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Master the Health Plan Finance and Risk Management AHM-520 Exam with Confidence!

Questions 1

This concept, which is an extension of the going-concern concept, holds that the value of an asset that a company reports in its accounting records should be the asset's historical cost, not its current market value. Although this concept offers objectivity and reliability, it may lack relevance, particularly for assets held for a long period of time.

From the following answer choices, choose the name of the accounting concept that matches the description.

Options:

A.

Measuring-unit concept

B.

Full-disclosure concept

C.

Cost concept

D.

Time-period concept

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Questions 2

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

Options:

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

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Questions 3

One law prohibits Dr. Laura Cole from making a referral to another provider entity for designated health services if Dr. Cole or one of her immediate family members has a financial relationship with the entity. This law is known as the

Options:

A.

safe harbor law

B.

upper payment limit law

C.

anti-kickback law

D.

physician self-referral law

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Questions 4

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

Options:

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

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Questions 5

The Brookhaven Company is the parent company of two subsidiaries: an HMO and an insurance company. The headings on Brookhaven's financial statements read "Consolidated Financial Statements of Brookhaven Company." From the following answer choices, select the response that correctly indicates, under the entity concept, whether the HMO and the insurance company are accounted for as separate entities and whether the subsidiaries' financial results would be included in Brookhaven's consolidated financial statements.

Options:

A.

Accounted for as Separate Entities? = yes

Results Included in Brookhaven's Statements? = yes

B.

Accounted for as Separate Entities? = yes

Results Included in Brookhaven's Statements? = no

C.

Accounted for as Separate Entities? = no

Results Included in Brookhaven's Statements? = yes

D.

Accounted for as Separate Entities? = no

Results Included in Brookhaven's Statements? = no

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Questions 6

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. Fiesta would correctly calculate that its blended rate PMPM for Murdock should be Fiesta's retention charge plus

Options:

A.

$152

B.

$188

C.

$192

D.

$228

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Questions 7

Residual trend is the difference between total trend and the portion of the total trend caused by changes in provider reimbursement levels.

Consider the following events that could affect an health plan’s provider reimbursement levels:

Event 1 — The disenrollment of a large group with unusually high utilization rates

Event 2 — The introduction of a new treatment for infertility

Event 3 — A serious flu epidemic

Event 4 — A shift in inpatient medical services from obstetrical care to neonatal intensive care

One cause of residual trend is change in intensity, which would be represented by:

Options:

A.

Event 1

B.

Event 2

C.

Event 3

D.

Event 4

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Questions 8

The Danner Bank loaned money to the CareWell Health Plan to fund an expansion of a healthcare facility. With respect to the type of financial information user Danner represents to CareWell, it is correct to say that Danner is an:

Options:

A.

Internal user with a direct financial interest

B.

Internal user with an indirect financial interest

C.

External user with a direct financial interest

D.

Case-mix adjustment

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Questions 9

The Swann Health Plan excludes mental health coverage from its basic health benefit plan. Coverage for mental health is provided by a specialty health plan called a managed behavioral health organization (MBHO). This arrangement recognizes the fact that distinct administrative and clinical expertise is required to effectively manage mental health services. This information indicates that Swann manages mental health services through the use of a:

Options:

A.

Formulary

B.

Risk pod

C.

Carve-out

D.

Case rate

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Questions 10

The Jade Health Plan used a profitability index (PI) to rank the following capital proposals:

Proposal PI

A0.45

B1.05

This information indicates that, of these two projects, Jade would most likely select:

Options:

A.

Proposal A, and the PI indicates that the net present value (NPV) for this project is less than zero

B.

Proposal A, and the PI indicates that the net present value (NPV) for this project is greater than zero

C.

Proposal B, and the PI indicates that the net present value (NPV) for this project is less than zero

D.

Proposal B, and the PI indicates that the net present value (NPV) for this project is greater than zero

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Exam Code: AHM-520
Exam Name: Health Plan Finance and Risk Management
Last Update: Jun 14, 2024
Questions: 215

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