Question 1

The following statements describe two types of HMOs: The Elm HMO requires its members to select a PCP but allows the members to go to any other provider on its panel without a referral from the PCP. The Treble HMO does not require its members to select a PCP. Treble allows its members to go to any doctor, healthcare professional, or facility that is on its panel without a referral from a primary care doctor. However, care outside of Treble's network is not reimbursed unless the provider obtains advance approval from the HMO. Both HMOs use delegation to transfer certain functions to other organizations. Following the guidelines established by the NCQA, Elm delegated its credentialing activities to the Newnan Group, and the agreement between Elm and Newnan lists the responsibilities of both parties under the agreement. Treble delegated utilization management (UM) to an IPA. The IPA then transferred the authority for case management to the Quest Group, an organization that specializes in case management. Both HMOs also offer pharmacy benefits. Elm calculates its drug costs according to a pricing system that requires establishing a purchasing profile for each pharmacy and basing reimbursement on the profile. Treble and the Manor Pharmaceutical Group have an arrangement that requires the use of a typical maximum allowable cost (MAC) pricing system to calculate generic drug costs under Treble's pharmacy program. The following statements describe generic drugs prescribed for Treble plan members who are covered by Treble's pharmacy benefits: The MAC list for Drug A specifies a cost of 12 cents per tablet, but Manor pays 14 cents per tablet for this drug. The MAC list for Drug B specifies a cost of 7 cents per tablet, but Manor pays 5 cents per tablet for this drug. To calculate its drug costs, Elm uses a pricing system known as:
A) Estimated acquisition cost (EAC)
B) Package rate cost (PRC)
C) Actual acquisition cost (AAC)
D) Wholesale acquisition cost (WAC)

Accepted Answer

The answer of The following statements describe two types of...

Question 2

One true statement about the Medicaid program in the United States is that:
A) The federal financial participation (FFP) in a state's Medicaid program ranges from 20% to 40% of the state's total Medicaid costs
B) Medicaid regulations mandate specific minimum benefits, under the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program, for all Medicaid recipients younger than age 30
C) The individual states have responsibility for administering the Medicaid program
D) Non-disabled adults and children in low-income families account for the majority of direct Medicaid spending

Accepted Answer

The individual states have responsibility for administering the Medicaid program. The federal government sets some guidelines and provides funding (FFP) to the states, but the states have the flexibility to design and operate their own Medicaid programs within certain federal requirements. Option A is incorrect because FFP levels can vary based on a state's wealth and other factors. Option B is incorrect because EPSDT requires screenings and preventative services for all children under age 21, not just those under 30. Option D is incorrect because disabled individuals account for a significant portion of Medicaid spending.

Question 3

The Bruin Health Plan is a Social Health Maintenance Organization (SHMO). As an SHMO, Bruin:
A) Must provide Medicare participants with standard HMO benefits, as well as with limited long- term care benefits
B) Does not need as great a variety of provider types or as complex a reimbursement method as does a traditional HMO
C) Receives a payment that is based on reasonable costs and reasonable charges
D) Most likely provides fewer supportive services than does a traditional HMO, because one of Bruin's goals is to minimize the use of community-based care

Accepted Answer

SHMOs are required to provide standard HMO benefits along with limited long-term care benefits to Medicare participants.

Question 4

Under the compensation arrangement that the Falcon Health Plan has with some of its providers, Falcon holds back 10% of the negotiated payments to these providers in order to offset or pay for any claims that exceed the budgeted costs for referral or hospital services. If the providers keep costs within the budgeted amount, Falcon distributes to them the entire amount of money held back. This way of motivating providers to control costs while providing high-quality, appropriate care is known as a:
A) Risk pool arrangement
B) Withhold arrangement
C) Cost-shifting arrangement
D) Bonus pool arrangement

Accepted Answer

The arrangement described in the question is known as a withhold arrangement. This is a type of financial incentive where a fixed percentage of the negotiated payment is held back by the payer (in this case, Falcon Health Plan) and then released to providers if they keep costs within a certain budgeted amount. It is designed to motivate providers to control costs while maintaining the quality of care provided to patients.

Question 5

The employees of the Trilogy Company are covered by a typical workers' compensation program. Under this coverage, Trilogy employees are bound by the exclusive remedy doctrine, which most likely:
A) Allows Trilogy to deny benefits for an employee's on-the-job injury or illness, but only if Trilogy is not at fault for the injury or illness.
B) Allows Trilogy to place limits on the amount of coverage payable for a given claim under the workers' compensation program.
C) Requires the employees to accept workers' compensation as their only compensation in cases of work-related injury or illness.
D) Provides the employees with 24-hour coverage.

