AHIP Certification AHM-520 Exam Dumps

Health Plan Finance and Risk Management Questions and Answers

Question 25

A health plan most likely would use benchmarking in order to

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Measure its performance and practices against those of other companies to help identify those practices that will lead to superior performance in a variety of financial and non-financial areas

Calculate the percentage changes in its financial statement items over several consecutive accounting periods

Determine both the direction and velocity of trends in its financial statements

Display only percentage relationships in its financial statements

Question 26

Geena Falk is eligible for both Medicare and Medicaid coverage. If Ms. Falk incurs a covered expense, then:

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Medicaid will be Ms. Falk’s primary insurer

Medicare will be Ms. Falk’s primary insurer

Either Medicare or Medicaid will be Ms. Falk’s primary insurer depending on her election

Medicare and Medicaid will each be responsible for one-half of Ms. Falk’s covered expense

Question 27

All publicly traded health plans in the United States are required to prepare financial statements for use by their external users in accordance with generally accepted accounting principles (GAAP). In addition, health insurers and health plans that fall under the jurisdiction of state insurance departments are required by law to prepare certain financial statements in accordance with statutory accounting practices (SAP). In a comparison of GAAP to SAP, it is correct to say that:

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GAAP is established and promoted by the National Association of Insurance Commissioners (NAIC), whereas SAP is established and promoted by the Financial Accounting Standards Board (FASB)

The going-concern concept is an underlying premise of GAAP, whereas SAP tends to focus on the liquidation value of the MCO or the insurer

GAAP provides for a single method of valuing all of a health plan’s assets, whereas SAP offers the health plan more than one method for valuing its assets

The principle of conservatism is fundamental to GAAP, whereas SAP generally is not conservative in nature

Question 28

The Coral Health Plan, a for-profit health plan, has two sources of capital:

Debt and equity. With regard to these sources of capital, it can correctly be stated that

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Coral's equity holders have an ownership interest in the health plan

The interest that Coral pays on its debt most likely is not tax deductible to Coral

Coral's debt holders have no legal claim to Coral's assets

Equity is a more risky source of capital, from Coral's perspective, than is debt

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Health Plan Finance and Risk Management Questions and Answers

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