Improved AHM-510 Preparation For Governance And Regulation Certification

NEW QUESTION 1
Antitrust laws can affect the formation, merger activities, or acquisition initiatives of a health plan. In the United States, the two federal agencies that have the primary responsibility for enforcing
antitrust laws are the

• A. Internal Revenue Service (IRS) and the Department of Justice (DOJ)
• B. Office of Inspector General (OIG) and the Department of Defense (DOD)
• C. Federal Trade Commission (FTC) and the Department of Labor (DOL)
• D. Federal Trade Commission (FTC) and the Department of Justice (DOJ)

Answer: D

NEW QUESTION 2
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.

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

Answer: A

NEW QUESTION 3
In examining accountability in the current managed care environment, one is likely to find that combinations of various models of accountability are in operation. Under one model of accountability, the primary mechanisms for accountability are the mechanisms of the marketplace- failure to meet standards will result in a loss of demand for services. By definition, this model of accountability is called the

• A. Professional model of accountability
• B. Political model of accountability
• C. Due diligence model of accountability
• D. Economic model of accountability

Answer: D

NEW QUESTION 4
The Wentworth Corporation uses a self-funded plan to provide its employees with healthcare
benefits. One consequence of Wentworth's approach to providing healthcare benefits is that selffunding

• A. Requires that Wentworth self-administer its healthcare benefit plan
• B. Requires that Wentworth pay higher state premium taxes than do insurers and health plans
• C. Eliminates the need for Wentworth to pay a risk charge to an insurer or health plan
• D. Increases the number of benefit and rating mandates that apply to Wentworth's plan

Answer: C

NEW QUESTION 5
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.

• 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.

Answer: C

NEW QUESTION 6
In the course of doing business, health plans conduct basic corporate transactions. For example, when a health plan engages in the corporate transaction known as aggressive sourcing, the health plan

• A. Chooses to contract with vendors who provide specific functions that would otherwise be performed in-house, such as paying claims
• B. Seeks to obtain the best deals from various vendors for equipment, supplies, and services such as telephones, overnight mail, computer hardware and software, and copy machines
• C. Merges with one or more companies to form an entirely new company
• D. Joins with one or more companies, but retains its autonomy and relies on the other companies to perform specific functions

Answer: B

NEW QUESTION 7
The following answer choices describe various approaches that a health plan can take to voice its opinions on legislation. Select the answer choice that best describes a health plan's use of grassroots lobbying.

• A. The Delancey Health Plan is launching a media campaign in an effort to persuade the public that proposed health care legislation will increase the cost of healthcare.
• B. The Stellar Health Plan is using direct mail and telephone calls to encourage people who support a patient rights bill to contact key legislators and voice their support for the bill.
• C. The Bestway Health Plan is encouraging its employees to contribute to a political action committee (PAC) that is funding the political campaign of a pro-health plan candidate.
• D. A representative of the Palmer Health Plan is attending a one-on-one meeting with a legislator to present Palmer's position on pending managed care legislation.

Answer: B

NEW QUESTION 8
The Sawgrass Health Center is an institution that trains healthcare professionals and performs various clinical and other types of healthcare-related research. Because Sawgrass receives government funding, it is required to provide medical care for the poor. Of the following types of health plans, Sawgrass can best be described as:

• A. A medical foundation
• B. An academic medical center (AMC)
• C. A healthcare cooperative
• D. A community health center (CHC)

Answer: B

NEW QUESTION 9
The Nonprofit Institutions Act allows the Neighbor Hospital, a not-for-profit hospital, to purchase at a discount drugs for its 'own use'. Consider whether the following sales of drugs were not for Neighbor's own use and therefore were subject to antitrust enforcement:
Elijah Jamison, a former patient of Neighbor, renewed a prescription that was originally dispensed when he was discharged from Neighbor.
Neighbor filled a prescription for Camille Raynaud, who has no connection to Neighbor other than that her prescribing physician is located in a nearby physician's office building.
Neighbor filled a prescription for Nigel Dixon, who is a friend of a Neighbor medical staff member. With respect to the United States Supreme Court's definition of 'own use,' the drug sales that were not for Neighbor's own use were the sales that Neighbor made to

• A. M
• B. Jamison, M
• C. Raynaud, and M
• D. Dixon
• E. M
• F. Jamison and M
• G. Raynaud only
• H. M
• I. Dixon only
• J. None of these individuals

Answer: A

NEW QUESTION 10
Some health plans qualify as tax-exempt organizations under Sections 501(c)(3) and 501(c)(4) of the Internal Revenue Code. One true statement regarding a health plan that qualifies as a 501(c)(4) social welfare organization, in comparison to a health plan that qualifies as a 501(c)(3) charitable organization, is that a

