AHM-520 Exam Dumps : Health Plan Finance and Risk Management

The net effect of using provider reimbursement contracts to transfer risk is that the health plan’s net worth requirement increases.

Once the health plan has transferred utilization risk to its providers, it is relieved of the legal obligation to provide medical services to plan members in the event of the provider’s insolvency.

The greater the amount of risk the health plan transfers to providers, the larger the credit-risk factor becomes in the health plan’s RBC formula.

By decreasing its utilization risk, the health plan increases its underwriting risk.

Cash receipt, but not cash disbursement, is an important component of cash-basis accounting

Most companies use a pure cash-basis accounting system

Cash-basis accounting records revenue according to the realization principle and expenses according to the matching principle

Health insurance companies and health plans that fall under the jurisdiction of state insurance commissioners must report some items on a cash basis for statutory reporting purposes

Accent = unprofitable business

Bolton = high acquisition rate

Accent = unprofitable business

Bolton = low acquisition rate

Accent = high profits

Bolton = high acquisition rate

Accent = high profits

Bolton = low acquisition rate