Free AHM-520 Exam Braindumps

- (Topic 1)
The following statements are about risk management in health plans. Select the answer choice containing the correct response.

1. A. Risk management is especially important to health plans because the Employee Retirement Income Security Act of 1974 (ERISA) allows plan members to recover punitive damages from healthcare plans.
2. B. With regard to the relative risk for health plan structures based upon the degree of influence and relationships that health plans maintain with their providers, preferred provider organizations (PPOs) typically have a higher risk than do group HMOs and staff HMOs.
3. C. Although there are clear risks associated with the provision of healthcare services and coverage decisions surrounding that care, the bulk of risk in health plans is associated with a health plan's benefit administration and contracting activities.
4. D. A health plan generally structures its risk management process around loss reduction techniques and loss transfer techniques.

Correct Answer: D

- (Topic 1)
The Poplar Company and a Blue Cross/Blue Shield organization have contracted to provide a typical fully funded health plan for Poplar's employees. One true statement about this health plan for Poplar's employees is that

1. A. Poplar bears the entire financial risk if, during a given period, the dollar amount of services rendered to Poplar plan members exceeds the dollar amount of premiums collected for this health plan
2. B. Poplar and the Blue Cross/Blue Shield organization share the financial risk of paying for claims under Poplar's health plan
3. C. The Blue Cross/Blue Shield organization, upon acceptance of a premium, becomes the group plan sponsor for Poplar's health plan
4. D. The Blue Cross/Blue Shield organization, upon acceptance of a premium, bears the entire financial risk of paying for the administrative expenses associated with health plan operations

Correct Answer: D

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

Correct Answer: A

- (Topic 2)
One typical characteristic of zero-based budgeting (ZBB) is that this budgeting approach

1. A. Treats each activity as though it is a new project under consideration
2. B. Applies only to income budgets
3. C. Is the least time-consuming of all of the budgeting approaches
4. D. Requires the input of top-level employees only

Correct Answer: A

- (Topic 1)
The Newfeld Hospital has contracted with the Azalea Health Plan to provide inpatient services to Azalea's enrolled members. The contract calls for Azalea to provide specific stop-loss coverage to Newfeld once Newfeld's treatment costs reach $20,000 per case and for Newfeld to pay 20% of the next $50,000 of expenses for this case. After Newfeld's treatment costs on a case reach $70,000, Azalea reimburses the hospital for all subsequent treatment costs.
One true statement about this specific stop-loss coverage is that

1. A. The carrier is Newfeld
2. B. The attachment point is $20,000
3. C. The shared-risk corridor is between $0 and $70,000
4. D. This coverage can also be activated when the total covered medical expensesgenerated by the hospitalizations of Azalea plan members reach a specified level

Correct Answer: B