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AHIP AHM-520 Exam - Topic 6 Question 93 Discussion

The following statements are about a health plan's pricing of a preferred provider organization (PPO) plan. Three of the statements are true, and one statement is false. Select the answer choice containing the FALSE statement.
C) One difficulty in pricing a PPO is that the health plan's actuaries have no method of estimating which employees would be likely to select which provider groups.
A) Typically, the first step in pricing a PPO is to develop a base indemnity claims cost, which results from adjusting the indemnity plan as though the entire eligible group of employees is enrolled in the indemnity plan.
B) To develop the expected claims costs for the in-network PPO plan, the health plan's actuaries adjust the base indemnity claims costs to reflect pertinent characteristics of the plan, including the specific network plan design and provider discount arrangements.
D) After the health plan's actuaries use risk adjustment factors to adjust the existing claims costs for selection issues, the actuaries weight the in network and out-of-network costs to arrive at a composite claims cost for the PPO plan.

AHIP AHM-520 Exam - Topic 6 Question 93 Discussion

Actual exam question for AHIP's AHM-520 exam
Question #: 93
Topic #: 6
[All AHM-520 Questions]

The following statements are about a health plan's pricing of a preferred provider organization (PPO) plan. Three of the statements are true, and one statement is false. Select the answer choice containing the FALSE statement.

