AHM-520 Health Plan Finance and Risk Management Practice Questions

If the operational budget prepared by the Satilla health plan is typical of most operational budgets, then: A.Its purpose is to track Satilla's operations and short-term profitabilityB.The key information source for this operational budget is Satilla's external environmentC.The time frame for this operational budget is three to five yearsD.Its focus is on the threats that Satilla faces from its external environment

The following statements are about the option for health plan funding known as a self-funded plan. Select the answer choice containing the correct response: A.In a self-funded plan, an employer is relieved of all risk associated with paying for the healthcare costs of its employees.B.Self-funded plans are subject to the same state laws and regulations that apply to health insurance policies.C.Employers electing to self-fund a health plan are required to pay claims from a separate trust established for that purpose.D.An employer electing to self-fund a health plan has the option of purchasing stop-loss insurance to transfer part of the financial risk to an insurer.

When pricing its product, the Panda Health Plan assumes a 4% interest rate on its investments. Panda also assumes a crediting interest rate of 4%. The actual interest rate earned by Panda on the assets supporting its product is 6%. The following statements can correctly be made about the investment margin and interest margin for Panda's products. A.Panda most likely built the crediting interest rate of 4% into the investment margin of its product.B.Panda's investment margin is the difference between its actual benefit costs and the benefit costs that it assumes in its pricing.C.The interest margin for this product is 2%.D.All of these statements are correct.

The Norton Health Plan used blended rating to develop a premium rate for the Roswell Company, a large employer group. Norton assigned Roswell a credibility factor of 0.7 (or 70%). Norton calculated Roswell’s manual rate to be $200 and its experience claims cost as $180. Norton’s retention charge is $3.This information indicates that Roswell’s blended rate is: A.$186B.$189C.$194D.$197

Doctors’ Care is an individual practice association (IPA) under contract to the Jasper Health Plan to provide primary and secondary care to Jasper’s members. Jasper’s capitation payments compensate Doctors’ Care for all physician services and associated diagnostic tests and laboratory work. The physicians at Doctors’ Care, as a group, determine how individual physicians in the group will be remunerated.The type of capitation used by Jasper to compensate Doctors’ Care is known as: A.PCP capitationB.Partial capitationC.Full professional capitationD.Specialty capitation