Exam Code: AHM-510 (Practice Exam Latest Test Questions VCE PDF)
Exam Name: Governance and Regulation
Certification Provider: AHIP
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NEW QUESTION 1
Determine whether the following statement is true or false:
Although most-favored-nation (MFN) clauses in contracts between health plans and healthcare providers are not per se illegal, they should be reviewed under the rule of reason analysis for antitrust purposes.

  • A. True, because the Federal Trade Commission (FTC) ruled that MFN clauses are not per se illegal and the FTC encourages health plans to include them in provider contracts.
  • B. True, because although MFN clauses are not per se illegal, they violate antitrust laws if they have a predatory purpose and an anticompetitive effect.
  • C. False, because MFN clauses involve decisions by providers concerning the level of fees to charge, and thus they are per se illegal.
  • D. False, because MFN clauses are not per se illegal, and thus they are exempt from antitrust laws and regulation by the FTC.

Answer: B

NEW QUESTION 2
SoundCare Health Services, a health plan, recently conducted a situation analysis. One step in this analysis required SoundCare to examine its current activities, its strengths and weaknesses, and its ability to respond to potential threats and opportunities in the environment. This activity provided SoundCare with a realistic appraisal of its capabilities. One weakness that SoundCare identified during this process was that it lacked an effective program for preventing and detecting violations of law. SoundCare decided to remedy this weakness by using the 1991 Federal Sentencing Guidelines for Organizations as a model for its compliance program.
With respect to the Federal Sentencing Guidelines, actions that SoundCare should take in developing its compliance program include

  • A. Creating a system through which employees and other agents can report suspected misconduct without fear of retribution
  • B. Holding management accountable for the misconduct of their subordinates
  • C. Assigning a high-level member of management to the position of compliance coordinator or administrator
  • D. All of the above

Answer: D

NEW QUESTION 3
One federal law amended the Social Security Act to allow states to set their own qualification standards for HMOs that contracted with state Medicaid programs and revised the requirement that participating HMOs have an enrollment mix of no more than 50% combined Medicare and Medicaid members.
This act, which was the true stimulus for increasing participation by health plans in Medicaid, is called the

  • A. Omnibus Budget Reconciliation Act of 1981 (OBRA-81)
  • B. Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)
  • C. Employee Retirement Income Security Act of 1974 (ERISA)
  • D. Federal Employees Health Benefits Act of 1958 (FEHB Act)

Answer: A

NEW QUESTION 4
The Department of Health and Human Services (HHS) has delegated its responsibility for development and oversight of regulations under the Health Insurance Portability and Accountability Act (HIPAA) to an office within the Centers for Medicaid & Medicare Services (CMS). The CMS office that is responsible for enforcing the federal requirements of HIPAA is the

  • A. Center for Health Plans and Providers (CHPPs)
  • B. Center for Medicaid and State Operations
  • C. Center for Beneficiary Services
  • D. Center for Managed Care

Answer: B

NEW QUESTION 5
In examining accountability in the current managed care environment, one is likely to find that combinations of various models of accountability are in operation. Under one model of accountability, the primary mechanisms for accountability are the mechanisms of the marketplace- failure to meet standards will result in a loss of demand for services. By definition, this model of accountability is called the

  • A. Professional model of accountability
  • B. Political model of accountability
  • C. Due diligence model of accountability
  • D. Economic model of accountability

Answer: D

NEW QUESTION 6
Congress enacted three clauses relating to the preemptive effect of the Employee Retirement Income Security Act of 1974 (ERISA). One of these clauses preserves from ERISA preemption any state law that regulates insurance, banking, or securities, with the exception of the exemption for self-funded employee benefit plans. This clause is called the

  • A. Savings clause
  • B. Preemption clause
  • C. Deemer clause
  • D. De novo clause

Answer: A

Explanation:
The savings clause preserves from preemption any state law that regulates insurance, banking or securities except as provided by the deemer clause.

NEW QUESTION 7
The following statements are about market conduct examinations of health plans. Select the answer choice that contains the correct statement.

  • A. Multistate examinations are not appropriate for financial examinations, because regulatory requirements concerning a health plan's financial condition tend to vary from state to state.
  • B. Market conduct examinations of a health plan's advertising and sales materials include comparing the advertising materials to the policies they advertise.
  • C. Once an examination report is provided to the state insurance department, a health plan is not given an opportunity to present a formal objection to the report.
  • D. In imposing sanctions on health plans, state insurance departments are required to follow federal sentencing guidelines.

