The Regenerate Guide To AHM-520 Actual Exam

NEW QUESTION 1

In the following paragraph, a sentence contains two pairs of words enclosed in parentheses. Determine which word in each pair correctly completes the sentence. Then select the answer choice containing the two words that you have selected.
Budgeting approaches can be classified as static or flexible budgets, or as rolling or period budgets. A health plan most likely would use a (static / flexible) budget when a budget's objective is to reduce or limit expenses, and the health plan most likely would use a (rolling / period) budget if it would like to continually maintain projections for a certain time period into the future.

• A. static / rolling
• B. static / period
• C. flexible / rolling
• D. flexible / period

Answer: A

NEW QUESTION 2

Reconciliation is the process by which a health plan assesses providers' performance relative to contractual terms and reimbursement.
With regard to this process, it can correctly be stated that

• A. Areconciliation typically includes payment to the providers of any withholds or bonuses due to them
• B. Ahealth plan typically should conduct a reconciliation immediately after the evaluation period has ended
• C. Most agreements between health plans and providers require reconciliations to be performed quarterly
• D. Ahealth plan typically should not conduct reconciliation for a provider until the plan has received all claims or other documentation of services that the physician provided during the evaluation period

Answer: A

NEW QUESTION 3

The methods of alternative funding for health coverage can be divided into the following general categories:
✑ Category A—Those methods that primarily modify traditional fully insured group insurance contracts
✑ Category B—Those methods that have either partial or total self funding
Typically, small employers are able to use some of the alternative funding methods in

• A. Both Category A and Category B
• B. Category A only
• C. Category B only
• D. Neither Category A nor Category B

Answer: C

NEW QUESTION 4

Under the alternative funding method used by the Flair Company, Flair assumes financial responsibility for paying claims up to a specified level and deposits the funds necessary to pay these claims into a bank account that belongs to Flair. However, an insurer, which acts as an agent of Flair, makes the actual payment of claims from this account. When claims exceed the specified level, the insurer pays the balance from its own funds. No state premium tax is levied on the amounts that Flair deposits into this bank account.
From the following answer choices, choose the name of the alternative funding method described.

• A. Retrospective-rating arrangement
• B. Premium-delay arrangement
• C. Reserve-reduction arrangement
• D. Minimum-premium plan

Answer: D

NEW QUESTION 5

The Column health plan is in the process of developing a strategic plan.
The following statements are about this strategic plan. Three of the statements are true, and one statement is false. Select the answer choice containing the FALSE statement.

• A. Human resources most likely will be a critical component of Column's strategic plan because, in health plan markets, the size and the quality of a health plan's provider network is often more important to customers than are the details of a product's benefit design.
• B. Column's strategic plan should only address how the health plan will differentiate its products, rather than where and how it will sell these products.
• C. Column most likely will need to develop contingency plans to address the need to make adjustments to its original strategic plan.
• D. Column's information technology (IT) strategy most likely will be a critical element in successfully implementing the health plan's strategic plan.

Answer: B

NEW QUESTION 6

Health plans with risk-based Medicare contracts are required to calculate and submit to CMS a Medicare adjusted community rate (Medicare ACR). Medicare ACR can be defined as the:

• A. Estimated cost of providing services to a beneficiary under Medicare FFS, adjusted for factors such as age and gender
• B. Health plan’s estimate of the premium it would charge Medicare enrollees in the absence of Medicare payments to the health plan
• C. Average amount the health plan expects to receive from CMS per beneficiary covered
• D. Health plan’s actual costs of providing benefits to Medicare enrollees in a given year

Answer: B

NEW QUESTION 7

One typical characteristic of zero-based budgeting (ZBB) is that this budgeting approach

• A. Treats each activity as though it is a new project under consideration
• B. Applies only to income budgets
• C. Is the least time-consuming of all of the budgeting approaches
• D. Requires the input of top-level employees only

Answer: A

NEW QUESTION 8

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.
According to regulations, Fiesta's premium rates are reasonable if they

• A. vary only on the factors that affect Fiesta's costs
• B. are at a level that balances Fiesta's need to generate a profit against its need to obtain or retain a specified share of the market in which it conducts business
• C. are high enough to ensure that Fiesta has enough money on hand to pay operating expenses as they come due
• D. do not exceed what Fiesta needs to cover its costs and provide the plan with a fair profit

