Free AHIP AHM-520 Exam Dumps - Page 2

MultipleChoice

A health plan can use cost accounting in order to

MultipleChoice

The Fairway health plan is a for-profit health plan that issues stock. The following data was taken from Fairway's financial statements:

-Current assets.....$5,000,000 -Total assets.....6,000,000 -Current liabilities.....2,500,000 -Total liabilities.....3,600,000 -Stockholders' equity.....2,400,000

Fairway's total revenues for the previous financial period were $7,200,000, and its net income for that period was $180,000.

For the previous financial period, Fairway's net profit margin was

MultipleChoice

The Fairway health plan is a for-profit health plan that issues stock. The following data was taken from Fairway's financial statements: Current assets.....$5,000,000

Total assets.....6,000,000

Current liabilities.....2,500,000

Total liabilities.....3,600,000

Stockholders' equity.....2,400,000

Fairway's total revenues for the previous financial period were $7,200,000, and its net income for that period was $180,000.

Assume that the healthcare industry average for the debt-to-equity ratio is 0.90. The following statement(s) can correctly be made about Fairway's debt to equity ratio:

MultipleChoice

The Nuevo health plan's capital structure consists of 30% debt and 70% equity. Nuevo's average after-tax cost of debt is 6% and its cost of equity is 12%. The following statement(s) can correctly be made about Nuevo's weighted average cost of capital (WACC):

MultipleChoice

The accounting department of the Enterprise health plan adheres to the following policies:

-Policy A---Report gains only after they actually occur -Policy B---Report losses immediately -Policy C---Record expenses only when they are certain -Policy D---Record revenues only when they are certain

Of these Enterprise policies, the ones that are consistent with the accounting principle of conservatism are Policies

MultipleChoice

The following statements indicate the pricing policies of two health plans that operate in a particular market:

-The Accent Health Plan consistently underprices its product -The Bolton Health Plan uses extremely strict underwriting practices for the small groups to which it markets its plan

From the following answer choices, select the response that correctly indicates the most likely market effects of the pricing policies used by Accent and Bolton.

MultipleChoice

The following statement(s) can correctly be made about a health plan's underwriting of small groups:

MultipleChoice

The following statements illustrate the use of different rating methods by health plans:

-The Dover health plan established rates for small groups by using a rating method which requires that the average premium in each group cannot be more than 120% of the average premium for any other group. Under this method, all members of each group pay the same premium, which is based on the experience of the group.

-Under the rating method used by the Rolling Hills health plan, the health plan calculates the ratio of a group's experience to the group's historical manual rate. Rolling Hills then multiplies this ratio by the group's future manual rate. Rolling Hills cannot consider the group's experience in determining premium rates.

From the following answer choices, select the response that correctly indicates the rating methods used by Dover and Rolling Hills.

MultipleChoice

Federal law addresses the relationship between Medicare- or Medicaid contracting health plans and providers who are at 'substantial financial risk.'

Under federal law, Medicare- or Medicaid-contracting health plans

MultipleChoice

In order to calculate a simple monthly capitation payment, the Argyle Health Plan used the following information:

-The average number of office visits each member makes in a year is two -The FFS rate per office visit is $55 -The member copayment is $5 per office visit -The reimbursement period is one month

Given this information, Argyle would correctly calculate that the per member per month (PMPM) capitation rate should be