- (Topic 1)
Most organizations that obtain group healthcare coverage can be classified as one of three types of groups: employer-employee groups, multiple employer groups, and professional associations. One true statement about these types of groups is that

1. A. Anti selection risk is higher for both multiple-employer groups and professional associations than it is for an employer-employee group
2. B. Private employers typically present a higher underwriting risk to health plans than do public employers
3. C. Individual members of a multiple-employer group or a professional association typically are required to obtain healthcare coverage through the group or association
4. D. I health plan is prohibited, when evaluating the risks represented by a professional association, from considering the industry experience of the agent or broker that sells a group plan to the association

Correct Answer: A

- (Topic 2)
The following information relates to the Hardcastle Health Plan for the month of June:
✑ Incurred claims (paid and IBNR) equal $100,000
✑ Earned premiums equal $120,000
✑ Paid claims, excluding IBNR, equal $80,000
✑ Total health plan expenses equal $300,000
This information indicates that Hardcastle’s medical loss ratio (MLR) for the month of June was approximately equal to:

1. A. 40%
2. B. 67%
3. C. 83%
4. D. 120%

Correct Answer: C

- (Topic 2)
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:

1. A. Estimated cost of providing services to a beneficiary under Medicare FFS, adjusted for factors such as age and gender
2. B. Health plan’s estimate of the premium it would charge Medicare enrollees in the absence of Medicare payments to the health plan
3. C. Average amount the health plan expects to receive from CMS per beneficiary covered
4. D. Health plan’s actual costs of providing benefits to Medicare enrollees in a given year

Correct Answer: B

- (Topic 2)
The amount of risk for health plan products is dependent on the degree of influence and the relationships that the health plan maintains with its providers. Consider the following types of managed care structures:
✑ Preferred provider organization (PPO)
✑ Group model HMO
✑ Staff model health maintenance organization (HMO)
✑ Traditional health insurance
Of these health plan products, the one that would most likely expose a health plan to the highest risk is the:

1. A. preferred provider organization (PPO)
2. B. group model HMO
3. C. staff model health maintenance organization (HMO)
4. D. traditional health insurance

Correct Answer: C

- (Topic 2)
In a fee-for-service (FFS) reimbursement method, providers are paid per treatment or per service that they provide. One typical benefit of FFS reimbursement is that it:

1. A. Is highly effective in preventing excessive services that take the form of churning, unbundling, and upcoding
2. B. Provides physicians who attempt to control costs with a higher rate of compensation than is provided to physicians who make the effort to control costs
3. C. Is relatively easy to initiate, especially in markets where managed care penetration is low
4. D. Guards against the practice of defensive medicine

Correct Answer: B