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:

1. A. Corporate risk management
2. B. An ombudsman program
3. C. An ethics committee
4. D. Arbitration

Correct Answer: D

Regulators of health plans have set standards in a number of areas of plan operations. Requirements with which health plans must comply typically include

1. A. providing enrollees and prospective enrollees with detailed information about various aspects of health plan policies and operations
2. B. maintaining internal grievance and appeals processes to resolve enrollee complaints against the organization
3. C. maintaining quality assurance programs that reflect the plan's activities in monitoring quality
4. D. all of the above

Correct Answer: D

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 creating Diversified, Tidewater formed the type of company known as

1. A. A mutual holding company
2. B. A spin-off company
3. C. An upstream holding company
4. D. A downstream holding company

Correct Answer: D

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

1. A. State A mandates that health plans provide benefits for experimental drugs for the treatment of terminal diseases such as AIDS and cancer.
2. B. State B mandates that health plans have a procedure in place to allow a patient to have a nonformulary drug covered under certain conditions.
3. C. State C mandates that, in dispensing generic drugs, pharmacies must label drug containers with the name of the substituted generic medication.
4. D. State D mandates that health plans provide benefits for the treatment of one form of cancerwith specific drugs that had originally been approved by the Food and Drug Administration (FDA) to treat other forms of cancer.

Correct Answer: D

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

1. 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
2. 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
3. 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
4. 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