Accepted Answer

The exclusive remedy doctrine means that employees cannot sue their employer for damages beyond the workers' compensation benefits in cases of work-related injury or illness. Therefore, employees are required to accept workers' compensation as their only form of compensation for such cases. Option A is incorrect as denying benefits would be a violation of the workers' compensation program. Option B is incorrect as the workers' compensation program usually has set limits for coverage. Option D is incorrect as workers' compensation typically only covers on-the-job injuries or illnesses, not 24-hour coverage.

Question 6

One characteristic of the workers' compensation program is that:
A) workers' compensation coverage is available to all employees, regardless of their eligibility for health insurance coverage
B) indemnity benefits currently account for less than 10% of all workers' compensation benefits
C) workers' compensation programs in most states require eligible employees to obtain medical treatment only from members of a provider network
D) workers' compensation programs include deductibles and coinsurance requirements

Accepted Answer

Workers' compensation coverage is generally available to all employees, regardless of their eligibility for health insurance coverage, as it is designed to provide benefits for work-related injuries or illnesses.

Question 7

In health plan pharmacy networks, service costs consist of two components: costs for services associated with dispensing prescription drugs and costs for cognitive services. Cognitive services typically include:
A) making generic substitutions of drugs
B) counseling patients about prescriptions
C) providing patient monitoring
D) switching prescription drugs to preferred drugs

Accepted Answer

The answer of In health plan pharmacy networks, service costs...

Question 8

Although ambulatory payment classifications (APCs) bear some resemblance to diagnosis-related groups (DRGs), there are significant differences between APCs and DRGs. One of these differences is that APCs:
A) typically allow for the assignment of multiple classifications for an outpatient visit
B) always apply to a patient's entire hospital stay
C) typically serve as a payment system for inpatient services
D) typically include reimbursements for professional fees

Accepted Answer

Unlike DRGs, which apply to the entire hospitalization and are based solely on the principal diagnosis, APCs allow for the assignment of multiple classifications for an outpatient visit, taking into account all the services provided during the visit, including ancillary services and drugs. APCs are designed to group similar treatments and procedures together and are used as a payment system for outpatient services, such as surgeries or diagnostic tests, but do not typically include reimbursements for professional fees.

Question 9

The Walnut Health Plan provides a number of specialty services for its members. Walnut offers coverage of alternative healthcare, including coverage of treatment methods such as homeopathy and naturopathy. Walnut also offers home healthcare services, and it contracts with home healthcare providers on a non-risk basis to the health plan. The following statements are about the specialty services offered by Walnut. Select the answer choice containing the correct statement:
A) Homeopathy treats diseases by using small doses of substances which, in healthy people, are capable of producing symptoms like those of the disease being treated.
B) Naturopathy is an approach to healthcare that uses electronic monitoring devices to teach a patient to develop conscious control of involuntary bodily functions, such as heart rate.
C) Under a non-risk contract, Walnut most likely transfers the responsibility for arranging home healthcare to the home healthcare provider organizations.
D) Federal law allows Walnut to contract with a home healthcare provider organization only if the provider organization has received accreditation by the Utilization Review Accreditation Commission (URAC).

Accepted Answer

Homeopathy is a treatment method that uses small doses of substances which, in healthy people, are capable of producing symptoms like those of the disease being treated. Option B describes biofeedback therapy, which is not the same as naturopathy. Option C is correct because non-risk contracts allow the health plan to pay a set fee to a contracted provider organization to offer services to the health plan's members. Option D is incorrect because federal law does not mandate URAC accreditation for home healthcare provider organizations.

Question 10

The Aztec Health Plan has a variety of organizational committees related to quality and utilization management. These committees include the medical advisory committee, the credentialing committee, the utilization management committee, and the quality management committee. Of these committees, the one that most likely is responsible for providing oversight of Aztec's inpatient concurrent review process is the:
A) medical advisory committee
B) credentialing committee
C) utilization management committee
D) quality management committee

Accepted Answer

The utilization management committee is responsible for overseeing the utilization of inpatient and outpatient services, including concurrent review. Therefore, it is most likely to be responsible for providing oversight of Aztec's inpatient concurrent review process. The medical advisory committee focuses on clinical matters and providing input on policies and procedures related to medical care. The credentialing committee is responsible for provider credentialing and enrollment. The quality management committee is responsible for monitoring and improving the quality of healthcare services provided by the organization.

