NEW QUESTION 1
After conducting a business portfolio analysis, the Acorn Health Plan decided to pursue a harvest strategy with one of its strategic business units (SBUs)-Guest Behavioral Healthcare. By following a harvest strategy with Guest, Acorn most likely is seeking to

• A. Maximize Guest's short-term earnings and cash flow
• B. Increase Guest's market share
• C. Maintain Guest's market position
• D. Sacrifice immediate earnings in order to fund Guest's growth

Answer: A

NEW QUESTION 2
Solvency standards for Medicare provider-sponsored organizations (PSOs) are divided into three parts: (1) the initial stage, (2) the ongoing stage, and (3) insolvency. In the initial stage, prior to CMS approval, a Medicare PSO typically must have a minimum net worth of

• A. $750,000
• B. $1,000,000
• C. $1,500,000
• D. $2,000,000

Answer: C

NEW QUESTION 3
Health maintenance organizations (HMOs) seeking federal qualification under the HMO Act of 1973 and its amendments must meet requirements in four basic operational areas. One operational requirement for qualification is that an HMO must

• A. Ensure that at least 1/3 of its policy-making body is comprised of HMO members
• B. Ensure that there is adequate representation of underserved communities on its policy-making body
• C. Have an ongoing quality assurance program that meets the requirements of the Centers for Medicaid & Medicare Services (CMS), stresses health outcomes, and provides for review by health professionals
• D. Test, safeguard, and promote quality of care by following detailed programmatic techniques that are explained in CMS's Federally Qualified HMO (FQHMO) Manual

Answer: C

NEW QUESTION 4
The following situations illustrate per se violations of federal antitrust laws:
Situation A - Two groups of providers agreed among themselves that each provider will do business with health plans only on a fee-for-service basis.
Situation B - In order to avoid competing with each other, two independent, competing physicianhospital organizations (PHOs) divide the geographic areas in which they will market their services.
From the following answer choices, select the response that correctly identifies the types of per se violations illustrated by these situations.

• A. Situation A: price fixing; Situation B: horizontal division of markets
• B. Situation A: price fixing; Situation B: tying arrangement
• C. Situation A: horizontal group boycott; Situation B: horizontal division of markets
• D. Situation A: horizontal group boycott; Situation B: tying arrangement

Answer: A

NEW QUESTION 5
Greenpath Health Services, Inc., an HMO, recently terminated some providers from its network in response to the changing enrollment and geographic needs of the plan. A provision in Greenpath's contracts with its healthcare providers states that Greenpath can terminate the contract at any
time, without providing any reason for the termination, by giving the other party a specified period of notice.
The state in which Greenpath operates has an HMO statute that is patterned on the NAIC HMO Model Act, which requires Greenpath to notify enrollees of any material change in its provider network. As required by the HMO Model Act, the state insurance department is conducting an examination of Greenpath's operations. The scope of the on-site examination covers all aspects of Greenpath's market conduct operations, including its compliance with regulatory requirements. The contracts between Greenpath and its healthcare providers contain a termination provision known as

• A. An 'economic credentialing' termination provision
• B. A 'breach of contract' termination provision
• C. A 'fair procedure' termination provision
• D. A 'without cause' termination provision

Answer: D

NEW QUESTION 6
Any willing provider laws have their share of proponents and opponents. Arguments commonly made in opposition to any willing provider laws include

• A. That such laws reduce the number of providers in a health plan's network
• B. That such laws limit consumer choice to coverage options that are more costly than networkbased plans
• C. That such laws encourage providers to offer discounts in exchange for patient volume
• D. All of the above

Answer: B

NEW QUESTION 7
In examining accountability in the current managed care environment, one is likely to find that combinations of various models of accountability are in operation. Under one model of accountability, the primary mechanisms for accountability are the mechanisms of the marketplace- failure to meet standards will result in a loss of demand for services. By definition, this model of accountability is called the

• A. Professional model of accountability
• B. Political model of accountability
• C. Due diligence model of accountability
• D. Economic model of accountability

Answer: D

NEW QUESTION 8
Certificate of need (CON) laws apply to health plans in a variety of ways, depending upon the state. By definition, CON laws are laws that are designed to

• A. Regulate the construction, renovation, and acquisition of healthcare facilities as well as the purchase of major medical equipment in a geographical area
• B. Protect commerce from unlawful restraint of trade, price discrimination, price fixing, reduced competition, and monopolies
• C. Determine benefit payments when a person is covered by more than one plan, such as two group health plans
• D. License and regulate health plans that wish to establish and operate an HMO

Answer: A

NEW QUESTION 9
Determine whether the following statement is true or false:
Failing to adopt and implement standards for the prompt investigation and settlement of claims is an example of an activity that would be considered an improper claims practice according to the NAIC Model Unfair Claims Settlement Practices Act.

• A. True
• B. False

Answer: A

NEW QUESTION 10
From the following answer choices, choose the term that best corresponds to this description. The
SureQual Group is a group of practicing physicians and other healthcare professionals paid by the federal government to review services ordered or furnished by other practitioners in the same medical fields for the purpose of determining whether medical services provided were reasonable and necessary, and to monitor the quality of care given to Medicare patients.