Answer: B

NEW QUESTION 8
SoundCare Health Services, an MCO, recently conducted a situation analysis. One step in this analysis required SoundCare to examine its current activities, its strengths and weaknesses, and its ability to respond to potential threats and opportunities in the environment. This activity
provided SoundCare with a realistic appraisal of its capabilities. One weakness that SoundCare identified during this process was that it lacked an effective program for preventing and detecting violations of law. SoundCare decided to remedy this weakness by using the 1991 Federal Sentencing Guidelines for Organizations as a model for its compliance program.
By definition, the activity that SoundCare conducted when it examined its strengths, weaknesses, and capabilities is known as

  • A. An environmental analysis
  • B. An internal assessment
  • C. An environmental forecast
  • D. A community analysis

Answer: B

NEW QUESTION 9
Certificate of need (CON) laws apply to health plans in a variety of ways, depending upon the state. By definition, CON laws are laws that are designed to

  • A. Regulate the construction, renovation, and acquisition of healthcare facilities as well as the purchase of major medical equipment in a geographical area
  • B. Protect commerce from unlawful restraint of trade, price discrimination, price fixing, reduced competition, and monopolies
  • C. Determine benefit payments when a person is covered by more than one plan, such as two group health plans
  • D. License and regulate health plans that wish to establish and operate an HMO

Answer: A

NEW QUESTION 10
A federal law that significantly affects health plans is the Health Insurance Portability and Accountability Act of 1996 (HIPAA). In order to comply with HIPAA provisions, issuers offering group health coverage generally must.

  • A. Renew group health policies in both small and large group markets, regardless of the health status of any group member
  • B. Provide a plan member with a certificate of creditable coverage at the time the member enrolls in the group plan
  • C. Both A and B
  • D. A only
  • E. B only
  • F. Neither A nor B

Answer: B

NEW QUESTION 11
Solvency standards for Medicare provider-sponsored organizations (PSOs) are divided into three parts: (1) the initial stage, (2) the ongoing stage, and (3) insolvency. In the initial stage, prior to CMS approval, a Medicare PSO typically must have a minimum net worth of

  • A. $750,000
  • B. $1,000,000
  • C. $1,500,000
  • D. $2,000,000

Answer: C

NEW QUESTION 12
The Nonprofit Institutions Act allows the Neighbor Hospital, a not-for-profit hospital, to purchase at a discount drugs for its 'own use'. Consider whether the following sales of drugs were not for Neighbor's own use and therefore were subject to antitrust enforcement:
Elijah Jamison, a former patient of Neighbor, renewed a prescription that was originally dispensed when he was discharged from Neighbor.
Neighbor filled a prescription for Camille Raynaud, who has no connection to Neighbor other than that her prescribing physician is located in a nearby physician's office building.
Neighbor filled a prescription for Nigel Dixon, who is a friend of a Neighbor medical staff member. With respect to the United States Supreme Court's definition of 'own use,' the drug sales that were not for Neighbor's own use were the sales that Neighbor made to

  • A. M
  • B. Jamison, M
  • C. Raynaud, and M
  • D. Dixon
  • E. M
  • F. Jamison and M
  • G. Raynaud only
  • H. M
  • I. Dixon only
  • J. None of these individuals

Answer: A

NEW QUESTION 13
From the following answer choices, choose the term that best corresponds to this description. Barrington Health Services, Inc. contracts with a state Medicaid agency as a fiscal intermediary. Barrington does not provide medical services, but contracts with medical providers on behalf of the state Medicaid agency.

  • A. Health insuring organization (HIO)
  • B. Independent practice association (IPA)
  • C. Physician practice management (PPM) company
  • D. Peer review organization (PRO)

Answer: A

NEW QUESTION 14
The Hanford Health Plan has delegated the credentialing of its providers to the Sienna Group, a credential verification organization (CVO). If the contract between Hanford and Sienna complies with all of the National Committee for Quality Assurance (NCQA) guidelines for delegation of credentialing, then this contract

  • A. Transfers to Sienna all rights to terminate or suspend individual practitioners or providers in Hanford's provider network
  • B. Describes the process by which Hanford evaluates Sienna's performance in credentialing providers
  • C. Both A and B
  • D. A only
  • E. B only
  • F. Neither A nor B

Answer: C

NEW QUESTION 15
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

  • 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
  • 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
  • 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
  • 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

Answer: D

NEW QUESTION 16
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.
By combining under Diversified a group of businesses that produce unrelated products and by consolidating the management of the businesses, Tidewater has achieved the type(s) of integration known as

  • A. Conglomerate integration and operational integration
  • B. Horizontal integration and operational integration
  • C. Horizontal integration and virtual integration
  • D. Conglomerate integration only

Answer: A

NEW QUESTION 17
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