AHM-520 Certification Guide

1. http://www.certschief.comCertification Preparation Material AHIP AHM-520 Health Plan Finance and Risk Management Demo Product - For More Information - Visit: http://www.certschief.com/exam/AHM-520/ Edition = DEMO ProductFull Version Features:  90 Days Free Updates  30 Days Money Back Guarantee  Instant Download Once Purchased  24/7 Online Chat Support Page | 1 http://www.certschief.com/exam/AHM-520/

2. http://www.certschief.comCertification Preparation Material Question: 1 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 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 Answer: D Question: 2 The Eclipse Health Plan is a not-for-profit health plan that qualifies under the Internal Revenue Code for tax-exempt status. This information indicates that Eclipse A. Has only one potential source of funding: borrowing money B. Does not pay federal, state, or local taxes on its earnings C. Must distribute its earnings to its owners-investors for their personal gain D. Is a privately held corporation Answer: B Question: 3 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 A. Known as B. An integrated delivery system (IDS) C. Amedical foundation D. Aprovider-sponsored organization (PSO) E. Aphysician practice management (PPM) company Answer: D Question: 4 A key factor that distinguishes the various types of health plans is the type and amount of risk that a health plan assumes with respect to the delivery and financing of healthcare benefits. An example of a type of health plan that typically assumes the financial risk of delivering and financing healthcare benefits is a A. Third party administrator (TPA) B. Utilization review organization (URO) Page | 2 http://www.certschief.com/exam/AHM-520/

3. http://www.certschief.comCertification Preparation Material C. Preferred provider organization (PPO) D. Pharmacy benefit management (PBM) plan Answer: C Question: 5 The following statements are about pure risk and speculative risk—two kinds of risk that both businesses and individuals experience. Select the answer choice containing the correct statement. A. Healthcare coverage is designed to help plan members avoid pure risk, not speculative risk. B. Only pure risk involves the possibility of gain. C. An example of speculative risk is the possibility that an individual will contract a serious illness. D. Only speculative risk contains an element of uncertainty. Answer: A Question: 6 The following paragraph contains an incomplete statement. Select the answer choice containing the term that correctly completes the statement. Health plans face four contingency risks (C-risks): asset risk (C-1), pricing risk (C- 2), interest-rate risk (C-3), and general management risk (C-4). Of these risks, ________________ is typically the most important risk that health plans face. This is true because a sizable portion of the total expenses and liabilities faced by a health plan come from contractual obligations to pay for future medical costs, and the exact amount of these costs is not known when the healthcare coverage is priced. A. Asset risk (C-1) B. Pricing risk (C-2) C. Interest-rate risk (C-3) D. General management risk (C-4) Answer: B Question: 7 The Health Maintenance Organization (HMO) Model Act, developed by the National Association of Insurance Commissioners (NAIC), represents one approach to developing solvency standards. One drawback to this type of solvency regulation is that it A. Uses estimates of future expenditures and premium income to estimate future risk B. Fails to adjust the solvency requirement to account for the size of an HMO's premiums and expenditures C. Assumes that the amount of premiums an HMO charges always directly corresponds to the level of the risk that the HMO faces D. Fails to mandate a minimum level of capital and surplus that an HMO must maintain Answer: C Question: 8 The NAIC has developed a risk-based capital (RBC) formula for all health plans that accept risk. One true statement about the RBC formula for health plans is that it A. is a set of calculations, based on information in a health plan's annual financial report, that yields a target capital requirement for the organization B. fails to take into account a health plan's underwriting risk, which is the risk that Page | 3 http://www.certschief.com/exam/AHM-520/