• A. 501(c)(4) social welfare organization is allowed to distribute profits for the benefit of individuals,whereas a 501(c)(3) charitable organization can use surplus only for the benefit of the organization, the community, or a charity
• B. 501(c)(4) social welfare organization can raise operating funds through the sale of tax-exempt bonds, whereas a 501(c)(3) charitable organization does not have this advantage
• C. 501(c)(4) social welfare organization has less flexibility in determining use of funds for social or political activities than does a 501(c)(3) charitable organization
• D. 501(c)(4) exemption is easier to obtain than a 501(c)(3) exemption, because 501(c)(4) social welfare organizations are allowed to benefit a comparatively smaller group of individuals

Answer: D

NEW QUESTION 11
The Surrey Medical Supply Company was formed as a limited partnership. In this partnership, Victoria Lewin is one of the limited partners and Oscar Gould is a general partner. This information indicates that, with respect to the typical characteristics of limited partnerships,

• A. M
• B. Lewin has more freedom to opt out of the partnership than does M
• C. Gould
• D. M
• E. Lewin has more liability for the debts of Surrey than does M
• F. Gould
• G. both M
• H. Lewin and M
• I. Gould participate in the day-to-day management of Surrey
• J. the partnership will continue upon the death of M
• K. Gould, whereas it will end with the death of M
• L. Lewin

Answer: A

NEW QUESTION 12
Health plans typically divide their costs into medical and administrative expenses. Examples of medical expenses are.

• A. Equipment costs
• B. Salaries and benefits for executives and for all functional areas
• C. Sales and marketing costs
• D. Payments to providers for the delivery of healthcare

Answer: D

NEW QUESTION 13
In 1994, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) revised their 1993 healthcare-specific antitrust guidelines to include analytical principles relating to multiprovider networks. Under the new guidelines, the regulatory agencies will use the rule of reason to analyze joint pricing activities by competitors in physician or multiprovider networks only if

• A. Provider integration under the network is likely to produce significant efficiencies that benefit consumers
• B. The providers in a network share substantial financial risk
• C. The combining of providers into a joint venture enables the providers to offer a new product
• D. All of the above

Answer: A

NEW QUESTION 14
Antitrust laws can affect the formation, merger activities, or acquisition initiatives of a health plan. In the United States, the two federal agencies that have the primary responsibility for enforcing antitrust laws are the

• A. Internal Revenue Service (IRS) and the Department of Justice (DOJ)
• B. Office of Inspector General (OIG) and the Department of Defense (DOD)
• C. Federal Trade Commission (FTC) and the Department of Labor (DOL)
• D. Federal Trade Commission (FTC) and the Department of Justice (DOJ)

Answer: D

NEW QUESTION 15
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.
With respect to the Federal Sentencing Guidelines, actions that SoundCare should take in developing its compliance program include

• A. Creating a system through which employees and other agents can report suspected misconduct without fear of retribution
• B. Holding management accountable for the misconduct of their subordinates
• C. Assigning a high-level member of management to the position of compliance coordinator or administrator
• D. All of the above

Answer: D

NEW QUESTION 16
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.
Every employee benefit plan governed by the Employee Retirement Income Security Act (ERISA) must distribute a summary plan description (SPD) to participants within (90 / 120) days after the date on which the plan is adopted or made effective. Thereafter, if the plan is amended, a new SPD must be distributed every (5 / 10) years.

• A. 90 / 5
• B. 90 / 10
• C. 120 / 5
• D. 120 / 10

Answer: C

NEW QUESTION 17
From the following answer choices, choose the term that best corresponds to this description. The
SureQual Group is a group of practicing physicians and other healthcare professionals paid by the federal government to review services ordered or furnished by other practitioners in the same medical fields for the purpose of determining whether medical services provided were reasonable and necessary, and to monitor the quality of care given to Medicare patients.

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

Answer: D

NEW QUESTION 18
The Westchester Health Plan is using a pricing strategy that involves setting a low price in a highly price-sensitive market to stimulate revenue growth. In following this strategy, Westchester is sacrificing short-term profits for fast growth in selected markets. This information indicates that Westchester is following the pricing strategy known as

• A. Market skimming
• B. Buying market share
• C. Price skimming
• D. Unitary pricing

Answer: B

NEW QUESTION 19
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.
One type of acquisition is called a stock purchase. In a typical stock purchase, a company acquires (51% / 100%) of the voting shares of another company's stock, thereby making the acquired company a subsidiary. The (acquired / acquiring) company holds all of the assets and liabilities of the acquired company.

• A. 51% / acquired
• B. 51% / acquiring
• C. 100% / acquired
• D. 100% / acquiring

Answer: C

NEW QUESTION 20
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