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Suggested Answer: C

by Cathrine at Jul 18, 2024, 07:15 PM

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Nada
7 months ago
D is spot on, they always adjust for those factors.
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Carissa
7 months ago
Wait, how can they not estimate provider choices? That sounds weird.
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Lawana
7 months ago
C seems off, I thought they had methods for that.
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Sarah
7 months ago
I think B is definitely true, makes sense.
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Rosendo
8 months ago
Statement A sounds right to me.
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Sage
8 months ago
Statement D sounds familiar, but I’m not completely confident about the weighting process for in-network and out-of-network costs.
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Lorrine
8 months ago
I practiced a similar question where the focus was on adjusting claims costs, and I think statement B is definitely true based on that.
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Filiberto
8 months ago
I'm a bit unsure about statement C; it seems like actuaries should have some way to estimate provider selection, but I can't recall the details.
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Vincenza
8 months ago
I remember that the first step in pricing a PPO involves developing the base indemnity claims cost, so I think statement A is true.
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Evelynn
8 months ago
I'm a bit confused about the last statement - weighting the in-network and out-of-network costs to get a composite claims cost. I'll need to review that part more carefully.
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Santos
8 months ago
Okay, let me think through this. The first step is to develop a base indemnity claims cost, and then the actuaries adjust that for the PPO plan's specific network and provider discounts. The tricky part is estimating employee selection of providers.
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Tamekia
8 months ago
This question seems straightforward, but I want to make sure I understand the key steps in pricing a PPO plan before selecting the false statement.
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Scarlet
9 months ago
The key here is to focus on identifying the false statement. I think I have a good handle on the overall process, so I'll carefully review each option and select the one that doesn't fit.
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Bettina
9 months ago
The key here is figuring out the term that describes the mechanism for a user to consume software rights. I'm leaning towards License as the best answer.
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Truman
9 months ago
Hmm, this is a tricky one. I'll need to think carefully about the specific features required for a Cisco HyperFlex stretched cluster.
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Blair
1 year ago
Ah, the joys of actuarial pricing. It's like a game of 'Guess the False Statement' - except the stakes are higher than a game night bet. Good thing these actuaries have a sense of humor, or they'd be as dry as the desert.
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Phil
1 year ago
C) One difficulty in pricing a PPO is that the health plan's actuaries have no method of estimating which employees would be likely to select which provider groups.
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Sylvie
1 year ago
B) To develop the expected claims costs for the in-network PPO plan, the health plan's actuaries adjust the base indemnity claims costs to reflect pertinent characteristics of the plan, including the specific network plan design and provider discount arrangements.
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Brynn
1 year ago
A) Typically, the first step in pricing a PPO is to develop a base indemnity claims cost, which results from adjusting the indemnity plan as though the entire eligible group of employees is enrolled in the indemnity plan.
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Tran
1 year ago
Yep, A is the false one. I mean, who would be crazy enough to price a PPO plan based on an indemnity plan? That's like trying to build a skyscraper using toothpicks.
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Anthony
1 year ago
Definitely, weighting the in-network and out-of-network costs is crucial for pricing a PPO plan accurately.
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Leila
1 year ago
It's important to adjust the base indemnity claims costs to reflect the specific characteristics of the PPO plan.
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Shonda
1 year ago
I agree, pricing a PPO plan based on an indemnity plan doesn't make sense.
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Bethanie
1 year ago
Haha, A is definitely the odd one out. Developing an indemnity plan as the base? What is this, the 1980s? Get with the times, people!
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Mica
1 year ago
D) After the health plan's actuaries use risk adjustment factors to adjust the existing claims costs for selection issues, the actuaries weight the in network and out-of-network costs to arrive at a composite claims cost for the PPO plan.
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Anissa
1 year ago
D) After the health plan's actuaries use risk adjustment factors to adjust the existing claims costs for selection issues, the actuaries weight the in network and out-of-network costs to arrive at a composite claims cost for the PPO plan.
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Felicitas
1 year ago
C) One difficulty in pricing a PPO is that the health plan's actuaries have no method of estimating which employees would be likely to select which provider groups.
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Joesph
1 year ago
C) One difficulty in pricing a PPO is that the health plan's actuaries have no method of estimating which employees would be likely to select which provider groups.
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Twila
1 year ago
B) To develop the expected claims costs for the in-network PPO plan, the health plan's actuaries adjust the base indemnity claims costs to reflect pertinent characteristics of the plan, including the specific network plan design and provider discount arrangements.
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Keshia
1 year ago
A) Typically, the first step in pricing a PPO is to develop a base indemnity claims cost, which results from adjusting the indemnity plan as though the entire eligible group of employees is enrolled in the indemnity plan.
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Kimberely
1 year ago
B) To develop the expected claims costs for the in-network PPO plan, the health plan's actuaries adjust the base indemnity claims costs to reflect pertinent characteristics of the plan, including the specific network plan design and provider discount arrangements.
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Veronique
1 year ago
A) Typically, the first step in pricing a PPO is to develop a base indemnity claims cost, which results from adjusting the indemnity plan as though the entire eligible group of employees is enrolled in the indemnity plan.
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Theron
1 year ago
I agree, A is the false statement. Everyone knows the base is the PPO plan, not some hypothetical indemnity plan. These actuaries must be living in the past.
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Niesha
1 year ago
I disagree, C makes sense. I believe D is the false statement. Actuaries don't weight in-network and out-of-network costs for a composite claims cost.
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Jordan
1 year ago
I think C is the false statement. Actuaries must have some way of estimating employee preferences.
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Xochitl
1 year ago
I disagree. I believe the false statement is D because actuaries do not weight in-network and out-of-network costs to arrive at a composite claims cost.
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Reed
1 year ago
The false statement is A. Typically, the first step in pricing a PPO is to develop a base indemnity claims cost. That's just plain wrong, the base should be the PPO plan design, not an indemnity plan.
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Weldon
1 year ago
That's correct. They adjust for network plan design and provider discount arrangements.
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Delila
1 year ago
So, the actuaries adjust the base indemnity claims costs to reflect characteristics of the PPO plan, right?
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Glynda
1 year ago
Yeah, I agree. The base indemnity claims cost is not the first step in pricing a PPO.
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Alpha
1 year ago
I think the false statement is A, the base should be the PPO plan design, not an indemnity plan.
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Annabelle
1 year ago
I agree with Gail. Actuaries can estimate which employees would select which provider groups.
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Gail
1 year ago
I think the false statement is C.
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