AHIP AHIP Certification AHM-510 Questions & Answers

• Question 41:

  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

  Correct Answer: B

• Question 42:

  The Westchester Health Plan is using a pricing strategy that involves setting a low price in a highly price-sensitive market to stimulate revenue growth. In following this strategy, Westchester is sacrificing short-term profits for fast growth in selected markets. This information indicates that Westchester is following the pricing strategy known as

  A. Market skimming

  B. Buying market share

  C. Price skimming

  D. Unitary pricing

  Correct Answer: B

• Question 43:

  The following statements describe various state benefit mandates. Select the answer choice that describes a state law pertaining to off-label uses for drugs.

  A. State A mandates that health plans provide benefits for experimental drugs for the treatment of terminal diseases such as AIDS and cancer.

  B. State B mandates that health plans have a procedure in place to allow a patient to have a non-formulary drug covered under certain conditions.

  C. State C mandates that, in dispensing generic drugs, pharmacies must label drug containers with the name of the substituted generic medication.

  D. State D mandates that health plans provide benefits for the treatment of one form of cancer with specific drugs that had originally been approved by the Food and Drug Administration (FDA) to treat other forms of cancer.

  Correct Answer: D

• Question 44:

  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

  Correct Answer: B

• Question 45:

  The following statements appear in the Twilight Health Plan's strategic plan:

  Increase the percentage of preventive health interventions for total eligible membership during each of the next three calendar years for the following services: mammography, Pap smears, immunizations, and first trimester visits for prenatal mothers

  Improve customer satisfaction on an annual basis for each of the next three calendar years, as measured by satisfaction surveys for members, providers, and employer groups

  Increase by 30% the number of claims processed by the automated claim payment system and reduce by 10% the cost of paying claims during the next three years

  These statements are examples of Twilight's

  A. Corporate objectives

  B. Company mission

  C. Company vision

  D. Corporate strategies

  Correct Answer: A

• Question 46:

  Health plans should monitor changes in the environment and emerging trends, because changes in society will affect the managed care industry. One true statement regarding recent changes in the environment in which health plans operate is that

  A. Women as a group receive more healthcare and interact more often with health plans than do men over the course of a lifetime

  B. The focus of healthcare during the past decade has shifted away from outpatient care to inpatient hospital treatment

  C. The uninsured population in the United States has been decreasing in recent years

  D. The decline in overall inflation in the 1990s failed to slow the growth in healthcare inflation

  Correct Answer: A

• Question 47:

  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)

  Correct Answer: B

• Question 48:

  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

  Correct Answer: D

• Question 49:

  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

  Correct Answer: C

• Question 50:

  In developing its corporate strategies, the Haven Health Plan decided to implement a growth strategy that is focused on increasing the percentage of preventive health office visits from its current plan members. To accomplish this objective,

  Haven will send a direct mail kit to existing plan members to remind them of the variety of preventive health services that Haven currently offers, including physical exams, cholesterol tests, and mammograms.

  This information illustrates Haven's use of

  A. An intensive growth strategy known as market penetration

  B. An integrated growth strategy known as product development

  C. An integrated growth strategy known as market development

  D. A diversified growth strategy known as market penetration

  Correct Answer: A