Question 11

In order to evaluate and manage the performance of individual providers in its provider network, the Quorum Health Plan implemented a program that focuses on identifying the best and worst outcomes and utilization patterns of its providers. This program is also designed to develop and implement strategies such as treatment protocols and practice guidelines to improve the performance of Quorum's providers. This information indicates that Quorum implemented a program known as:
A) An integrated delivery system (IDS)
B) A coordinated care program
C) Ostensible agency
D) Continuous quality improvement (CQI)

Accepted Answer

The program described in the statement focuses on identifying best and worst outcomes and utilizing patterns of providers, and developing and implementing strategies to improve performance, which aligns with the principles of Continuous Quality Improvement (CQI). Therefore, the answer is D. An Integrated Delivery System (A) is a network of healthcare providers and organizations that provide coordinated care to patients, while coordinated care program (B) refers to a program designed to improve patient outcomes and reduce healthcare costs by integrating and coordinating care. Ostensible agency (C) is a legal concept relating to the relationship between a principal and an agent.

Question 12

The following statement(s) can correctly be made about contracting and reimbursement of specialty care physicians (SCPs):
A) Typically, a health plan should attempt to control utilization of SCPs before attempting to place these providers under a capitation arrangement.
B) Forms of specialty physician reimbursement used by health plans include a retainer and a bundled case rate.
C) Both A and B
D) A only
E) B only
F) Neither A nor B

Accepted Answer

The answer of The following statement(s) can correctly be made...

Question 13

The Crimson Health Plan, a competitive medical plan (CMP), has entered into a Medicare risk contract. One true statement about Crimson is that, as a:
A) CMP, Crimson is regulated by the federal government under the terms of the Tax Equity and Fiscal Responsibility Act (TEFRA)
B) CMP, Crimson is not allowed to charge a Medicare enrollee a premium for any additional benefits it provides over and above Medicare benefits
C) Provider under a Medicare risk contract, Crimson receives for its services a capitated payment equivalent to 85% of the AAPCC
D) Provider under a Medicare risk contract, Crimson is required to deliver to members all Medicare-covered services, without regard to the cost of those services

Accepted Answer

The answer of The Crimson Health Plan, a competitive medical...

Question 14

The Foxfire Health Plan, which has 20,000 members, contracts with dermatologists on a contact capitation basis. The contact capitation arrangement has the following features: Foxfire distributes the money in the contact capitation fund once each quarter and the distribution is based on the point totals accumulated by each dermatologist. Foxfire's per member per month (PMPM) capitation for dermatology services is $1. The dermatologist receives 1 point for each new referral that is not classified as a complicated referral and 1.5 points for each new referral that is classified as complicated. During the first quarter, Foxfire's PCPs made 450 referrals to dermatologists and 100 of these referrals were classified as complicated. One dermatologist, Dr. Shareef Rashad, received 42 of these referrals; 6 of his referrals were classified as complicated. Statements that can correctly be made about Foxfire's contact capitation arrangement include:
A) that the value of each referral point for the first quarter was $120
B) that the value of Foxfire's contact capitation fund for dermatologists for the first quarter was $20,000
C) that the payment that Foxfire owed Dr. Rashad for the first quarter was $6,120
D) all of the above

Accepted Answer

The answer of The Foxfire Health Plan, which has 20,000...

Question 15

When evaluating the success of providers in meeting standards, a health plan must make adjustments for case mix or severity. One true statement about case mix/severity adjustments is that they:
A) Typically are more important in measuring the performance of PCPs than they are in measuring the performance of specialists
B) Help compensate for any unusual factors that may exist in a provider's patient population or in a particular patient
C) Tend to increase the number of providers who are considered to be outliers
D) Allow for a more equitable comparison of data between providers of outpatient care but not providers of inpatient care

Accepted Answer

Case mix/severity adjustments help compensate for any unusual factors that may exist in a provider's patient population or in a particular patient, which makes the evaluation of the success of providers in meeting standards more accurate and fair. They are important for both PCPs and specialists and can increase the number of providers who are considered outliers. These adjustments can be applied to both outpatient and inpatient care.

Question 16

Decide whether the following statement is true or false: The organizational structure of a health plan's network management function often depends on the size and geographic scope of the health plan. With respect to the size of a health plan, it is correct to say that smaller health plans typically have less integration and more specialization of roles than do larger health plans.