Answer: D

NEW QUESTION 9

Federal law addresses the relationship between Medicare- or Medicaidcontracting health plans and providers who are at "substantial financial risk."
Under federal law, Medicare- or Medicaid-contracting health plans

• 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

Answer: C

NEW QUESTION 10

The Jasmine Company, which self funds the health plan for its 200 employees, has established a 501(c)(9) trust as a means of addressing possible claims fluctuations under the health plan. Thisplan is not a part of a collective bargaining process. A potential disadvantage to Jasmine of using a 501(c)(9) trust is that

• A. The cost of maintaining the trust may be prohibitive to Jasmine
• B. The trust must always maintain enough assets to pay the health plan's claims that have been incurred but not yet paid
• C. Jasmine is prohibited from earning any return on the trust assets
• D. The contributions to this trust are not deductible for federal income tax purposes

Answer: A

NEW QUESTION 11

A health plan can use segment margins to evaluate the profitability of its profit centers. One characteristic of a segment margin is that this margin

• A. Is the portion of the contribution margin that remains after a segment has covered its direct fixed costs
• B. Incorporates only the costs attributable to a segment, but it does not incorporate revenues
• C. Considers only a segment's costs that fluctuate in direct proportion to changes in thesegment's level of operating activity
• D. Evaluates the profit center's effective use of assets employed to earn a profit

Answer: A

NEW QUESTION 12

The provider contract that Dr. Zachery Cogan, an internist, has with the Neptune Health Plan calls for Neptune to reimburse him under a typical PCP capitation arrangement. Dr. Cogan serves as the PCP for Evelyn Pfeiffer, a Neptune plan member. After hospitalizing Ms. Pfeiffer and ordering several expensive diagnostic tests to determine her condition, Dr. Cogan referred her to a specialist for further treatment. In this situation, the compensation that Dr. Cogan receives under the PCP capitation arrangement most likely includes Neptune's payment for

• A. All of the diagnostic tests that he ordered on M
• B. Pfeiffer
• C. His visits to M
• D. Pfeiffer while she was hospitalized
• E. The cost of the services that the specialist performed for M
• F. Pfeiffer
• G. All of the above

Answer: B

NEW QUESTION 13

Dr. Jacob Winburne is compensated by the Honor Health Plan under an arrangement in which Honor establishes at the beginning of a financial period a fund from which claims approved for payment are paid. At the end of the given period, any funds remaining are paid out to providers. This information indicates that the arrangement between Dr. Winburne and Honor includes a provider incentive known as a:

• A. Risk pool, and any deficit in the fund at the end of the period would be the sole responsibility of Honor
• B. Risk pool, and any deficit in the fund at the end of the period would be paid by both D
• C. Winburne and Honor according to percentages agreed upon at the beginning of the contract period
• D. Withhold, and any deficit in the fund at the end of the period would be the sole responsibility of Honor
• E. Withhold, and any deficit in the fund at the end of the period would be paid by both D
• F. Winburne and Honor according to percentages agreed upon at the beginning of the contract period

Answer: A

NEW QUESTION 14

A health plan's costs can be classified as committed costs or discretionary costs. An example of a discretionary cost for a health plan is the cost of its

• A. Facilities
• B. Executive salaries
• C. Employee training
• D. Equipment

Answer: A

NEW QUESTION 15

The following statements are about the Health Insurance Portability and Accountability Act (HIPAA) as it relates to the small group market. Three of these statements are true and one statement is false. Select the answer choice containing the FALSE statement:

• A. A health plan that participates in the small group market is required to issue a contract to any employer that requests healthcare benefits, as long as the employer meets the statutory definition of a small group.
• B. A small group must consist of more than 10 employees in order to be underwritten on a group, rather than an individual, basis.
• C. A health plan is prohibited from canceling a small group’s healthcare coverage because of poor claims experience.
• D. A health plan that participates in the small group market is limited in placing restrictions such as waiting periods and pre-existing conditions exclusions to individuals in high risk categories.

Answer: B

NEW QUESTION 16
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