AHM-520

AHM-520 practice questions, page 4 of 9, with answer review and explanations.

Question 16

Over time, health plans and their underwriters have gathered increasingly reliable information about the morbidity experience of small groups. Generally, in comparison to large groups, small groups tend to:

  1. Have more frequent and larger claims fluctuations
  2. Generate lower administrative expenses as a percentage of the total premium amount the group pays
  3. More closely follow actuarial predictions regarding morbidity rates
  4. All of the above

Question 17

In order to calculate a simple monthly capitation payment, the Argyle Health Plan used the following information: The average number of office visits each member makes in a year is two The FFS rate per office visit is $55 The member copayment is $5 per office visit The reimbursement period is one month Given this information, Argyle would correctly calculate that the per member per month (PMPM) capitation rate should be:

  1. $4.17
  2. $8.33
  3. $9.17
  4. $10.00

Question 18

The Landau health plan will switch from using top-down budgeting to using bottom-up budgeting. One potential advantage to Landau of making this switch is that, compared to top-down budgeting, bottom-up budgeting is more likely to:

  1. Require little time or labor to complete
  2. Enable Landau to incorporate key changes in regulatory requirements on a timely basis
  3. Reflect top management's intentions for Landau
  4. Reflect the realities of day-to-day operations

Question 19

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

  1. 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
  2. That regulators determine which services must be provided under Medicare and Medicaid and which persons are eligible to enroll in a plan
  3. That there is typically more provider reluctance to accept risk in connection with providing services to the Medicaid population than with providing services to the Medicare population
  4. All of the above

Question 20

Ways in which a company can increase its return on investment (ROI) include: 1. Reducing expenses to increase operating income 2. Increasing controllable investment

  1. Both 1 and 2
  2. 1 only
  3. 2 only
  4. Neither 1 nor 2