- (Topic 1)
Federal law addresses the relationship between Medicare- or Medicaidcontracting health plans and providers who are at "substantial financial risk."
Under federal law, Medicare- or Medicaid-contracting health plans

1. A. Place a provider at "substantial risk" whenever incentive arrangements put the provider at risk for amounts in excess of 10% of his or her total potential reimbursement for providing services to Medicare and Medicaid enrollees
2. B. Must provide stop-loss coverage to a provider who is placed at "substantial financial risk" for services that the provider does not directly provide to Medicare or Medicaid enrollees
3. C. Both A and B
4. D. A only
5. E. B only
6. F. Neither A nor B

Correct Answer: C

- (Topic 1)
For each of its products, the Wisteria Health Plan monitors the provider reimbursement trend and the residual trend. One true statement about these trends is that

1. A. The provider reimbursement trend probably is more difficult for Wisteria to quantify than is the residual trend
2. B. Wisteria's residual trend is the difference between the total trend and the portion of the total trend caused by changes in Wisteria's provider reimbursement levels
3. C. The residual trend most likely has more impact on Wisteria's total trend than does the provider reimbursement trend
4. D. An example of a residual trend would be a 5% increase in the capitation rate paid to a PCP by Wisteria

Correct Answer: B

- (Topic 1)
Experience rating methods can be either prospective or retrospective. With regard to these types of experience rating methods, it can correctly be stated that

1. A. A health plan typically can expect much higher profit levels from using retrospective experience rating rather than prospective experience rating a health plan using prospective experience rating is more likely than a
2. B. Health plan using retrospective experience rating to have to pay an experience rating dividend if a group's experience has been better than expected during the rating period
3. C. The premium determined under retrospective experience rating is usually higher than the premium under prospective experience rating
4. D. Most states require HMOs to use retrospective experience rating rather than prospective experience rating

Correct Answer: C

- (Topic 1)
The following statements are about risk management in health plans. Select the answer choice containing the correct response.

1. A. Risk management is especially important to health plans because the Employee Retirement Income Security Act of 1974 (ERISA) allows plan members to recover punitive damages from healthcare plans.
2. B. With regard to the relative risk for health plan structures based upon the degree of influence and relationships that health plans maintain with their providers, preferred provider organizations (PPOs) typically have a higher risk than do group HMOs and staff HMOs.
3. C. Although there are clear risks associated with the provision of healthcare services and coverage decisions surrounding that care, the bulk of risk in health plans is associated with a health plan's benefit administration and contracting activities.
4. D. A health plan generally structures its risk management process around loss reduction techniques and loss transfer techniques.

Correct Answer: D

- (Topic 1)
One law prohibits Dr. Laura Cole from making a referral to another provider entity for designated health services if Dr. Cole or one of her immediate family members has a financial relationship with the entity. This law is known as the

1. A. safe harbor law
2. B. upper payment limit law
3. C. anti-kickback law
4. D. physician self-referral law

Correct Answer: D