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

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Health Plan Finance and Risk Management Questions and Answers

Question 1

The following statements are about a health plan's evaluation of its responsibility centers. Select the answer choice containing the correct statement.

Options:

A.

When analyzing budget variances, a health plan's management should pay attention to unfavorable variances only.

B.

A health plan can reduce the problem of unattainable goals by involving responsibility managers in the preparation of their centers' budgets.

C.

One reason that a health plan would use cost-based transfer prices to evaluate the performance of its profit centers and investment centers is because, under this method of setting transfer prices, the selling center has maximum incentive to operate effectively and control costs.

D.

In responsibility accounting, all employees who have any influence over a health plan's department are held equally accountable for the operations and financial outcomes of that department.

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Question 2

One true statement about cash-basis accounting is that

Options:

A.

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

B.

Most companies use a pure cash-basis accounting system

C.

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

D.

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

Question 3

A health plan that capitates a provider group typically provides or offers to provide stop-loss coverage to that provider group.

Options:

A.

True

B.

False