Free AHM-520 Exam Dumps

Question 6

- (Topic 2)
The Puma health plan uses return on investment (ROI) and residual income (RI) to measure the performance of its investment centers. Two of these investment centers are identified as X and Y. Investment Center X earns $10,000,000 in operating income on controllable investments of $50,000,000, and it has total revenues of $60,000,000. Investment Center Y earns $2,000,000 in operating income on controllable investments of $8,000,000, and it has total revenues of $10,000,000. Both centers have a minimum required rate of return of 15%.
The following statements are about Puma's evaluation of these investment centers. Select the answer choice containing the correct statement.

A. Investment Center Y's RI is greater than Investment Center X's RI.
B. The ROI for Investment Center X is 16.7%, and the ROI for Investment Center Y is 20.0%.
C. Because Investment Centers X and Y are different sizes, Puma should not use ROI to compare these investment centers.
D. According to the evaluation of ROI, Investment Center Y achieves a higher return on its available resources than does Investment Center X.

Correct Answer:D

Question 7

- (Topic 1)
The following statement(s) can correctly be made about a health plan's underwriting of small groups:

A. Typically, a health plan medically underwrites both the employees of a small group and their dependents, even though small group reform laws prohibit health plans from singling out individuals for rejection or substandard rate-ups.
B. In the absence of laws mandating otherwise, a health plan's underwriting standardsgrow stricter as group size gets smaller.
C. Both A and B
D. A only
E. B only
F. Neither A nor B

Correct Answer:A

Question 8

- (Topic 2)
Costs that can be defined by behavior are most commonly classified as fixed costs, variable costs and semi-variable costs. Examples of fixed costs include:

A. Rent, insurance expense, and depreciation on computer equipment
B. Rent, claims processing costs, and selling expenses
C. Claims processing costs, telephone expense, and depreciation on computer equipment
D. Premium processing, rent, and selling expenses

Correct Answer:A

Question 9

- (Topic 2)
In a comparison of small employer-employee groups to large employer-employee groups, it is correct to say that small employer-employee groups tend to:

A. More closely follow actuarial predictions with respect to morbidity rates
B. Generate more administrative expenses as a percentage of the total premium amount the group pays
C. Have less frequent and smaller claims fluctuations
D. Expose an health plan to a lower risk of anti selection

Correct Answer:B

Question 10

- (Topic 1)
The Challenger Group is a type of management services organization (MSO) that purchases the assets of physician practices, provides practice management andadministrative support servicesto participating providers, and offers physicians a long- term contract and an equity position in Challenger. This information indicates that Challenger is a type of health plan

A. Known as
B. An integrated delivery system (IDS)
C. Amedical foundation
D. Aprovider-sponsored organization (PSO)
E. Aphysician practice management (PPM) company

Correct Answer:D