• A. Health insuring organization (HIO)
• B. Independent practice association (IPA)
• C. Physician practice management (PPM) company
• D. Peer review organization (PRO)

Answer: D

NEW QUESTION 11
SoundCare Health Services, a health plan, recently conducted a situation analysis. One step in
this analysis required SoundCare to examine its current activities, its strengths and weaknesses, and its ability to respond to potential threats and opportunities in the environment. This activity provided SoundCare with a realistic appraisal of its capabilities. One weakness that SoundCare identified during this process was that it lacked an effective program for preventing and detecting violations of law. SoundCare decided to remedy this weakness by using the 1991 Federal
Sentencing Guidelines for Organizations as a model for its compliance program.
By definition, the activity that SoundCare conducted when it examined its strengths, weaknesses, and capabilities is known as

• A. An environmental analysis
• B. An internal assessment
• C. An environmental forecast
• D. A community analysis

Answer: B

NEW QUESTION 12
Some health plans qualify as tax-exempt organizations under Sections 501(c)(3) and 501(c)(4) of the Internal Revenue Code. One true statement regarding a health plan that qualifies as a 501(c)(4) social welfare organization, in comparison to a health plan that qualifies as a 501(c)(3) charitable organization, is that a

• A. 501(c)(4) social welfare organization is allowed to distribute profits for the benefit of individuals,whereas a 501(c)(3) charitable organization can use surplus only for the benefit of the organization, the community, or a charity
• B. 501(c)(4) social welfare organization can raise operating funds through the sale of tax-exempt bonds, whereas a 501(c)(3) charitable organization does not have this advantage
• C. 501(c)(4) social welfare organization has less flexibility in determining use of funds for social or political activities than does a 501(c)(3) charitable organization
• D. 501(c)(4) exemption is easier to obtain than a 501(c)(3) exemption, because 501(c)(4) social welfare organizations are allowed to benefit a comparatively smaller group of individuals

Answer: D

NEW QUESTION 13
Antitrust laws can affect the formation, merger activities, or acquisition initiatives of a health plan. In the United States, the two federal agencies that have the primary responsibility for enforcing antitrust laws are the

• A. Internal Revenue Service (IRS) and the Department of Justice (DOJ)
• B. Office of Inspector General (OIG) and the Department of Defense (DOD)
• C. Federal Trade Commission (FTC) and the Department of Labor (DOL)
• D. Federal Trade Commission (FTC) and the Department of Justice (DOJ)

Answer: D

NEW QUESTION 14
Congress enacted three clauses relating to the preemptive effect of the Employee Retirement Income Security Act of 1974 (ERISA). One of these clauses preserves from ERISA preemption any state law that regulates insurance, banking, or securities, with the exception of the exemption for self-funded employee benefit plans. This clause is called the

• A. Savings clause
• B. Preemption clause
• C. Deemer clause
• D. De novo clause

Answer: A

Explanation:
The savings clause preserves from preemption any state law that regulates insurance, banking or securities except as provided by the deemer clause.

NEW QUESTION 15
While traditional workers' compensation laws have restricted the use of managed care techniques, many states now allow managed workers' compensation. One common characteristic of managed workers' compensation plans is that they

• A. Discourage injured employees from returning to work until they are able to assume all the duties of their jobs
• B. Use low copayments to encourage employees to choose preferred providers
• C. Cover an employee's medical costs, but they do not provide coverage for lost wages
• D. Rely on total disability management to control indemnity benefits

Answer: D

NEW QUESTION 16
The following statements are about various provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Three of the statements are true and one statement is false. Select the answer choice that contains the FALSE statement.

• A. HIPAA permits group health plans that offer coverage through an HMO to impose affiliation periods during which no benefits or services are provided to a plan member.
• B. HIPAA created a new category of federal healthcare crimes, called federal healthcare offenses that apply to private healthcare plans as well as to federally funded healthcare programs.
• C. One effect of Section 231(h) of HIPAA, which amended the Social Security Act, has been to permit health plans with Medicare contracts to provide enrollees with value-added services such as discounted memberships to health clubs.
• D. HIPAA provides that any fines and penalties recovered through regulatory proceedings to enforce the federal fraud and abuse statutes will be turned over to enforcement agencies to conduct additional investigations.

Answer: C

NEW QUESTION 17
Brighton Health Systems, Inc., a health plan, wants to modify its advertising and marketing materials to avoid liability risk under the principle of ostensible agency. One step that Brighton can take to reduce the likelihood of being liable for provider negligence under the theory of ostensible agency is to

• A. Guarantee the quality of medical care provided to Brighton members
• B. Use advertising materials which state that Brighton itself provides healthcare
• C. Add disclaimers to advertising materials indicating that only physicians and not Brighton make medical decisions
• D. Use advertising materials to characterize Brighton's role as providing physicians, hospitals, and other healthcare professionals rather than arranging for healthcare.

Answer: C

NEW QUESTION 18
Determine whether the following statement is true or false:
Although most-favored-nation (MFN) clauses in contracts between health plans and healthcare providers are not per se illegal, they should be reviewed under the rule of reason analysis for antitrust purposes.

• A. True, because the Federal Trade Commission (FTC) ruled that MFN clauses are not per se illegal and the FTC encourages health plans to include them in provider contracts.
• B. True, because although MFN clauses are not per se illegal, they violate antitrust laws if they have a predatory purpose and an anticompetitive effect.
• C. False, because MFN clauses involve decisions by providers concerning the level of fees to charge, and thus they are per se illegal.
• D. False, because MFN clauses are not per se illegal, and thus they are exempt from antitrust laws and regulation by the FTC.

Answer: B

NEW QUESTION 19
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