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AHM-510 – Governance and Regulation

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Showing 4–6 of 10 questions

Question 4

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

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    Prohibits TPAs from performing insurance functions such as underwriting and claims processing

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    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
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    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
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    Requires TPAs to notify the state insurance department immediately following any material change in the TPA's ownership or control
Question 5

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 the NAIC 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

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    Invitation to contract, and it discloses a policy provision known as an exception
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    Invitation to contract, and it discloses a policy provision known as a reduction
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    Invitation to inquire, and it discloses a policy provision known as an exception
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    Invitation to inquire, and it discloses a policy provision known as a reduction
Question 6

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

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