AHM-510 Online Practice Questions and Answers

In the paragraph below, a statement contains two pairs of terms enclosed in parentheses. Determine which term in each pair correctly completes the statement. Then select the answer choice containing the two terms that you have chosen.

One type of acquisition is called a stock purchase. In a typical stock purchase, a company acquires (51% / 100%) of the voting shares of another company's stock, thereby making the acquired company a subsidiary. The (acquired / acquiring) company holds all of the assets and liabilities of the acquired company.

A. 51% / acquired

B. 51% / acquiring

C. 100% / acquired

D. 100% / acquiring

Arthur Dace, a plan member of the Bloom Health Plan, tried repeatedly over an extended period to schedule an appointment with Dr. Pyle, his primary care physician (PCP). Mr. Dace informally surveyed other Bloom plan members and found that many people were experiencing similar problems getting an appointment with this particular provider. Mr. Dace threatened to take legal action against Bloom, alleging that the health plan had deliberately allowed a large number of patients to select Dr. Pyle as their PCP, thus making it difficult for patients to make appointments with Dr. Pyle. Bloom recommended, and Mr. Dace agreed to use, an alternative dispute resolution (ADR) method that is quicker and less expensive than litigation. Under this ADR method, both Bloom and Mr. Dace presented their evidence to a panel of medical and legal experts, who issued a decision that Bloom's utilization management practices in this case did not constitute a form of abuse. The panel's decision is legally binding on both parties.

This information indicates that Bloom resolved its dispute with Mr. Dace by using an ADR method known as:

A. Corporate risk management

B. An ombudsman program

C. An ethics committee

D. Arbitration

The government uses various tools within the realm of two broad categories of public policy-allocative policies and regulatory policies. In the context of public policy, laws that fall into the category of allocative policy include

A. The Balanced Budget Act (BBA) of 1997

B. The Health Insurance Portability and Accountability Act (HIPAA) of 1996

C. Laws affecting health plan quality oversight

D. Laws specifying procedures for health plan handling of consumer appeals and grievances

The Sawgrass Health Center is an institution that trains healthcare professionals and performs various clinical and other types of healthcare-related research. Because Sawgrass receives government funding, it is required to provide medical care for the poor. Of the following types of health plans, Sawgrass can best be described as:

A. A medical foundation

B. An academic medical center (AMC)

C. A healthcare cooperative

D. A community health center (CHC)

The Tidewater Life and Health Insurance Company is owned by its policy owners, who are entitled to certain rights as owners of the company, and it issues both participating and nonparticipating insurance policies. Tidewater is considering converting to the type of company that is owned by individuals who purchase shares of the company's stock. Tidewater is incorporated under the laws of Illinois, but it conducts business in the Canadian provinces of Ontario and Manitoba. Tidewater established the Diversified Corporation, which then acquired various subsidiary firms that produce unrelated products and services. Tidewater remains an independent corporation and continues to own Diversified and the subsidiaries. In order to create and maintain a common vision and goals among the subsidiaries, the management of Diversified makes decisions about strategic planning and budgeting for each of the businesses.

Tidewater's participating policy owners have the right to

A. Elect the board of directors on the basis of one vote per policy owner

B. Elect the board of directors on the basis of one vote for each policy a person owns

C. Participate in developing a corporate mission statement and strategic plans

D. Receive stock dividends for each policy they own

In 1994, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) revised their 1993 healthcare-specific antitrust guidelines to include analytical principles relating to multiprovider networks. Under the new guidelines, the regulatory agencies will use the rule ofreason to analyze joint pricing activities by competitors in physician or multiprovider networks only if

A. Provider integration under the network is likely to produce significant efficiencies that benefit consumers

B. The providers in a network share substantial financial risk

C. The combining of providers into a joint venture enables the providers to offer a new product

D. All of the above

The Nonprofit Institutions Act allows the Neighbor Hospital, a not-for-profit hospital, to purchase at a discount drugs for its 'own use'. Consider whether the following sales of drugs were not for Neighbor's own use and therefore were subject to antitrust enforcement:

Elijah Jamison, a former patient of Neighbor, renewed a prescription that was originally dispensed when he was discharged from Neighbor.

Neighbor filled a prescription for Camille Raynaud, who has no connection to Neighbor other than that her prescribing physician is located in a nearby physician's office building.

Neighbor filled a prescription for Nigel Dixon, who is a friend of a Neighbor medical staff member.

With respect to the United States Supreme Court's definition of 'own use,' the drug sales that were not for Neighbor's own use were the sales that Neighbor made to

A. Mr. Jamison, Ms. Raynaud, and Mr. Dixon

B. Mr. Jamison and Ms. Raynaud only

C. Mr. Dixon only

D. None of these individuals

SoundCare Health Services, an MCO, 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

There are several exceptions to the Ethics in Patient Referrals Act and its amendments (the Stark laws), which prohibit a physician from referring Medicare or Medicaid patients for certain designated services or supplies provided by entities in which the physician has a financial interest. Consider whether the situations described below qualify as exceptions to the Stark laws:

Situation A: Dr. Wong is a physician in the Marvel Health Plan's provider network and has a financial relationship with Marvel arising from the health plan's compensation for his services. Marvel is not a prepaid health plan.

Situation B: Dr. Ryder is a physician in the provider network of the Glen Health Plan, which is not a prepaid health plan. In situations of medical necessity, Dr. Ryder refers Glen patients to a physical therapy clinic that leases office space from him.

Situation C: Dr. Yost has a compensation arrangement with a health plan for providing health services under the Medicare+Choice program.

An arrangement that is exempt from the Stark laws is described in

A. All of these situations

B. Situations A and C only

C. Situation B only

D. Situation C only

Indigo Health Plan advertised a specific individual health insurance policy through a direct mail advertisement that provided detailed information about the product. In order to comply with theNAIC Model Rules Governing Advertisements of Accident and Sickness Insurance, Indigo must disclose whether the advertised policy contains any exceptions, reductions, or limitations. Thus, Indigo disclosed in the advertisement that one policy provision limits coverage for dental exams to $50 per exam and to one exam per calendar year. This information indicates that, with respect to the definitions in the NAIC Model Rules, Indigo's advertisement is an example of an

A. Invitation to contract, and it discloses a policy provision known as an exception

B. Invitation to contract, and it discloses a policy provision known as a reduction

C. Invitation to inquire, and it discloses a policy provision known as an exception

D. Invitation to inquire, and it discloses a policy provision known as a reduction