation of a nationwide mandatory system of collecting, analyzing, reporting standardized information about medical errors that result in death or serious harm be established.  What kind of change will this system require?

Accepted Answer

A)  random change 
B)  structural change 
C)  haphazard change 
D)  reactive change

Question 4

Health plans' use of the Internet to provide plan members with health-related information has grown rapidly in recent years. One advantage the Internet has over other forms of communication is that

Accepted Answer

A)  users can access the Internet using a number of different types of computer systems 
B)  access to the Internet is available only to members of the health plan's network 
C)  the Internet is immune to internal security breaches by employees or trading partners within the network 
D)  users can contact a single controlling organization to rectify disruptions in Internet service

Question 5

Identify the CORRECT statement(s): (A) Smaller the group, the more likely it is that the group will experience losses similar to the average rate of loss that was predicted. (B) Gender of the group's participants has no effect on the likelihood of loss.

Accepted Answer

A)  All of the listed options 
B)  B & C 
C)  None of the listed options 
D)  A & C

Question 6

Most organizations that obtain group healthcare coverage can be classified as one of three types of groups: employer-employee groups, multiple employer groups, and professional associations. One true statement about these types of groups is that

Accepted Answer

A)  Anti selection risk is higher for both multiple-employer groups and professional associations than it is for an employer-employee group 
B)  Private employers typically present a higher underwriting risk to health plans than do public employers 
C)  Individual members of a multiple-employer group or a professional association typically are required to obtain healthcare coverage through the group or association 29 - 
D)  I health plan is prohibited, when evaluating the risks represented by a professional association, from considering the industry experience of the agent or broker that sells a group plan to the association

Question 7

In preparation for its expansion into a new service area, the Regal MCO is meeting with Dr. Nancy Buhner, a cardiologist who practices in Regal's new service area, in order to convince her to become one of the plan's participating providers. As part of the

Accepted Answer

A)  ensure that Dr. Buhner complies with all of the provisions of the Ethics in Patient Referrals Act 
B)  learn whether Dr. Buhner is a licensed medical practitioner 
C)  confirm Dr. Buhner's membership in the National Committee for Quality Assurance (NCQ
A)  
D)  learn whether Dr. Buhner has had a medical malpractice claim filed or other disciplinary actions taken against her

Question 8

The following statements are about risk management in health plans. Select the answer choice containing the correct response.

Accepted Answer

A)  Risk management is especially important to health plans because the Employee Retirement Income Security Act of 1974 (ERIS
A)  allows plan members to recover punitive damages from healthcare plans. 
B)  With regard to the relative risk for health plan structures based upon the degree of influence and relationships that health plans maintain with their providers, preferred provider organizations (PPOs) typically have a higher risk than do group HMOs and staff HMOs. 
C)  Although there are clear risks associated with the provision of healthcare services and coverage decisions surrounding that care, the bulk of risk in health plans is associated with a health plan's benefit administration and contracting activities. 
D)  A health plan generally structures its risk management process around loss reduction techniques and loss transfer techniques.

Question 9

A health plan that capitates a provider group typically provides or offers to provide stop-loss coverage to that provider group.

Accepted Answer

A) True 
 B)False

Question 10

A health plan's ability to establish an effective provider network depends on the characteristics of the proposed service area and the needs of proposed plan members. It is generally correct to say that

Accepted Answer

A)  health plans have more contracting options if providers are affiliated with single entities than if providers are affiliated with multiple entities 
B)  urban areas offer more flexibility in provider contracting than do rural areas 
C)  consumers and purchasers in markets with little health plan activity are likely to be more receptive to HMOs than to loosely managed plans such as PPOs 
D)  large employers tend to adopt health plans more slowly than do small companies

Question 11

In order to calculate a simple monthly capitation payment, the Argyle Health Plan used the following information: The average number of office visits each member makes in a year is two The FFS rate per office visit is $55 The member copayment is $5 per office visit The reimbursement period is one month Given this information, Argyle would correctly calculate that the per member per month (PMPM) capitation rate should be

Accepted Answer

A)  $4.17 
B)  $8.33 
C)  $9.17 
D)  $10.00

Question 12

Before an HMO contracts with a physician, the HMO first verifies the physician's credentials. Upon becoming part of the HMO's organized system of healthcare, the physician is typically subject to

