NEW QUESTION 1
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.
In creating Diversified, Tidewater formed the type of company known as

• A. A mutual holding company
• B. A spin-off company
• C. An upstream holding company
• D. A downstream holding company

Answer: D

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
The following statements describe various state benefit mandates. Select the answer choice that describes a state law pertaining to off-label uses for drugs.

• A. State A mandates that health plans provide benefits for experimental drugs for the treatment of terminal diseases such as AIDS and cancer.
• B. State B mandates that health plans have a procedure in place to allow a patient to have a nonformulary drug covered under certain conditions.
• C. State C mandates that, in dispensing generic drugs, pharmacies must label drug containers with the name of the substituted generic medication.
• D. State D mandates that health plans provide benefits for the treatment of one form of cancerwith specific drugs that had originally been approved by the Food and Drug Administration (FDA) to treat other forms of cancer.

Answer: D

NEW QUESTION 4
Regulators of health plans have set standards in a number of areas of plan operations. Requirements with which health plans must comply typically include

• A. providing enrollees and prospective enrollees with detailed information about various aspects of health plan policies and operations
• B. maintaining internal grievance and appeals processes to resolve enrollee complaints against the organization
• C. maintaining quality assurance programs that reflect the plan's activities in monitoring quality
• D. all of the above

Answer: D

NEW QUESTION 5
In the paragraph below, a statement contains two pairs of terms enclosed in parentheses. Determine which term in each pair correctly completes the statement. Then select the answer choice containing the two terms that you have chosen.
In the case of Pacificare of Oklahoma, Inc. v. Burrage, the U.S. Court of Appeals for the Tenth Circuit considered whether ERISA preempts medical malpractice claims against health plans based on certain liability theories. In this case, the Tenth Circuit court held that ERISA (should / should not) preempt a liability claim against an HMO for the malpractice of one of its primary care physicians, and therefore the HMO was subject to a claim of (subordinated / vicarious) liability.

• A. Should / subordinated
• B. Should / vicarious
• C. Should not / subordinated
• D. Should not / vicarious

Answer: D

NEW QUESTION 6
The government uses various tools within the realm of two broad categories of public policyallocative policies and regulatory policies. In the context of public policy, laws that fall into the
category of allocative policy include

• A. The Balanced Budget Act (BBA) of 1997
• B. The Health Insurance Portability and Accountability Act (HIPAA) of 1996
• C. Laws affecting health plan quality oversight
• D. Laws specifying procedures for health plan handling of consumer appeals and grievances

Answer: A

NEW QUESTION 7
Any willing provider laws have their share of proponents and opponents. Arguments commonly made in opposition to any willing provider laws include

• A. That such laws reduce the number of providers in a health plan's network
• B. That such laws limit consumer choice to coverage options that are more costly than networkbased plans
• C. That such laws encourage providers to offer discounts in exchange for patient volume
• D. All of the above

Answer: B

NEW QUESTION 8
TRICARE, a military healthcare program, offers eligible beneficiaries three options for healthcare services: TRICARE Prime, TRICARE Extra, and TRICARE Standard. With respect to plan features, both an annual deductible and claims filing requirements must be met, regardless of whether care is delivered by network providers, under

• A. TRICARE Prime and TRICARE Extra only
• B. TRICARE Extra and TRICARE Standard only
• C. TRICARE Standard only
• D. None of these healthcare options

Answer: C

NEW QUESTION 9
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.
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 10
In 1994, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) revised their 1993 healthcare-specific antitrust guidelines to include analytical principles relating to multiprovider networks. Under the new guidelines, the regulatory agencies will use the rule of reason to analyze joint pricing activities by competitors in physician or multiprovider networks only if

• A. Provider integration under the network is likely to produce significant efficiencies that benefit consumers
• B. The providers in a network share substantial financial risk
• C. The combining of providers into a joint venture enables the providers to offer a new product
• D. All of the above

Answer: A

NEW QUESTION 11
From the following answer choices, choose the term that best corresponds to this description. The
SureQual Group is a group of practicing physicians and other healthcare professionals paid by the federal government to review services ordered or furnished by other practitioners in the same medical fields for the purpose of determining whether medical services provided were reasonable and necessary, and to monitor the quality of care given to Medicare patients.

