AHM-520 AHIP Exam Questions and Free Practice Test

Question 37

- (Topic 1)
A health plan that capitates a provider group typically provides or offers to provide stop-loss coverage to that provider group.

A. True

B. False

Correct Answer:A

Question 38

- (Topic 2)
The HMO Model Act sets certain requirements that an entity that wishes to operate as an HMO must meet. These requirements include:

A. Having an initial net worth of at least $5 million

B. Maintaining a net worth equal to at least 5% of premium revenues for the first $150 million in premium revenue

C. Using a prospective method to estimate future risk

D. Obtaining a certificate of authority (COA) before beginning operations

Correct Answer:D

Question 39

- (Topic 1)
Experience rating and manual rating are two rating methods that the Cheshire health plan uses to determine its premium rates. One difference between these two methods is that, under experience rating, Cheshire

A. Uses a purchaser's actual experience to estimate the group's expected experience, whereas, under manual rating, Cheshire uses its own average experience—and sometimes the experience of other plans—to estimate the group's expected experience

B. can establish rates for groups that have no previous plan experience, whereas, under manual rating, Cheshire cannot establish rates for groups with no previous plan experience

C. charges each group in the same class the same premium whereas, under manual rating, Cheshire charges lower premiums to groups that have experienced lower utilization rates

D. can use group demographics to help determine the rate for a block of business, whereas, under manual rating, Cheshire cannot use group demographics when determining the rate for a block of business

Correct Answer:A

Question 40

- (Topic 2)
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

Correct Answer:A

Question 41

- (Topic 1)
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

Correct Answer:D

Question 42

- (Topic 2)
The following statements are about a health plan's evaluation of its responsibility centers. Select the answer choice containing the correct statement.

A. When analyzing budget variances, a health plan's management should pay attention to unfavorable variances only.

B. A health plan can reduce the problem of unattainable goals by involving responsibility managers in the preparation of their centers' budgets.

C. One reason that a health plan would use cost-based transfer prices to evaluate the performance of its profit centers and investment centers is because, under this method of setting transfer prices, the selling center has maximum incentive to operate effectively and control costs.

D. In responsibility accounting, all employees who have any influence over a health plan's department are held equally accountable for the operations and financial outcomes of that department.

Correct Answer:B

START AHM-520 EXAM