Free AHM-520 Exam Dumps

Question 46

- (Topic 1)
The following statements are about various reimbursement arrangements that health plans have with hospitals. Select the answer choice containing the correct statement.

A. A sliding scale per-diem charges arrangement differs from a sliding scale discount on charges arrangement in that only a sliding scale per-diem charges arrangement is based on total volume of admissions and outpatient procedures.
B. Under a typical reimbursement arrangement that is based on diagnosisrelated groups (DRGs), if the payment amount is fixed on the basis of diagnosis, then any reduction in costs resulting from a reduction in days will go to the health plan rather than to the hospital.
C. A negotiated straight per-diem charge requires payment of a single charge for a day in the hospital, regardless of any actual charges or costs incurred during the hospital stay.
D. A straight discount on charges arrangement is the most common reimbursement method in markets with high levels of health plans.

Correct Answer:C

Question 47

- (Topic 2)
The HMO Model Act sets certain requirements that an entity that wishes to operate as an HMO must meet. These requirements include:

A. Having an initial net worth of at least $5 million
B. Maintaining a net worth equal to at least 5% of premium revenues for the first $150 million in premium revenue
C. Using a prospective method to estimate future risk
D. Obtaining a certificate of authority (COA) before beginning operations

Correct Answer:D

Question 48

- (Topic 1)
The reimbursement arrangement that Dr. Caroline Monroe has with the Exmoor Health Plan includes a typical withhold arrangement. One true statement about this withhold arrangement is that, for a given financial period,

A. D
B. Monroe and Exmoor are equally responsible for making up the difference if cost overruns exceed the amount of money withheld
C. Exmoor most likely distributes to D
D. Monroe the entire amount withheld from her if her costs are below the amount budgeted for the period
E. Exmoor pays D
F. Monroe at the end of the period an amount over and above her usual reimbursement, and this amount is based on the performance of the plan as a whole
G. Exmoor most likely withholds between 3% and 5% of D
H. Monroe's total reimbursement

Correct Answer:B

Question 49

- (Topic 2)
The core of a health plan's strategic financial plan is the development of its pro forma financial statements. The following statements are about these pro forma financial statements. Select the answer choice containing the correct statement.

A. A health plan's pro forma financial statements forecast what the plan's financial condition will be at the end of an accounting period, without regard to whether the health plan achieves its objectives.
B. Forecasting the balance sheet is more critical to the health plan than forecasting either the cash flow statement or the income statement, because the balance sheet drives the development of the other two statements.
C. In order to avoid allowing the desired financial results to drive the assumptions used in developing the pro forma income statement, a health plan should avoid linking these assumptions to the health plan's overall strategic plan.
D. A health plan can use its pro forma cash flow statement to calculate the net present value of the health plan's strategic plan.

Correct Answer:D

Question 50

- (Topic 2)
The Titanium health plan's product has a unit price of $120 PMPM and a unit variable cost of $80 PMPM. Titanium has $100,000 in fixed costs per month. This information indicates that, for its product, Titanium's

A. Unit contribution margin is $80
B. Unit contribution margin is $200
C. Break-even point is 500 members
D. Break-even point is 2,500 members

Correct Answer:D