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Health Plan Finance and Risk Management Questions and Answers

Question 17

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

Options:

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

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

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.

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.

Question 18

The Jamal Health Plan operates in a state that mandates that a health plan either allow providers to become part of its network or reimburse those providers at the health plan’s negotiated-contract rate, so long as the non-contract provider is willing to perform the services at the contract rate. This type of law is known as:

Options:

A fair procedure law

A direct access law

An any willing provider law

A due process law

Question 19

The amount of risk for health plan products is dependent on the degree of influence and the relationships that the health plan maintains with its providers. Consider the following types of managed care structures:

Preferred provider organization (PPO)
Group model HMO
Staff model health maintenance organization (HMO)
Traditional health insurance

Of these health plan products, the one that would most likely expose a health plan to the highest risk is the:

Options:

preferred provider organization (PPO)

group model HMO

staff model health maintenance organization (HMO)

traditional health insurance

Question 20

The risk-based capital formula for health plans defines a number of risks that can impact a health plan’s solvency. These categories reflect the fact that the level of risk faced by health plans is significantly impacted by provider reimbursement methods that shift utilization risk to providers. The following statements are about the effect of a health plan transferring utilization risk to providers. Select the answer choice containing the correct statement:

Options:

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.

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Health Plan Finance and Risk Management Questions and Answers

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