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

Answer: D

NEW QUESTION 12
The board of directors of the Garnet Health Plan, an integrated delivery system (IDS), includes
physicians and hospital representatives who sometimes feel compelled to represent a specific organization that is only one part of the IDS. Such a circumstance can lead to , which is a situation in which the members of the board focus on the best interests of component parts of the enterprise rather than on the best interests of Garnet as a whole.

• A. An enterprise-focused board
• B. Representational governance
• C. Enterprise liability
• D. Boundary spanning

Answer: B

NEW QUESTION 13
While traditional workers' compensation laws have restricted the use of managed care techniques, many states now allow managed workers' compensation. One common characteristic of managed workers' compensation plans is that they

• A. Discourage injured employees from returning to work until they are able to assume all the duties of their jobs
• B. Use low copayments to encourage employees to choose preferred providers
• C. Cover an employee's medical costs, but they do not provide coverage for lost wages
• D. Rely on total disability management to control indemnity benefits

Answer: D

NEW QUESTION 14
The Sawgrass Health Center is an institution that trains healthcare professionals and performs various clinical and other types of healthcare-related research. Because Sawgrass receives government funding, it is required to provide medical care for the poor. Of the following types of health plans, Sawgrass can best be described as:

• A. A medical foundation
• B. An academic medical center (AMC)
• C. A healthcare cooperative
• D. A community health center (CHC)

Answer: B

NEW QUESTION 15
Brighton Health Systems, Inc., a health plan, wants to modify its advertising and marketing materials to avoid liability risk under the principle of ostensible agency. One step that Brighton can take to reduce the likelihood of being liable for provider negligence under the theory of ostensible agency is to

• A. Guarantee the quality of medical care provided to Brighton members
• B. Use advertising materials which state that Brighton itself provides healthcare
• C. Add disclaimers to advertising materials indicating that only physicians and not Brighton make medical decisions
• D. Use advertising materials to characterize Brighton's role as providing physicians, hospitals, and other healthcare professionals rather than arranging for healthcare.

Answer: C

NEW QUESTION 16
Greenpath Health Services, Inc., an HMO, recently terminated some providers from its network in
response to the changing enrollment and geographic needs of the plan. A provision in Greenpath's contracts with its healthcare providers states that Greenpath can terminate the contract at any
time, without providing any reason for the termination, by giving the other party a specified period of notice.
The state in which Greenpath operates has an HMO statute that is patterned on the NAIC HMO Model Act, which requires Greenpath to notify enrollees of any material change in its provider network. As required by the HMO Model Act, the state insurance department is conducting an examination of Greenpath's operations. The scope of the on-site examination covers all aspects of Greenpath's market conduct operations, including its compliance with regulatory requirements. From the following answer choices, select the response that identifies the type of market conduct examination that is being performed on Greenpath and the frequency with which the HMO Model Act requires state insurance departments to conduct an examination of an HMO's operations.

• A. Type of examination: comprehensive; Required frequency: annually
• B. Type of examination: comprehensive; Required frequency: at least every three years
• C. Type of examination: target; Required frequency: annually
• D. Type of examination: target; Required frequency: at least every three years

Answer: B

NEW QUESTION 17
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 18
There are several approaches to the interagency division of responsibility for managed care entity (MCE) oversight. In State M, the state Medicaid agency, the state department of health, and the state insurance department are all responsible for ensuring that quality improvement programs are in place among the same group of MCEs and that these programs meet each agency's rules and regulations for such programs. This information indicates that State M uses the approach known as the

• A. Parallel model
• B. Shared model
• C. Concurrent model
• D. PACE model

Answer: C

NEW QUESTION 19
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