- (Topic 1)
A stop-loss contract may provide that claims are settled using a paid claims method or an incurred claims method. The Concord Company provides health coverage to its employees through a self-funded health plan. On March 17, a Concord employee who is enrolled in this plan underwent surgery, and the surgery was sufficiently expensive to trigger Concord's specific stop-loss coverage. On April 10, Concord paid the medical expenses associated with the surgery. The term of the stop-loss contract ended on April 1. This information indicates that the stop-loss carrier is responsible for paying a portion of the cost of the surgery under

1. A. both the paid claims method and the incurred claims method
2. B. the paid claims method but not the incurred claims method
3. C. the incurred claims method but not the paid claims method
4. D. neither the paid claims method nor the incurred claims method

Correct Answer: C

- (Topic 1)
Under the alternative funding method used by the Trilogy Company, the insurer charges Trilogy an initial premium that is based on the assumption that claims will be 93% of the expected claims for the year. If claims exceed 93% of expected claims, then Trilogy must reimburse the insurer for any additional claims paid, up to 112% of expected claims. The insurer bears the responsibility for paying claims in excess of 112% of expected claims.
From the following answer choices, choose the name of the alternative funding method
described.

1. A. Retrospective-rating arrangement
2. B. Premium-delay arrangement
3. C. Reserve-reduction arrangement
4. D. Minimum-premium plan

Correct Answer: A

- (Topic 1)
The Cardinal health plan complies with all of the provisions of HIPAA.
Cardinal has received requests for healthcare coverage from the following companies that meet the statutory definition of a small group:
✑ The Xavier Company has excellent claims experience
✑ The Youngblood Company has not previously offered group healthcare coverage to its employees
✑ The Zebulon Company has poor claims experience
According to HIPAA's provisions, Cardinal must issue a healthcare contract to

1. A. Xavier, Youngblood, and Zebulon
2. B. Xavier and Youngblood only
3. C. Xavier only
4. D. None of these companies

Correct Answer: A

- (Topic 1)
Rasheed Azari, the risk manager for the Tower health plan, is attempting to work with providers in the organization in order to reduce the providers' exposure related to utilization review. Mr. Azari is considering advising the providers to take the following actions:
✑ 1-Allow Tower's utilization management decisions to override a physician's independent medical judgment
✑ 2-Support the development of a system that can quickly render a second opinion
in case of disagreement surrounding clinical judgment
✑ 3-Inform a patient of any issues that are being disputed relative to a physician's recommended treatment plan and Tower's coverage decision
Of these possible actions, the ones that are likely to reduce physicians' exposures related to utilization review include actions

1. A. 1, 2, and 3
2. B. 1 and 2 only
3. C. 1 and 3 only
4. D. 2 and 3 only

Correct Answer: D

- (Topic 2)
The Danner Bank loaned money to the CareWell Health Plan to fund an expansion of a healthcare facility. With respect to the type of financial information user Danner represents to CareWell, it is correct to say that Danner is an:

1. A. Internal user with a direct financial interest
2. B. Internal user with an indirect financial interest
3. C. External user with a direct financial interest
4. D. Case-mix adjustment

Correct Answer: C