Network Management v4.0 (AHM-530)

Question 1

Lakesha Frazier, a member of a health plan in a rural area, had been experiencing heart palpitations and shortness of breath. Ms. Fraziers primary care provider (PCP) referred her to a local hospital for an electrocardiogram. The results of the electrocardiogram were transmitted for diagnosis via high-speed data transmission to a heart specialist in a city 500 miles away. This information indicates that the results of Ms. Fraziers electrocardiogram were transmitted using a communications system known as

A. Anarrow network
B. An integrated healthcare delivery system
C. Telemedicine
D. Customized networking

Answer 1

C. Telemedicine

Question 2

The Octagon Health Plan includes a typical indemnification clause in its provider contracts. The purpose of this clause is to require Octagons network providers to

A. Agree not to sue or file claims against an Octagon plan member for covered services
B. Reimburse Octagon for costs, expenses, and liabilities incurred by the health plan as a result of a providers actions
C. Maintain the confidentiality of the health plan’s proprietary information
D. Agree to accept Octagons payment as payment in full and not to bill members for anything other than contracted copayments, coinsurance, or deductibles

Answer 2

B. Reimburse Octagon for costs, expenses, and liabilities incurred by the health plan as a result of a providers actions

Question 3

From the following answer choices, choose the type of clause or provision described in this situation. The Idlewilde Health Plan includes in its provider contracts a clause or provision that allows the terms of the contract to renew unchanged each year.

A. Cure provision
B. Hold-harmless provision
C. Evergreen clause
D. Exculpation clause

Answer 3

C. Evergreen clause

Question 4

The Justice Health Plan is eligible to submit reportable actions against medical practitioners to the National Practitioner Data Bank (NPDB). Justice is considering whether it should report the following actions to the NPDB:
Action 1A medical malpractice insurer made a malpractice payment on behalf of a dentist in Justices network for a complaint that was settled out of court.
Action 2Justice reprimanded a PCP in its network for failing to follow the health plans referral procedures.
Action 3Justice suspended a physicians clinical privileges throughout the Justice network because the physicians conduct adversely affected the welfare of a patient.
Action 4Justice censured a physician for advertising practices that were not aligned with
Justices marketing philosophy.
Of these actions, the ones that Justice most likely must report to the NPDB include Actions

A. 1, 2, and 3 only
B. 1 and 3 only
C. 2 and 4 only
D. 3 and 4 only

Answer 4

B. 1 and 3 only

Question 5

With respect to hiring practices, one step that a health plan most likely can take to avoid violating the terms of the Americans with Disabilities Act (ADA) is to

A. Require a medical examination prior to accepting an application for employment
B. Include in the employment application questions pertaining to health status
C. Make a conditional offer of employment, and then require the candidate to have an examination prior to granting specific staff privileges
D. Require applicants to answer questions pertaining to the use of drugs and alcohol

Answer 5

C. Make a conditional offer of employment, and then require the candidate to have an examination prior to granting specific staff privileges

Question 6

The following statements are about the negotiation process of provider contracting. Three of the statements are true and one of the statements is false. Select the answer choice containing the FALSE statement.

A. While preparing for negotiations, the health plan usually sends the provider an application to join the provider network, a list of credentialing requirements, and a copy of the proposed provider contract, which may or may not include the proposed reimbursement schedule.
B. In general, the ideal negotiating style for provider contracting is a collaborative approach.
C. Typically, the health plan and the provider negotiate the reimbursement arrangement between the parties before they negotiate the scope of services and the contract language.
D. The actual signing of the provider contract typically takes place after negotiations are completed.

Answer 6

C. Typically, the health plan and the provider negotiate the reimbursement arrangement between the parties before they negotiate the scope of services and the contract language.

Question 7

Dr. Eve Barlow is a specialist in the Amity Health Plans provider network. Dr. Barlows provider contract with Amity contains a typical most-favored-nation arrangement. The purpose of this arrangement is to

A. Require Dr. Barlow and Amity to use arbitration to resolve any disputes regarding the contract
B. Specify that the contract is to be governed by the laws of the state in which Amity has its headquarters
C. Require Dr. Barlow to charge Amity her lowest rate for a medical service she has provided to an Amity plan member, even if the rate is lower than the price negotiated in the contract
D. State that the contract creates an employment or agency relationship, rather than an independent contractor relationship, between Dr. Barlow and Amity

Answer 7

C. Require Dr. Barlow to charge Amity her lowest rate for a medical service she has provided to an Amity plan member, even if the rate is lower than the price negotiated in the contract

Question 8

For this question, if answer choices (A) through (C) are all correct, select answer choice
(D). Otherwise, select the one correct answer choice. A credentials verification organization
(CVO) can be certified to verify certain pertinent credentialing information, including

A. Liability claims histories of prospective providers
B. Hospital privileges of prospective providers
C. Malpractice insurance on prospective providers
D. All of the above

Answer 8

D. All of the above

Question 9

The Avignon Company discontinued its contract with a traditional indemnity insurer and contracted exclusively with the Minaret Health Plan to provide the sole healthcare plan to
Avignons employees. By agreeing to an exclusive contract with Minaret, Avignon has entered into a type of healthcare contract known as

A. a carrier guarantee arrangement
B. open access
C. total replacement coverage
D. selective contract coverage

Answer 9

C. total replacement coverage

Question 10

For this question, if answer choices (A) through C) are all correct, select answer choice (D).
Otherwise, select the one correct answer choice.
Understanding the level of health plan penetration in a particular market can help a health plan determine which products are most appropriate for that market. Indicators of a mature health plan market include

A. A reduction in the rate of growth in health plan premium levels
B. Areduction in the level of outcomes management and improvement
C. An increase in the rate of inpatient hospital utilization
D. All of the above

Answer 10

A. A reduction in the rate of growth in health plan premium levels

Question 11

The National Committee for Quality Assurance (NCQA) has integrated accreditation with
Health Employer Data and Information Set (HEDIS) measures into a program called
Accreditation 99. One statement that can correctly be made about these accreditation standards is that

A. Health plans are required by law to report HEDIS results to NCQA
B. HEDIS restricts its reporting criteria to a narrow group of quantitative performance measures, while NCQA includes a broad range of qualitative performance measures
C. Private employer groups purchasing health care coverage increasingly require both NCQA accreditation and HEDIS reporting
D. HEDIS includes measures of a health plans effectiveness of care rather than its cost of care

Answer 11

C. Private employer groups purchasing health care coverage increasingly require both NCQA accreditation and HEDIS reporting

Question 12

If a third party is responsible for injuries to a plan member of the Hope Health Plan, then
Hope has a contractual right to file a claim for the resulting healthcare costs against the third party. This contractual right to recovery from the third party is known as

A. Subrogation
B. Partial capitation
C. Coordination of benefits
D. A remedy provision

Answer 12

A. Subrogation

Question 13

One reason that an health plan would want to use the actual acquisition cost (AAC) pricing system to calculate its drug costs is that, of the systems commonly used to calculate drug costs, the AAC system

A. Provides the lowest level of cost for the health plan
B. Most closely represents what pharmacies are actually charged for prescription drugs
C. Offers the best control over multiple-source pharmaceutical products
D. Is the least expensive pricing system for the health plan to implement

Answer 13

A. Provides the lowest level of cost for the health plan

Question 14

Network managers rely on a health plans claims administration department for much of the information needed to manage the performance of providers who are not under a capitation arrangement. Examining claims submitted to a health plans claims administration department enables the health plan to

A. determine the number of healthcare services delivered to plan members
B. monitor the types of services provided by the health plan’s entire provider network
C. evaluate providers practice patterns and compliance with the health plans procedures for the delivery of care
D. all of the above

Answer 14

D. all of the above

Question 15

One true statement about the compensation arrangement known as the case rate system is that, under this system,

A. Providers stand to gain or lose based on the number and types of treatments used for each case
B. Providers have no incentives to take an active role in managing cost and utilization
C. Payors cannot adjust standard case rates to reflect the severity of the patients condition or complications that arise from multiple medical problems
D. Payors have the opportunity to benefit from the provider’s cost savings

Answer 15

A. Providers stand to gain or lose based on the number and types of treatments used for each case

Question 16

The sizes of the businesses in a market affect the types of health programs that are likely to be purchased. Compared to smaller employers (those with fewer than 100 employees), larger employers (those with more than 1,000 employees) are

A. more likely to contract with indemnity health plans
B. more likely to offer their employees a choice in health plans
C. less likely to contract with health plans
D. less likely to require a wide variety of benefits

Answer 16

B. more likely to offer their employees a choice in health plans

Question 17

The Festival Health Plan is in the process of recruiting physicians for its provider network.
Festival requires its network physicians to be board certified. The following individuals are provider applicants whose qualifications are being considered:
Applicant 1 has completed his surgical residency, and he recently passed a qualifying examination in his field.
Applicant 2 has completed her residency in dermatology, and she is scheduled to take qualifying examinations in the next Six months.
Applicant 3 completed his residency in pediatric medicine six years ago, but he has not yet passed a qualifying examination in his field.
With regard to these applicants, it can correctly be stated that only

A. Applicants 1 and 2 are board certified
B. Applicants 2 and 3 are board certified
C. Applicant 1 is board certified
D. Applicant 3 is board certified

Answer 17

C. Applicant 1 is board certified

Question 18

The Sweeney Health Plan uses the discounted fee-for-service (DFFS) method to compensate some of its providers. Under this method of compensation, Sweeney calculates payments based on

A. The standard fees of indemnity health insurance plans, adjusted by region
B. The Medicare fee schedules used by other health plans, adjusted by region
C. Whichever amount is higher, the billed charge or the DFFS amount
D. Whichever amount is lower, the billed charge or the DFFS amount

Answer 18

D. Whichever amount is lower, the billed charge or the DFFS amount

Question 19

The following statements are about factors that health plans should consider as they develop provider networks in rural and urban markets. Three of the statements are true, and one of the statements is false. Select the answer choice that contains the FALSE statement.

A. Compared to providers in urban areas, providers in rural areas are less likely to offer discounts to health plans in exchange for directed patient volume.
B. In urban areas, limiting the number of specialists on a panel usually affects the networks market appeal more than does limiting the number of primary care physicians.
C. The greatest opportunity to create competition in rural areas is among the specialty providers in other nearby communities.
D. Typically, hospital contracting is easier in urban areas than in rural areas.

Answer 19

B. In urban areas, limiting the number of specialists on a panel usually affects the networks market appeal more than does limiting the number of primary care physicians.

Question 20

In developing a provider network in an large city with a high concentration of young families, the Gypsum Health Plan has set goals focused on the needs of that particular market. The following statements are about this situation. Three of the statements are true, and one of the statements is false. Select the answer choice that contains the FALSE statement.

A. Gypsum should attempt to recruit providers who offer extended office hours.
B. Gypsum can use the cost-effectiveness of its own existing networks as a benchmark for its cost-savings goals in this market.
C. Gypsum will most likely attempt to contract with HMOs.
D. Gypsum most likely should set lower cost-savings goals in this market than it would in a rural market with few young families.

Answer 20

D. Gypsum most likely should set lower cost-savings goals in this market than it would in a rural market with few young families.

Question 21

The Athena Medical Group has purchased from the Corinthian Insurance Company individual stop-loss insurance coverage for primary and specialty care services with a
$5,000 attachment point and 10 percent coinsurance. One of Athenas patients accrued
$8,000 of medical costs for primary and specialty care treatment. In this situation, Athena will be responsible for paying an amount equal to

A. $300, and Corinthian is obligated to reimburse Athena in the amount of $2,700
B. $2,700, and Corinthian is obligated to reimburse Athena in the amount of $5,300
C. $5,300, and Corinthian is obligated to reimburse Athena in the amount of $2,700
D. $7,700, and Corinthian is obligated to reimburse Athena in the amount of $300

Answer 21

C. $5,300, and Corinthian is obligated to reimburse Athena in the amount of $2,700

Question 22

The Gladspell HMO has contracted with the Ellysium Hospital to provide subacute care to its plan members. Gladspell pays Ellysium by using a per diem reimbursement method.
If the Ellysium subacute care unit is typical of most hospital-based subacute skilled nursing units, then this unit could be used for patients who no longer need to be in the hospitals acute care unit but who still require

A. Daily medical care and monitoring
B. Regular rehabilitative therapy
C. Respiratory therapy
D. All of the above

Answer 22

D. All of the above

Question 23

The Gladspell HMO has contracted with the Ellysium Hospital to provide subacute care to its plan members. Gladspell pays Ellysium by using a per diem reimbursement method.
If Gladspells per diem contract with Ellysium is typical, then the per diem payment will cover such medical costs as

A. Laboratory tests
B. Respiratory therapy
C. Semiprivate room and board
D. Radiology services

Answer 23

C. Semiprivate room and board

Question 24

The method of pharmaceutical reimbursement under which a plan member obtains prescription drugs from participating network pharmacies by presenting proper identification and paying a specified copayment is the

A. Wholesale acquisition cost (WAC) approach
B. Reimbursement approach
C. Service approach
D. Cognitive approach

Answer 24

C. Service approach

Question 25

The following statements are about the inclusion of unified pharmacy benefits in health plan healthcare packages. Select the answer choice containing the correct statement.

A. When pharmacy benefits management is incorporated into an health plans operations as a unified benefit, the health plan establishes pharmacy networks, but a pharmacy benefits management (PBM) company manages their operations.
B. Under a unified pharmacy benefit, an health plan cannot use mail-order services to provide drugs to its members.
C. Compared to programs that do not manage pharmacy benefits in-house, unified pharmacy benefits programs typically give health plans more control over patient access to prescription drugs.
D. Compared to programs that do not manage pharmacy benefits in-house, unified pharmacy benefits programs make drug therapy interventions for plan members more difficult.

Answer 25

C. Compared to programs that do not manage pharmacy benefits in-house, unified pharmacy benefits programs typically give health plans more control over patient access to prescription drugs.

Question 26

The Holiday Health Plan is preparing to enter a new market. In order to determine the optimal size of its provider panel in the new market, Holiday is conducting a competitive analysis of provider networks of the markets existing health plans. Consider whether, in conducting its competitive analysis, Holiday should seek answers to the following questions:
Question 1: What are the cost-containment strategies of the health plans with increasing market shares?
Question 2: What are the premium strategies of the health plans with large market shares?
Question 3: What are the characteristics of health plans that are losing market share?
In its competitive analysis, Holiday should most likely obtain answers to questions

A. 1, 2, and 3
B. 1 and 2 only
C. 1 and 3 only
D. 2 and 3 only

Answer 26

A. 1, 2, and 3

Question 27

Four types of APCs are ancillary APCs, medical APCs, significant procedure APCs, and surgical APCs. An example of a type of APC known as

A. An ancillary APC is a biopsy
B. Amedical APC is radiation therapy
C. A significant procedure APC is a computerized tomography (CT) scan
D. A surgical APC is an emergency department visit for cardiovascular disease

Answer 27

C. A significant procedure APC is a computerized tomography (CT) scan

Question 28

Dr. Janet Dubois is a radiologist who practices exclusively at the Rightway Healthcare Center. This information indicates that Dr. Dubois is employed by Rightway as

A. An academic practitioner
B. An independent practitioner
C. A network manager
D. A hospital-based specialist

Answer 28

D. A hospital-based specialist

Question 29

From the following answer choices, choose the term that best matches the description.
Members of a physician-hospital organization (PHO) denied membership to a physician solely because the physician has admitting privileges at a competing hospital.

A. Group boycott
B. Horizontal division of territories
C. Tying arrangements
D. Concerted refusal to admit

Answer 29

A. Group boycott

Question 30

Salvatore Arris is a member of the Crescent Health Plan, which provides its members with a full range of medical services through its provider network. After suffering from debilitating headaches for several days, Mr. Arris made an appointment to see Neal Prater, a physicians assistant in the Crescent network who provides primary care under the supervision of physician Dr. Anne Hunt. Mr. Prater referred Mr. Arris to Dr. Ginger Chen, an ophthalmologist, who determined that Mr. Arris symptoms were indicative of migraine headaches. Dr. Chen prescribed medicine for Mr. Arris, and Mr. Arris had the prescription filled at a pharmacy with which Crescent has contracted. The pharmacist, Steven Tucker, advised Mr. Arris to take the medicine with food or milk. In this situation, the person who functioned as an ancillary service provider is

A. Mr. Prater
B. Dr. Hunt
C. Dr. Chen
D. Mr. Tucker

Answer 30

D. Mr. Tucker

Question 31

The following statements are about the specialist component of a provider panel. Select the answer choice containing the correct statement.

A. Ideally, a health plan should have every specialist category represented on its provider panel with appropriate geographic distribution.
B. Most specialist contracts do not ensure the providers adherence to UM policies set up by the health plan.
C. No-balance-billing clauses are not desirable in health plan contracts with specialists.
D. In geographic regions where there is a shortage of PCPs, a health plan is not permitted to contract with specialists to perform primary care services, even for patients with chronic conditions.

Answer 31

A. Ideally, a health plan should have every specialist category represented on its provider panel with appropriate geographic distribution.

Question 32

The Omni Health Plan is interested in expanding the specialty services it offers to its plan members and is considering contracting with the following providers of specialty services:
The Apex Company, a managed vision care organization (MVCO)
The Baxter Managed Behavioral Healthcare Organization (MBHO)
The Cheshire Dental Health Maintenance Organization (DHMO)
As part of its credentialing process, Omni would like to verify that each of these providers has met NCQAs accreditation standards. However, with regard to these three specialty service providers, an NCQA accreditation program currently exists for

A. Apex and Baxter only
B. Apex and Cheshire only
C. Baxter and Cheshire only
D. Baxter only

Answer 32

D. Baxter only

Question 33

The Brice Health Plan submitted to Clarity Health Services a letter of intent indicating
Brices desire to delegate its demand management function to Clarity. One true statement about this letter of intent is that it

A. creates a legally binding relationship between Brice and Clarity
B. most likely contains a confidentiality clause committing Brice and Clarity to maintain the confidentiality of documents reviewed and exchanged in the process
C. prohibits Clarity from performing similar delegation activities for other health plans
D. most likely contains a detailed description of the functions that Brice will delegate to Clarity

Answer 33

B. most likely contains a confidentiality clause committing Brice and Clarity to maintain the confidentiality of documents reviewed and exchanged in the process

Question 34

Many health plans opt to carve out behavioral healthcare (BH) services. However, one argument against carving out BH services is that this action most likely can result in

A. Slower access to BH care for plan members
B. Increased collaboration between BH providers and PCPs
C. Fewer specialized BH services for plan members
D. Decreased continuity of BH care for plan members

Answer 34

D. Decreased continuity of BH care for plan members

Question 35

A provider contract describes the responsibilities of each party to the contract. These responsibilities can be divided into provider responsibilities, health plan responsibilities, and mutual obligations. Mutual obligations typically include

A. provisions for marketing the plan’s product
B. payment arrangements between the plan and the provider
C. verification of the plan’s eligibility to do business
D. management of the contents of members’ medical records

Answer 35

B. payment arrangements between the plan and the provider

Question 36

Most health plan contracts provide an outline of the criteria that a healthcare service must meet in order to be considered medically necessary. Typically, in order for a healthcare service to be considered medically necessary, the service provided by a physician or other healthcare provider to identify and treat a members illness or injury must be

A. Consistent with the symptoms of diagnosis
B. Furnished in the least intensive type of medical care setting required by the members condition
C. In compliance with the standards of good medical practice
D. All of the above

Answer 36

D. All of the above

Question 37

From the following answer choices, choose the type of clause or provision described in this situation.
The provider contract between Dr. Olin Norquist and the Granite Health Plan specifies a time period for the party who has breached the contract to remedy the problem and avoid termination of the contract.

A. Cure provision
B. Hold-harmless provision
C. Evergreen clause
D. Exculpation clause

Answer 37

A. Cure provision

Question 38

The method that the Autumn Health Plan uses for reimbursing dermatologists in its provider network involves paying them out of a fixed pool of funds that is actuarially determined for this specialty. The amount of funds that Autumn allocates to dermatologists is based on utilization and costs of services for that discipline.
Under this reimbursement method, a dermatologist who is under contract to Autumn accumulates one point for each new referral made to the specialist by Autumns PCPs. If the referral is classified as complicated, then the dermatologist receives 1.5 points. The value of Autumns dermatology services fund for the first quarter was $15,000. During the quarter, Autumns PCPs made 90 referrals, and 20 of these referrals were classified as complicated.
Autumns method of reimbursing specialty providers can best be described as a

A. Disease-specific arrangement
B. Contact capitation arrangement
C. Risk adjustment arrangement
D. Withhold arrangement

Answer 38

B. Contact capitation arrangement

Question 39

In the paragraph below, two statements each contain a pair of terms enclosed in parentheses. Determine which term correctly completes each statement. Then select the answer choice that contains the two terms you have chosen.
In most states, a health plan can be held responsible for a providers negligent malpractice.
This legal concept is known as (vicarious liability / risk sharing). One step that health plans can take to reduce their exposure to malpractice lawsuits is to state in health plan-provider agreements,marketing collateral, and membership literature that the providers are
(employees of the health plan / independent contractors).

A. Vicarious liability / employees of the health plan
B. Vicarious liability / independent contractors
C. Risk sharing / employees of the health plan
D. Risk sharing / independent contractors

Answer 39

B. Vicarious liability / independent contractors

Question 40

The following statements are about incentive programs used for providers. Select the answer choice containing the correct statement.

A. Risk pools based on aggregate provider performance eliminate problems associated with free riders.
B. A hospital bonus pool is usually split between the health plan and the PCPs.
C. Bonus pools based on the performance of specific providers are usually easier to administer than those based on the performance of the plan as a whole.
D. For providers, withhold arrangements eliminate the risk of losing base income.

Answer 40

B. A hospital bonus pool is usually split between the health plan and the PCPs.