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Exam Code:
AHM-510Exam Name: Governance and Regulation
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NO.1 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
Answer: C
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NO.2
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
Answer:
D
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NO.3 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.
In order to become the type of company that is owned by people
who purchase shares of the
company's stock, Tidewater must undergo a process
known as
A. management buy-out
B. piercing the corporate veil
C.
demutualization
D. mutualization
Answer: C
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NO.4 The
Balanced Budget Act (BBA) of 1997 created the Medicare+Choice plan. One
provision of the
BBA under Medicare+Choice is that the BBA
A. Requires
health plans to qualify as either a competitive medical plan (CMP) or a
federally qualified
HMO in order to participate in the Medicare program
B.
Eliminates funding for demonstration projects such as the Medicare Enrollment
Demonstration
Project
C. Narrows the geographic variations in payments to
Medicare health plans by lowering the growth
rate of payments in high-payment
counties and raising the rates in low-payment counties
D. Increases Graduate
Medical Education (GME) payments to hospitals for the training and cost
of
educating and training residents
Answer:
C
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NO.5 Health plans are allowed to
appeal rules or regulations that affect them. Generally, the grounds
for such
appeals are limited either to procedural grounds or jurisdictional grounds. The
Kabyle Health
Plan appealed the following new regulations:
Appeal 1 -
Kabyle objected to this regulation on the ground that this regulation is
inconsistent with
the law.
Appeal 2 - Kabyle objected to this regulation
because it believed that the subject matter was outside
the realm of issues
that are legal for inclusion in the regulatory agency's regulations.
Appeal 3
- Kabyle objected to the process by which this regulation was adopted.
Of
these appeals, the ones that Kabyle appealed on jurisdictional grounds
were
A. Appeals 1, 2, and 3
B. Appeals 1 and 2 only
C. Appeals 1 and 3
only
D. Appeals 2 and 3 only
Answer: B
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NO.6 Third party administrators (TPAs) provide various
administrative services to health plans or
groups that provide health benefit
plans to their employees or members. Many state laws that
regulate TPAs are
based on the NAIC Third Party Administrator Model Statute. One provision of
the
TPA Model Law is that it
A. Prohibits TPAs from performing insurance
functions such as underwriting and claims processing
B. Prohibits TPAs from
entering into an agreement under which the amount of the TPA's
compensation
is based on the amount of premium or charges the TPA collects
C. Requires
TPAs, upon the termination of a TPA agreement with a group, to immediately
transfer all
its records relating to the group to the new administrator
D.
Requires TPAs to notify the state insurance department immediately following any
material
change in the TPA's ownership or control
Answer:
D
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NO.7 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
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NO.8 Regulators
of health plans have set standards in a number of areas of plan
operations.
Requirements with which health plans must comply typically
include
A. providing enrollees and prospective enrollees with detailed
information about various aspects of
health plan policies and
operations
B. maintaining internal grievance and appeals processes to resolve
enrollee complaints against the
organization
C. maintaining quality
assurance programs that reflect the plan's activities in monitoring
quality
D. all of the above
Answer: D
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