AHM-520 AHIP Exam Questions and Free Practice Test

Question 43

- (Topic 2)
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

Correct Answer:A

Question 44

- (Topic 2)
In order to analyze costs for internal management purposes, the Banner health plan uses functional cost analysis. One characteristic of this method of cost analysis is that it

A. Enables Banner's top management to analyze costs as they apply to workflow rather than to organizational structures

B. Assumes that activities, not products, generate costs

C. Cannot be used when Banner makes pricing and staffing decisions

D. Identifies units of activity, calculates the costs of performing each unit of activity, and then assigns the cost of each unit of activity to Banner's products or lines of business

Correct Answer:A

Question 45

- (Topic 2)
Correct statements about the financial risks associated with benefits that health plans provide to the Medicare and Medicaid markets include:

A. That, because the government sets the payments received by health plans, the health plans cannot easily obtain an increase in those payments even in the face of rising costs

B. That regulators determine which services must be provided under Medicare and Medicaid and which persons are eligible to enroll in a plan

C. That there is typically more provider reluctance to accept risk in connection withproviding services to the Medicaid population than with providing services to the Medicare population

D. All of the above

Correct Answer:D

Question 46

- (Topic 2)
The medical loss ratio (MLR) for the Peacock health plan is 80%. Peacock's expense ratio is 16%.
One characteristic of Peacock's MLR is that it

A. Includes claims that have been paid but excludes claims that have not yet been reported

B. Cannot adjust for growth in the health plan's business

C. Is the percentage of Peacock's end-of-period surplus to its earned premiums

D. Measures Peacock's overall claims levels

Correct Answer:D

Question 47

- (Topic 1)
As part of the first step in its strategic planning process, the Trout health plan developed the following statements:
✑ Statement A—Trout will deliver quality healthcare to our customers at a reasonable cost.
✑ Statement B—Within five years, Trout will be recognized as the industry leader in
all of our markets.
Statement A can best be described as a

A. Vision statement, and Statement B also can best be described as a vision statement

B. Vision statement, whereas Statement B can best be described as a mission statement

C. Mission statement, whereas Statement B can best be described as a vision statement

D. Mission statement, and Statement B also can best be described as a mission statement

Correct Answer:C

Question 48

- (Topic 1)
The Caribou health plan is a for-profit organization. The financial statements that Caribou prepares include balance sheets, income statements, and cash flow statements. To prepare its cash flow statement, Caribou begins with the net income figure as reported on its income statement and then reconciles this amount to operating cash flows through a series of adjustments. Changes in Caribou's cash flow occur as a result of the health plan's operating activities, investing activities, and financing activities.
Caribou is engaged in an operating activity when it

A. Purchases or sells assets of the health plan

B. Disposes of a subsidiary

C. Repays funds loaned by its creditors

D. Pays expenses associated with the healthcare services provided to its members

Correct Answer:D

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