AHM-510 Online Practice Questions and Answers

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. Ms. Lewin has more freedom to opt out of the partnership than does Mr. Gould

B. Ms. Lewin has more liability for the debts of Surrey than does Mr. Gould

C. both Ms. Lewin and Mr. Gould participate in the day-to-day management of Surrey

D. the partnership will continue upon the death of Mr. Gould, whereas it will end with the death of Ms. Lewin

Arthur Dace, a plan member of the Bloom Health Plan, tried repeatedly over an extended period to schedule an appointment with Dr. Pyle, his primary care physician (PCP). Mr. Dace informally surveyed other Bloom plan members and found that many people were experiencing similar problems getting an appointment with this particular provider. Mr. Dace threatened to take legal action against Bloom, alleging that the health plan had deliberately allowed a large number of patients to select Dr. Pyle as their PCP, thus making it difficult for patients to make appointments with Dr. Pyle. Bloom recommended, and Mr. Dace agreed to use, an alternative dispute resolution (ADR) method that is quicker and less expensive than litigation. Under this ADR method, both Bloom and Mr. Dace presented their evidence to a panel of medical and legal experts, who issued a decision that Bloom's utilization management practices in this case did not constitute a form of abuse. The panel's decision is legally binding on both parties.

This information indicates that Bloom resolved its dispute with Mr. Dace by using an ADR method known as:

A. Corporate risk management

B. An ombudsman program

C. An ethics committee

D. Arbitration

The Tidewater Life and Health Insurance Company is owned by its policy owners, who are entitled to certain rights as owners of the company, and it issues both participating and nonparticipating insurance policies. Tidewater is considering converting to the type of company that is owned by individuals who purchase shares of the company's stock. Tidewater is incorporated under the laws of Illinois, but it conducts business in the Canadian provinces of Ontario and Manitoba.

Tidewater established the Diversified Corporation, which then acquired various subsidiary firms that produce unrelated products and services. Tidewater remains an independent corporation and continues to own Diversified and the subsidiaries. In order to create and maintain a common vision and goals among the subsidiaries, the management of Diversified makes decisions about strategic planning and budgeting for each of the businesses.

In creating Diversified, Tidewater formed the type of company known as

A. A mutual holding company

B. A spin-off company

C. An upstream holding company

D. A downstream holding company

The following statements are about market conduct examinations of health plans. Select the answer choice that contains the correct statement.

A. Multistate examinations are not appropriate for financial examinations, because regulatory requirements concerning a health plan's financial condition tend to vary from state to state.

B. Market conduct examinations of a health plan's advertising and sales materials include comparing the advertising materials to the policies they advertise.

C. Once an examination report is provided to the state insurance department, a health plan is not given an opportunity to present a formal objection to the report.

D. In imposing sanctions on health plans, state insurance departments are required to follow federal sentencing guidelines.

Greenpath Health Services, Inc., an HMO, recently terminated some providers from its network in response to the changing enrollment and geographic needs of the plan. A provision in Greenpath's contracts with its healthcare providers states that Greenpath can terminate the contract at any time, without providing any reason for the termination, by giving the other party a specified period of notice.

The state in which Greenpath operates has an HMO statute that is patterned on the NAIC HMO Model Act, which requires Greenpath to notify enrollees of any material change in its provider network. As required by the HMO Model Act, the state insurance department is conducting an examination of Greenpath's operations. The scope of the on-site examination covers all aspects of Greenpath's market conduct operations, including its compliance with regulatory requirements.

With respect to the type of change that constitutes a material change under the HMO Model Act's disclosure requirements, the termination of one healthcare provider from Greenpath's provider network

A. Always qualifies as a material change in the plan, and Greenpath must report the change to all plan enrollees

B. Always qualifies as a material change in the plan, and Greenpath must report the change to only those plan enrollees who have received care from the terminated provider

C. Qualifies as a material change in the plan only if the provider is a primary care provider, and in such a case Greenpath must report the change to all plan enrollees

D. Qualifies as a material change in the plan only if the provider is a primary care provider, and in such a case Greenpath must report the change to only those plan enrollees who receive primary care from the terminated provider

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)

The following statements describe various state benefit mandates. Select the answer choice that describes a state law pertaining to off-label uses for drugs.

A. State A mandates that health plans provide benefits for experimental drugs for the treatment of terminal diseases such as AIDS and cancer.

