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Pass the AHIP Certification AHM-520 Questions and answers with ExamsMirror

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Viewing questions 31-40 out of questions
Questions # 31:

The NAIC has developed a risk-based capital (RBC) formula for all health plans that accept risk. One true statement about the RBC formula for health plans is that it

Options:

A.

is a set of calculations, based on information in a health plan's annual financial report, that yields a target capital requirement for the organization

B.

fails to take into account a health plan's underwriting risk, which is the risk that the premiums the health plan receives will be insufficient to pay for the healthcare services it provides to its plan members

C.

applies to all health plans in the United States

D.

fails to assess the specific level of risk faced by each health plan

Questions # 32:

A product is often described as having a thin margin or a wide margin. With regard to the factors that help determine the size of the margin of a health plan's product, it can correctly be stated that the

Options:

A.

greater the risk a health plan assumes in a health plan, the thinner the product margin should be

B.

more that competition acts to force prices down, the wider the product margins tend to become

C.

greater the demand for the product, the thinner the margin for this product tends to become

D.

longer the premium rates are guaranteed to a group, the wider the health plan's margin should be

Questions # 33:

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

Options:

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

Questions # 34:

A health plan most likely would use benchmarking in order to

Options:

A.

Measure its performance and practices against those of other companies to help identify those practices that will lead to superior performance in a variety of financial and non-financial areas

B.

Calculate the percentage changes in its financial statement items over several consecutive accounting periods

C.

Determine both the direction and velocity of trends in its financial statements

D.

Display only percentage relationships in its financial statements

Questions # 35:

The Fairway health plan is a for-profit health plan that issues stock. The following data was taken from Fairway's financial statements:

Current assets.....$5,000,000

Total assets.....6,000,000

Current liabilities.....2,500,000

Total liabilities.....3,600,000

Stockholders' equity.....2,400,000

Fairway's total revenues for the previous financial period were $7,200,000, and its net income for that period was $180,000.

Assume that the healthcare industry average for the debt-to-equity ratio is 0.90. The following statement(s) can correctly be made about Fairway's debt to equity ratio:

Options:

A.

Fairway's debt-to-equity ratio is 1.50

B.

Fairway relies less than most other healthcare organizations on borrowed funds to cover future and current benefit payments, to pay for ongoing business operations, and to finance growth

C.

Both A and B

D.

A only

E.

B only

F.

Neither A nor B

Questions # 36:

One way that the Medicare and Medicaid programs differ is that under Medicare, a smaller proportion of provider reimbursement goes to the primary care providers and a greater proportion of the reimbursement goes to hospitals and specialists.

Options:

A.

True

B.

False

Questions # 37:

A health plan can use cost accounting in order to

Options:

A.

Determine premium rates for its products

B.

Match the costs incurred during a given accounting period to the income earned in, or attributed to, that same period

C.

Both A and B

D.

A only

E.

B only

F.

Neither A nor B

Questions # 38:

An investor deposited $1,000 in an interest-bearing account today. That sum will accumulate to $1,200 two years from now. One true statement about this transaction is that:

Options:

A.

The process by which the original $1,000 deposit grows to $1,200 is known as compounding

B.

$1,200 is the present value of the $1,000 deposit

C.

The $200 increase in the deposit’s value is its incremental cash flow

D.

The $200 difference between the original deposit and the accumulated value of the deposit is known as the deposit’s discount

Questions # 39:

Costs that can be defined by behavior are most commonly classified as fixed costs, variable costs, and semi-variable costs. From the following answer choices, select the response that correctly indicates a fixed cost and a variable cost for a health plan.

Options:

A.

Fixed Cost = depreciation on computer equipment

Variable Cost = selling expenses

B.

Fixed Cost = premium processing expenses

Variable Cost = rent on a regional office

C.

Fixed Cost = the cost for building maintenance

Variable Cost = the cost for electricity

D.

Fixed Cost = the cost for electricity

Variable Cost = fire insurance on the home office facility

Questions # 40:

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:

Options:

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

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Viewing questions 31-40 out of questions
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