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AHM-520 – Health Plan Finance and Risk Management

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Showing 13–15 of 15 questions

Question 13 (Volume B)

Health plans with risk-based Medicare contracts are required to calculate and submit to CMS a Medicare adjusted community rate (Medicare ACR). Medicare ACR can be defined as the:

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    Estimated cost of providing services to a beneficiary under Medicare FFS, adjusted for factors such as age and gender
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    Health plan’s estimate of the premium it would charge Medicare enrollees in the absence of Medicare payments to the health plan
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    Average amount the health plan expects to receive from CMS per beneficiary covered
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    Health plan’s actual costs of providing benefits to Medicare enrollees in a given year
Question 14 (Volume A)

The following statements are about federal laws and regulations which affect health plans that offer products and services to the employer group market. Select the answer choice containing the correct statement.

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    Amendments to the HMO Act of 1973 require federally qualified HMOs to adjust a group's prior premiums on the basis of the group's experience during the prior rating period.
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    The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 requires that, if a plan sponsor elects to terminate its group coverage with a health plan, then the health plan must continue its coverage for the COBRA-qualified beneficiaries in the group.
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    The Health Insurance Portability and Accountability Act (HIPAA) of 1996 generally requires the guaranteed renewal of healthcare coverage for certain individuals and for both small and large groups, regardless of the health status of any member.
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    The Mental Health Parity Act (MHPA) of 1996 mandates that all health plans must offer benefits for mental healthcare.
Question 15 (Volume A)

The Fiesta Health Plan prices its products in such a way that the rates for its products are reasonable, adequate, equitable, and competitive. Fiesta is using blended rating to calculate a premium rate for the Murdock Company, a large employer. Fiesta has assigned a credibility factor of 0.6 to Murdock. Fiesta has also determined that Murdock's manual rate is $200 PMPM and that Murdock's experience rate is $180 PMPM.

According to regulations, Fiesta's premium rates are reasonable if they

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    vary only on the factors that affect Fiesta's costs
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    are at a level that balances Fiesta's need to generate a profit against its need to obtain or retain a specified share of the market in which it conducts business
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    are high enough to ensure that Fiesta has enough money on hand to pay operating expenses as they come due
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    do not exceed what Fiesta needs to cover its costs and provide the plan with a fair profit