AHIP AHM-520 FAHM Exam Practice Test Instant Access

Question 1

Because a health plan cannot decline coverage for individuals who are eligible for conversion of group health coverage to individual health coverage, the bulk of the health plan's underwriting for conversion policies is accomplished through health plan design.

ATrue

BFalse

Answer : A

Question 2

Three general strategies that health plans use for controlling types of risk are risk avoidance, risk transfer, and risk acceptance. The following statements are about these strategies. Three of these statements are true, and one statement is false. Select the answer choice containing the FALSE statement.

AGenerally, the smaller the likely benefits of accepting a risk, and the lower the costs of avoiding that risk, the greater the likelihood that a health plan will elect to avoid the risk.

BA health plan is seldom able to transfer any of the risk that utilization rates will be higher than expected and that its cost of providing healthcare will exceed the revenues it receives.

CIf a risk is a pure risk from the point of view of a health plan, then the health plan most likely will attempt to avoid the risk.

DA health plan would most likely transfer some or all of its utilization risk if it pays a provider a rate that is based on the number of plan enrollees that choose the provider as their primary care provider (PCP).

Answer : B

Question 3

Advantages to a company that elects to self-fund and to administer all aspects of its healthcare benefit plan include:

AEliminating state premium taxes

BAvoiding state-mandated benefit requirements

CImproving its cash flow position

DAll of the above

Answer : D

Question 4

The Violin Company offers its employees a triple option of health plans: an HMO, an HMO with a point of service (POS) option, and an indemnity plan.

Premiums are lowest for the HMO option and highest for the indemnity plan. Violin employees who anticipate that they will be individual low utilizes of healthcare services are most likely to enroll in the

AHMO and are least likely to enroll in the HMO with the POS option

BHMO and are least likely to enroll in the indemnity plan

CIndemnity plan and are least likely to enroll in the HMO

DIndemnity plan and are least likely to enroll in the HMO with the POS option

Answer : B

Question 5

Costs that can be defined by behavior are most commonly classified as fixed costs, variable costs and semi-variable costs. Examples of fixed costs include:

ARent, insurance expense, and depreciation on computer equipment

BRent, claims processing costs, and selling expenses

CClaims processing costs, telephone expense, and depreciation on computer equipment

DPremium processing, rent, and selling expenses

Answer : A

Question 6

A health plan can use cost accounting in order to

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

ABoth A and B

BA only

CB only

DNeither A nor B

Answer : A

Question 7

The Longview Hospital contracted with the Carlyle Health Plan to provide inpatient services to Carlyle's enrolled members. Carlyle provides Longview with a type of stop-loss coverage that protects, on a claims incurred and paid basis, against losses arising from significantly higher than anticipated utilization rates among Carlyle's covered population. The stop-loss coverage specifies an attachment point of 130% of Longview's projected $2,000,000 costs of treating Carlyle plan members and requires Longview to pay 15% of any costs above the attachment point. In a given plan year, Longview incurred covered costs totaling $3,000,000.

For the year in which Longview's incurred covered costs were $3,000,000, the amount for which Longview will be responsible is:

A$2,000,000

B$2,600,000

C$2,660,000

D$3,900,000

Answer : C

AHIP Health Plan Finance and Risk Management AHM-520 FAHM Exam Practice Test