After conducting a business portfolio analysis, the Acorn Health Plan decided to pursue a harvest strategy with one of its strategic business units (SBUs)-Guest Behavioral Healthcare. By following a harvest strategy with Guest, Acorn most likely is seeking to
A. Maximize Guest's short-term earnings and cash flow
B. Increase Guest's market share
C. Maintain Guest's market position
D. Sacrifice immediate earnings in order to fund Guest's growth
Health maintenance organizations (HMOs) seeking federal qualification under the HMO Act of 1973 and its amendments must meet requirements in four basic operational areas. One operational requirement for qualification is that an HMO must
A. Ensure that at least 1/3 of its policy-making body is comprised of HMO members
B. Ensure that there is adequate representation of underserved communities on its policy- making body
C. Have an ongoing quality assurance program that meets the requirements of the Centers for Medicaid and Medicare Services (CMS), stresses health outcomes, and provides for review by health professionals
D. Test, safeguard, and promote quality of care by following detailed programmatic techniques that are explained in CMS's Federally Qualified HMO (FQHMO) Manual
The government uses various tools within the realm of two broad categories of public policy-allocative 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
Third party administrators (TPAs) provide various administrative services to health plans or groups that provide health benefit plans to their employees or members. Many state laws that regulate TPAs are based on the NAIC Third Party Administrator Model Statute. One provision of the TPA Model Law is that it
A. Prohibits TPAs from performing insurance functions such as underwriting and claims processing
B. Prohibits TPAs from entering into an agreement under which the amount of the TPA's compensation is based on the amount of premium or charges the TPA collects
C. Requires TPAs, upon the termination of a TPA agreement with a group, to immediately transfer all its records relating to the group to the new administrator
D. Requires TPAs to notify the state insurance department immediately following any material change in the TPA's ownership or control
The Good and Well Pharmacy, a Medicaid provider of outpatient drugs, is subject to the prospective drug utilization review (DUR) mandates of the Omnibus Budget Reconciliation Act of 1990 (OBRA '90). One component of prospective DUR is screening. In this context, when Good and Well is involved in the process of screening, the pharmacy is
A. Updating a formulary to represent the current clinical judgment of providers and experts in the diagnosis and treatment of disease
B. Reviewing patient profiles for the purpose of identifying potential problems
C. Consulting directly with prescribers and patients in the planning of drug therapy
D. Denying coverage for the off-label use of approved drugs
Directors on a health plan's board must demonstrate their compliance with three duties in all their decisions. Directors who exercise their duties in good faith and with the same degree of diligence and skill that an ordinary, reasonable person would be expected to display in the same situation are meeting the duty known as the
A. Duty of loyalty
B. Duty to supervise
C. Duty of care
D. Trustee duty
SoundCare Health Services, an MCO, 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
A federal law that significantly affects health plans is the Health Insurance Portability and Accountability Act of 1996 (HIPAA). In order to comply with HIPAA provisions, issuers offering group health coverage generally must.
A. Renew group health policies in both small and large group markets, regardless of the health status of any group member
B. Provide a plan member with a certificate of creditable coverage at the time the member enrolls in the group plan
C. Both A and B
D. A only
E. B only
F. Neither A nor B
Regulatory and legislative bodies are among the important environmental forces in the health plan industry. The following statements are about such regulation and legislation. Select the answer choice that contains the correct statement.
A. Federal guidelines exist to direct health plans on compliance issues when a health plan encounters conflicting state laws in a given service area.
B. Administrative rules and regulations do not carry the force of law.
C. As stakeholders in the health plan industry, federal and state governments exert tremendous influence over a health plan's formation and operations.
D. In recent years, the number of health plan bills in the state and the federal legislatures has decreased.
There are several exceptions to the Ethics in Patient Referrals Act and its amendments (the Stark laws), which prohibit a physician from referring Medicare or Medicaid patients for certain designated services or supplies provided by entities in which the physician has a financial interest. Consider whether the situations described below qualify as exceptions to the Stark laws:
Situation A: Dr. Wong is a physician in the Marvel Health Plan's provider network and has a financial relationship with Marvel arising from the health plan's compensation for his services. Marvel is not a prepaid health plan.
Situation B: Dr. Ryder is a physician in the provider network of the Glen Health Plan, which is not a prepaid health plan. In situations of medical necessity, Dr. Ryder refers Glen patients to a physical therapy clinic that leases office space from him.
Situation C: Dr. Yost has a compensation arrangement with a health plan for providing health services under the Medicare+Choice program.
An arrangement that is exempt from the Stark laws is described in
A. All of these situations
B. Situations A and C only
C. Situation B only
D. Situation C only