Accepted Answer

Smaller health plans typically have more integration and less specialization of roles due to limited resources, while larger health plans can afford more specialized roles.

Question 17

The following statements are about workers' compensation provider networks. Select the answer choice containing the correct statement:
A) In order to supply a provider network to furnish healthcare to workers' compensation beneficiaries, a health plan typically uses the network that has already been created for the group health plan.
B) Typically, case managers for workers' compensation programs are physical therapists.
C) Most states prohibit the use of fee schedules in order to curb the rising workers' compensation healthcare costs.
D) Networks serving workers' compensation patients typically include higher concentrations of specialists than do other provider networks.

Accepted Answer

Networks serving workers' compensation patients typically include higher concentrations of specialists than do other provider networks. This is because injured workers often require specialized care for their injuries, such as orthopedic surgeons or neurologists. Therefore, networks serving workers' compensation patients tend to have a higher concentration of specialists.

Question 18

The following statement(s) can correctly be made about the Balanced Budget Act (BBA) of 1997:
A) The BBA requires Medicare+Choice organizations to be licensed as non-risk-bearing entities under federal law.
B) The Centers for Medicaid and Medicare Services (CMS) is responsible for implementing the BBA.
C) Both A and B
D) A only
E) B only
F) Neither A nor B

Accepted Answer

The Balanced Budget Act of 1997 requires Medicare+Choice organizations to be licensed as non-risk-bearing entities under federal law, and the Centers for Medicare and Medicaid Services (CMS) is responsible for implementing the BBA.

Question 19

The Omnibus Budget Reconciliation Act of 1986 (OBRA 1986) established the Programs of All- Inclusive Care for the Elderly (PACE). One characteristic of the PACE programs is that:
A) They are available to United States citizens only after they reach age 65.
B) They have an upper dollar limit.
C) They receive a monthly capitation that is set at 100% of the Adjusted Average Per Capita Cost (AAPCC).
D) PACE providers receive capitated payments only through the PACE agreement.

Accepted Answer

PACE providers receive capitated payments through the PACE agreement, which allows them to manage the care of enrolled individuals with a fixed amount of money per participant.

Question 20

Reimbursement for prescription drugs and services in a third-party prescription drug plan typically follows one of two approaches: a reimbursement approach or a service approach. One true statement about these approaches is that:
A) Payments under the reimbursement method typically are not subject to any copayment or deductible requirements
B) Payments under the reimbursement approach are typically based on a structured reimbursement schedule rather than on usual, customary, and reasonable (UCR) charges
C) Most major medical plans follow a service approach
D) Most current health plan prescription drug plans are service plans

Accepted Answer

Most current health plan prescription drug plans are service plans, where the plan pays the pharmacy directly for the covered drugs, and the patient typically pays a copayment or coinsurance at the point of sale.

Exam 4: Network Management

One true statement about the Medicaid program in the United States is that:

The Bruin Health Plan is a Social Health Maintenance Organization (SHMO) . As an SHMO, Bruin:

The employees of the Trilogy Company are covered by a typical workers' compensation program. Under this coverage, Trilogy employees are bound by the exclusive remedy doctrine, which most likely:

One characteristic of the workers' compensation program is that:

In health plan pharmacy networks, service costs consist of two components: costs for services associated with dispensing prescription drugs and costs for cognitive services. Cognitive services typically include:

Although ambulatory payment classifications (APCs) bear some resemblance to diagnosis-related groups (DRGs) , there are significant differences between APCs and DRGs. One of these differences is that APCs:

The following statement(s) can correctly be made about contracting and reimbursement of specialty care physicians (SCPs) :

The Crimson Health Plan, a competitive medical plan (CMP) , has entered into a Medicare risk contract. One true statement about Crimson is that, as a:

When evaluating the success of providers in meeting standards, a health plan must make adjustments for case mix or severity. One true statement about case mix/severity adjustments is that they:

The following statements are about workers' compensation provider networks. Select the answer choice containing the correct statement:

The following statement(s) can correctly be made about the Balanced Budget Act (BBA) of 1997:

The Omnibus Budget Reconciliation Act of 1986 (OBRA 1986) established the Programs of All- Inclusive Care for the Elderly (PACE) . One characteristic of the PACE programs is that:

Reimbursement for prescription drugs and services in a third-party prescription drug plan typically follows one of two approaches: a reimbursement approach or a service approach. One true statement about these approaches is that: