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Home AHIP AHM-520

AHIP AHM-520 Exam Practice Questions (P. 5)

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Question #21
Under GAAP, three approaches to expense recognition are generally allowed: associating cause and effect, systematic and rational allocation, and immediate recognition.
A health plan most likely would use the approach of systematic and rational allocation in order to:
  1. A
    Report the payment of the health plan's utility bills
  2. B
    Spread the payment of sales force commissions over the premium paying period of healthcare coverage
  3. C
    Report the fees paid by the health plan to attorneys and consultants
  4. D
    Depreciate the cost of a new computer system over the useful life of the system

Correct Answer:
D

Question #22
The Jasmine Company, which self-funds the health plan for its 200 employees, has established a 501(c)(9) trust as a means of addressing possible claims fluctuations under the health plan. This plan is not a part of a collective bargaining process.
A potential disadvantage to Jasmine of using a 501(c)(9) trust is that:
  1. A
    The cost of maintaining the trust may be prohibitive to Jasmine
  2. B
    The trust must always maintain enough assets to pay the health plan's claims that have been incurred but not yet paid
  3. C
    Jasmine is prohibited from earning any return on the trust assets
  4. D
    The contributions to this trust are not deductible for federal income tax purposes

Correct Answer:
A

Question #23
The following statements are about various reimbursement arrangements that health plans have with hospitals. Select the answer choice containing the correct statement.
  1. A
    A sliding scale per-diem charges arrangement differs from a sliding scale discount on charges arrangement in that only a sliding scale per-diem charges arrangement is based on total volume of admissions and outpatient procedures.
  2. B
    Under a typical reimbursement arrangement that is based on diagnosis related groups (DRGs), if the payment amount is fixed on the basis of diagnosis, then any reduction in costs resulting from a reduction in days will go to the health plan rather than to the hospital.
  3. C
    A negotiated straight per-diem charge requires payment of a single charge for a day in the hospital, regardless of any actual charges or costs incurred during the hospital stay.
  4. D
    A straight discount on charges arrangement is the most common reimbursement method in markets with high levels of health plans.

Correct Answer:
C

Question #24
A key factor that distinguishes the various types of health plans is the type and amount of risk that a health plan assumes with respect to the delivery and financing of healthcare benefits.
An example of a type of health plan that typically assumes the financial risk of delivering and financing healthcare benefits is a:
  1. A
    Third party administrator (TPA)
  2. B
    Utilization review organization (URO)
  3. C
    Preferred provider organization (PPO)
  4. D
    Pharmacy benefit management (PBM) plan

Correct Answer:
C

Question #25
One difference between the internal and external analysis of a health plan's financial information is that:
  1. A
    Internal analysis of the health plan can be more detailed and more specific than can external analysis
  2. B
    Internal analysts are more likely than external analysts to want comparative financial data about the health plan
  3. C
    Only internal analysts use trend analysis to analyze the health plan's financial statements
  4. D
    Only internal analysts typically conduct the financial analysis of the health plan themselves

Correct Answer:
A

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