AHM-510 Online Practice Questions and Answers

The Surrey Medical Supply Company was formed as a limited partnership. In this partnership, Victoria Lewin is one of the limited partners and Oscar Gould is a general partner. This information indicates that, with respect to the typical characteristics of limited partnerships,

A. Ms. Lewin has more freedom to opt out of the partnership than does Mr. Gould

B. Ms. Lewin has more liability for the debts of Surrey than does Mr. Gould

C. both Ms. Lewin and Mr. Gould participate in the day-to-day management of Surrey

D. the partnership will continue upon the death of Mr. Gould, whereas it will end with the death of Ms. Lewin

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

The Wentworth Corporation uses a self-funded plan to provide its employees with healthcare benefits. One consequence of Wentworth's approach to providing healthcare benefits is that self-funding

A. Requires that Wentworth self-administer its healthcare benefit plan

B. Requires that Wentworth pay higher state premium taxes than do insurers and health plans

C. Eliminates the need for Wentworth to pay a risk charge to an insurer or health plan

D. Increases the number of benefit and rating mandates that apply to Wentworth's plan

Health plans typically divide their costs into medical and administrative expenses. Examples of medical expenses are.

A. Equipment costs

B. Salaries and benefits for executives and for all functional areas

C. Sales and marketing costs

D. Payments to providers for the delivery of healthcare

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.

With regard to the state in which Tidewater is domiciled, it is correct to say that, from the perspective of both Ontario and Manitoba, Tidewater is considered to be the type of corporation known as:

A. A foreign corporation

B. An alien corporation

C. A sister corporation

D. A domestic corporation

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

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

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 providernetwork. 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.

From the following answer choices, select the response that identifies the type of market conduct examination that is being performed on Greenpath and the frequency with which the HMO Model Act requires state insurance departments to conduct an examination of an HMO's operations.

A. Type of examination: comprehensive; Required frequency: annually

B. Type of examination: comprehensive; Required frequency: at least every three years

C. Type of examination: target; Required frequency: annually

D. Type of examination: target; Required frequency: at least every three years

The board of directors of the Garnet Health Plan, an integrated delivery system (IDS), includes physicians and hospital representatives who sometimes feel compelled to represent a specific organization that is only one part of the IDS. Such a circumstance can lead to ___________, which is a situation in which the members of the board focus on the best interests of component parts of the enterprise rather than on the best interests of Garnet as a whole.

A. An enterprise-focused board

B. Representational governance

C. Enterprise liability

D. Boundary spanning

In the course of doing business, health plans conduct basic corporate transactions. For example, when a health plan engages in the corporate transaction known as aggressive sourcing, the health plan

A. Chooses to contract with vendors who provide specific functions that would otherwise be performed in-house, such as paying claims

B. Seeks to obtain the best deals from various vendors for equipment, supplies, and services such as telephones, overnight mail, computer hardware and software, and copy machines

C. Merges with one or more companies to form an entirely new company

D. Joins with one or more companies, but retains its autonomy and relies on the other companies to perform specific functions