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Free AHIP AHM-520 Practice Exam with Questions & Answers | Set: 4

Questions 31

The Raven Health Plan is domiciled in a state that requires the health plan to offer small employers and their employees a comprehensive healthcare benefit plan that approximates the healthcare benefits available to large employer-employee groups. This type of uniform benefit plan is known as:

Options:
A.

A basic plan

B.

A low-option plan

C.

A standard plan

D.

An essential plan

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Questions 32

The Arista Health Plan is evaluating the following four groups that have applied for group healthcare coverage:

  • The Blaise Company, a large private employer
  • The Colton County Department of Human Services (DHS)
  • A multiple-employer group comprised of four companies
  • The Professional Society of Daycare Providers

With respect to the relative degree of risk to Arista represented by these four companies, the company that would most likely expose Arista to the lowest risk is the:

Options:
A.

Blaise Company

B.

Colton County DHS

C.

Multiple-employer group

D.

Professional Society of Daycare Providers

Questions 33

A cost for which a benefit is forfeited in choosing one decision alternative over another alternative is known as

Options:
A.

A marginal unit cost

B.

An opportunity cost

C.

An incremental cost

D.

A differential cost

Questions 34

A primary reason that a financial analyst would measure the Tapestry health plan's return on assets (ROA) is to determine the

Options:
A.

Amount of net income per share of Tapestry's common stock

B.

Rate of return on the book value of the stockholders' investment in Tapestry

C.

Proportion of earnings paid out to Tapestry stockholders in the form of cash dividends

D.

Efficiency of Tapestry's management

Questions 35

The amount of risk for health plan products is dependent on the degree of influence and the relationships that the health plan maintains with its providers. Consider the following types of managed care structures:

  • Preferred provider organization (PPO)
  • Group model HMO
  • Staff model health maintenance organization (HMO)
  • Traditional health insurance

Of these health plan products, the one that would most likely expose a health plan to the highest risk is the:

Options:
A.

preferred provider organization (PPO)

B.

group model HMO

C.

staff model health maintenance organization (HMO)

D.

traditional health insurance

Questions 36

All publicly traded health plans in the United States are required to prepare financial statements for use by their external users in accordance with generally accepted accounting principles (GAAP). In addition, health insurers and health plans that fall under the jurisdiction of state insurance departments are required by law to prepare certain financial statements in accordance with statutory accounting practices (SAP). In a comparison of GAAP to SAP, it is correct to say that:

Options:
A.

GAAP is established and promoted by the National Association of Insurance Commissioners (NAIC), whereas SAP is established and promoted by the Financial Accounting Standards Board (FASB)

B.

The going-concern concept is an underlying premise of GAAP, whereas SAP tends to focus on the liquidation value of the MCO or the insurer

C.

GAAP provides for a single method of valuing all of a health plan’s assets, whereas SAP offers the health plan more than one method for valuing its assets

D.

The principle of conservatism is fundamental to GAAP, whereas SAP generally is not conservative in nature

Questions 37

In order to determine a health plan's quick liquidity ratio, a financial analyst would divide the health plan's

Options:
A.

Total assets not invested in affiliates by its total liabilities

B.

Liquid assets by its total liabilities

C.

Liquid assets by its contractual reserves

D.

Total assets by its contractual reserves

Questions 38

In evaluating the claims experience during a given rating period of the Lucky Company, the Calaway Health Plan determined that the claims incurred by Lucky were lower than Calaway anticipated when it established Lucky’s premium rate for the rating period. Calaway, therefore, refunded a portion of Lucky’s premium to reflect the better-than-anticipated claims experience. This rating method is known as:

Options:
A.

durational rating

B.

retrospective experience rating

C.

blended rating

D.

prospective experience rating

Questions 39

The following statements are about carve-out programs. Three of these statements are true, and one statement is false. Select the answer choice containing the FALSE statement.

Options:
A.

In the type of carve-out in which entire categories of care are administered by independent organizations, a health plan typically reimburses these organizations under an FFS contract.

B.

Typically, a health plan will offer carved-out services to its enrollees, but will manage these services separately.

C.

Carve-outs are services that are excluded from a capitation payment, a risk pool, or a health benefit plan.

D.

The most rapidly growing area related to carve-outs is disease management (DM).

Questions 40

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

Options:
A.

Place a provider at "substantial risk" whenever incentive arrangements put the provider at risk for amounts in excess of 10% of his or her total potential reimbursement for providing services to Medicare and Medicaid enrollees

B.

Must provide stop-loss coverage to a provider who is placed at "substantial financial risk" for services that the provider does not directly provide to Medicare or Medicaid enrollees

C.

Both A and B

D.

A only

E.

B only

F.

Neither A nor B

Exam Code: AHM-520
Certification Provider: AHIP
Exam Name: Health Plan Finance and Risk Management
Last Update: Feb 17, 2025
Questions: 215

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