Accepted Answer

A)  both recredentialing and peer review 
B)  recredentialing only 
C)  peer review only 
D)  neither recredentialing nor peer review

Question 13

Before the Hill Health Maintenance Organization (HMO) received a certificate of authority (COA) to operate in State X, it had to meet the state's licensing requirements and financial standards which were established by legislation that is identical to the

Accepted Answer

A)  Receive compensation based on the volume and variety of medical services they perform for Hill plan members, whereas the specialists receive compensation based solely on the number of plan members who are covered for specific services. 
B)  Have no financial incentive to practice preventive care or to focus on improving the health of their plan members, whereas the specialists have a positive incentive to help their plan members stay healthy. 
C)  Receive from the IPA the same monthly compensation for each Hill plan member under the PCP's care, whereas the specialists receive compensation based on a percentage discount from their normal fees. 
D)  Receive compensation based on a fee schedule, whereas the specialists receive compensation based on per diem charges.

Question 14

Eleanor Giambi is covered by a typical 24-hour managed care program. One characteristic of this program is that it:

Accepted Answer

A)  Provides Ms. Giambi with healthcare coverage for any illness or injury, but only if the cause of the illness or injury is work-related. 
B)  Combines the group health plan and disability plan offered by Ms. Giambi's employer with workers' compensation coverage. 
C)  Requires Ms. Giambi and her employer to each pay half of the cost of this coverage. 
D)  Requires Ms. Giambi to pay specified deductibles and copayments before receiving benefits under this program for any illness or injury.

Question 15

Ed O'Brien has both Medicare Part A and Part B coverage. He also has coverage under a PBM plan that uses a closed formulary to manage the cost and use of pharmaceuticals. Recently, Mr. O'Brien was hospitalized for an aneurysm. Later, he was transferred by:

Accepted Answer

A)  Confinement in the extended-care facility after his hospitalization. 
B)  Transportation by ambulance from the hospital to the extended-care facility. 
C)  Physicians' professional services while he was hospitalized. 
D)  physicians' professional services while he was at the extended-care facility.

Question 16

In 1999, the United States Congress passed the Financial Services Modernization Act, which is referred to as the Gramm-Leach-Bliley (GLB) Act. The following statement(s) can correctly be made about this act:

Accepted Answer

A)  The GLB Act allows convergence among the transaction 
B)  A only 
C)  Both A and B 
D)  B only 
E)  Neither A nor B

Question 17

The following statements are about federal laws and regulations which affect health plans that offer products and services to the employer group market. Select the answer choice containing the correct statement.

Accepted Answer

A)  Amendments to the HMO Act of 1973 require federally qualified HMOs to adjust a group's prior premiums on the basis of the group's experience during the prior rating period. 
B)  The Consolidated Omnibus Budget Reconciliation Act (COBR
A)  of 1986 requires that, if a plan sponsor elects to terminate its group coverage with a health plan, then the health plan must continue its coverage for the COBRA-qualified beneficiaries in the group. 
C)  The Health Insurance Portability and Accountability Act (HIPA
A)  of 1996 generally requires the guaranteed renewal of healthcare coverage for certain individuals and for both small and large groups, regardless of the health status of any member. 
D)  The Mental Health Parity Act (MHP
A)  of 1996 mandates that all health plans must offer benefits for mental healthcare.

Question 18

A medical foundation is a not-for-profit entity that purchases and manages physician practices. In order to retain its not-for-profit status, a medical foundation must

Accepted Answer

A)  Provide significant benefit to the community 
B)  Employ, rather than contract with, participating physicians 
C)  Achieve economies of scale through facility consolidation and practice management 
D)  Refrain from the corporate practice of medicine

Question 19

General HMO is building a provider network and is considering Universal Hospital as an addition to its network. Minimum requirements that General should consider in determining whether Universal is qualified to participate in General's network include A.

Accepted Answer

A)  Both A and B 
B)  A only 
C)  B only 
D)  Neither A nor B

Question 20

Health plans may use different capitation arrangements for different levels of service. One typical capitation arrangement provides a capitation payment that may include primary care only, or both primary and secondary care, but not ancillary services.  This type of capitation arrangement is known as a:

Accepted Answer

A)  global capitation arrangement 
B)  gatekeeper arrangement 
C)  carve-out arrangement 
D)  partial capitation arrangement

Exam 3: Health Plan Finance and Risk Management