B. State B mandates that health plans have a procedure in place to allow a patient to have a non-formulary drug covered under certain conditions.

C. State C mandates that, in dispensing generic drugs, pharmacies must label drug containers with the name of the substituted generic medication.

D. State D mandates that health plans provide benefits for the treatment of one form of cancer with specific drugs that had originally been approved by the Food and Drug Administration (FDA) to treat other forms of cancer.

The Tidewater Life and Health Insurance Company is owned by its policy owners, who are entitled to certain rights as owners of the company, and it issues both participating and nonparticipating insurance policies. Tidewater is considering converting to the type of company that is owned by individuals who purchase shares of the company's stock. Tidewater is incorporated under the laws of Illinois, but it conducts business in the Canadian provinces of Ontario and Manitoba.

With regard to the state in which Tidewater is domiciled, it is correct to say that, from the perspective of both Ontario and Manitoba, Tidewater is considered to be the type of corporation known as:

A. A foreign corporation

B. An alien corporation

C. A sister corporation

D. A domestic corporation

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)

Arthur Dace, a plan member of the Bloom health plan, tried repeatedly over an extended period to schedule an appointment with Dr. Pyle, his primary care physician (PCP). Mr. Dace informally surveyed other Bloom plan members and found that many people were experiencing similar problems getting an appointment with this particular provider. Mr. Dace threatened to take legal action against Bloom, alleging that the health plan had deliberately allowed a large number of patients to select Dr. Pyle as their PCP, thus making it difficult for patients to make appointments with Dr. Pyle.

Bloom recommended, and Mr. Dace agreed to use, an alternative dispute resolution (ADR) method that is quicker and less expensive than litigation. Under this ADR method, both Bloom and Mr. Dace presented their evidence to a panel of medical and legal experts, who issued a decision that Bloom's utilization management practices in this case did not constitute a form of abuse. The panel's decision is legally binding on both parties.

Different types of compensation arrangements in managed care plans, from fee-for-service (FFS) arrangements to capitation arrangements, lead to different types of fraud and abuse. From the answer choices below, select the response that identifies the form of abuse in which Bloom is allegedly engaging, according to Mr. Dace's complaint, and whether this form of abuse is more likely to occur in FFS compensation arrangements or in capitation arrangements.

A. Type of abuse underutilization Type of compensation arrangement FFS arrangement

B. Type of abuse underutilization Type of compensation arrangement capitation arrangement

C. Type of abuse overutilization Type of compensation arrangement FFS arrangement

D. Type of abuse overutilization Type of compensation arrangement capitation arrangement

Brighton Health Systems, Inc., a health plan, wants to modify its advertising and marketing materials to avoid liability risk under the principle of ostensible agency. One step that Brighton can take to reduce the likelihood of being liable for provider negligence under the theory of ostensible agency is to

A. Guarantee the quality of medical care provided to Brighton members

B. Use advertising materials which state that Brighton itself provides healthcare

C. Add disclaimers to advertising materials indicating that only physicians and not Brighton make medical decisions

D. Use advertising materials to characterize Brighton's role as providing physicians, hospitals, and other healthcare professionals rather than arranging for healthcare.

A federal law that significantly affects health plans is the Health Insurance Portability and Accountability Act of 1996 (HIPAA). In order to comply with HIPAA provisions, issuers offering group health coverage generally must.

A. Renew group health policies in both small and large group markets, regardless of the health status of any group member

B. Provide a plan member with a certificate of creditable coverage at the time the member enrolls in the group plan

C. Both A and B

D. A only

E. B only

F. Neither A nor B

Regulators of health plans have set standards in a number of areas of plan operations. Requirements with which health plans must comply typically include

A. providing enrollees and prospective enrollees with detailed information about various aspects of health plan policies and operations

B. maintaining internal grievance and appeals processes to resolve enrollee complaints against the organization

C. maintaining quality assurance programs that reflect the plan's activities in monitoring quality

D. all of the above

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

While traditional workers' compensation laws have restricted the use of managed care techniques, many states now allow managed workers' compensation. One common characteristic of managed workers' compensation plans is that they

A. Discourage injured employees from returning to work until they are able to assume all the duties of their jobs

B. Use low copayments to encourage employees to choose preferred providers

C. Cover an employee's medical costs, but they do not provide coverage for lost wages

D. Rely on total disability management to control indemnity benefits