4. http://www.certschief.comCertification Preparation Material the premiums the health plan receives will be insufficient to pay for the healthcare services it provides to its plan members C. applies to all health plans in the United States D. fails to assess the specific level of risk faced by each health plan Answer: A Question: 9 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 A. An increase the health plan's underwriting risk B. A decrease the health plan's credit risk C. A decrease the health plan's net worth requirement D. All of the above Answer: C Question: 10 Three general strategies that health plans use for controlling types of risk are risk avoidance, risk transfer, and risk acceptance. The following statements are about these strategies. Three of these statements are true, and one statement is false. Select the answer choice containing the FALSE statement. A. Generally, the smaller the likely benefits of accepting a risk, and the lower the costs of avoiding that risk, the greater the likelihood that a health plan will elect to avoid the risk. B. A health plan is seldom able to transfer any of the risk that utilization rates will be higher than expected and that its cost of providing healthcare will exceed the revenues it receives. C. If a risk is a pure risk from the point of view of a health plan, then the health plan most likely will attempt to avoid the risk. D. A health plan would most likely transfer some or all of its utilization risk if it pays a provider a rate that is based on the number of plan enrollees that choose the provider as their primary care provider (PCP). Answer: B Question: 11 Under the doctrine of corporate negligence, a health plan and its physician administrators may be held directly liable to patients or providers for failing to investigate adequately the competence of healthcare providers whom it employs or with whom it contracts, particularly where the health plan actually provides healthcare services or restricts the patient's/enrollee's choice of physician. A. True B. False Answer: A Question: 12 The Eagle health plan wants to limit the possibility that it will be held vicariously liable for the negligent acts of providers. Dr. Michael Chan is a member of an independent practice association (IPA) that has contracted with Eagle. One step that Eagle could take in order to limit its exposure under the theory of vicarious liability is to Page | 4 http://www.certschief.com/exam/AHM-520/

5. http://www.certschief.comCertification Preparation Material A. Supply Dr. Chan with office space B. Employ nurses, laboratory technicians, and therapists to support Dr.Chan C. Be responsible for keeping Dr. Chan's medical records updated D. Ensure that documents provided to Dr. Chan's patients describe him as an independent practitioner Answer: D Question: 13 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 A. 1, 2, and 3 B. 1 and 2 only C. 1 and 3 only D. 2 and 3 only Answer: D Question: 14 The following statements are about risk management in health plans. Select the answer choice containing the correct response. A. Risk management is especially important to health plans because the Employee Retirement Income Security Act of 1974 (ERISA) 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. Answer: D Question: 15 Several federal agencies establish rules and requirements that affect health plans. One of these agencies is the Department of Labor (DOL), which is primarily responsible for _________. A. Issuing regulations pertaining to the Health Insurance Portability and Accountability Act (HIPAA) of 1996 B. Administering the Medicare and Medicaid programs C. Administering ERISA, which imposes various documentation, appeals, reporting, and disclosure requirements on employer group health plans Page | 5 http://www.certschief.com/exam/AHM-520/

6. http://www.certschief.comCertification Preparation Material D. Administering the Federal Employees Health BenefitsProgram (FEHBP), which providesvoluntary health insurance coverage to federal employees, retirees, and dependents Answer: C Question: 16 The Atoll Health Plan must comply with a number of laws that directly affect the plan's contracts. One of these laws allows Atoll's plan members to receive medical services from certain specialists without first being referred to those specialists by a primary care provider (PCP). This law, which reduces the PCP's ability to manage utilization of these specialists, is known as _________. A. A due process law B. An any willing provider law C. A direct access law D. A fair procedure law Answer: C Question: 17 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 __________. 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 Answer: B Question: 18 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 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 Answer: D Question: 19 The Acorn Health Plan uses a resource-based relative value scale (RBRVS) to help determine the reimbursement amounts that Acorn should make to providers who are compensated under an FFS system. With regard to the advantages and disadvantages to Acorn of using RBRVS, it can correctly be stated that A. An advantage of using RBRVS is that it can assist Acorn in developing reimbursement schedules for various types of providers in a comprehensive healthcare plan B. An advantage of using RBRVS is that it puts providers who render more medical services than necessary at financial risk for this overutilization Page | 6 http://www.certschief.com/exam/AHM-520/

7. http://www.certschief.comCertification Preparation Material C. A disadvantage of using RBRVS is that it will be difficult for Acorn to track treatment rates for the health plan's quality and cost management functions D. A disadvantage of using RBRVS is that it rewards procedural healthcare services more than cognitive healthcare services Answer: A Question: 20 Health plans sometimes use global fees to reimburse providers. Health plans would use this method of provider reimbursement for all of the following reasons EXCEPT that global fees A. Eliminate any motivation the providermay have to engage in churning B. Transfer some of the risk of overutilization of care from the health plan to the providers C. Eliminate the practice of upcoding within specific treatments D. Reward providers who deliver cost-effective care Answer: A Page | 7 http://www.certschief.com/exam/AHM-520/

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