QUESTION: 45 Exam Topic: 1, Volume A

The purest form of a self-funded benefit plan is one in which the employer pays benefits from current revenue, administers all aspects of the plan, and bears the risk that actual benefit payments will exceed the expected amount of payments. A decision to use this kind of self-funding is generally considered most desirable when certain conditions are present. These conditions most likely include that the benefit plan

Is a contributory plan
Is subject to collective bargaining
Is unable to secure discounts from the physicians who provide medical services to the plan members
Has a relatively high frequency of low severity claims

Answer(s): D

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QUESTION: 46 Exam Topic: 1, Volume A

The Harp Company self-funds the health plan for its employees. The plan is administered under a typical administrative-services-only (ASO) arrangement. One true statement about this ASO

arrangement is that

This arrangement prevents Harp from purchasing stop-loss coverage for its health plan
The amount that Harp pays the administrator to provide the ASO services is not subject to state premium taxes
The administrator is responsible for paying claims from its own assets if Harp's account is insufficient
The charges for the ASO services must be stated as a percentage of the amount of claims paid for medical expenses incurred by Harp's covered employees and their dependents

Answer(s): B

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QUESTION: 47 Exam Topic: 1, Volume A

The Jasmine Company, which self funds the health plan for its 200 employees, has established a 501(c)(9) trust as a means of addressing possible claims fluctuations under the health plan. This plan is not a part of a collective bargaining process. A potential disadvantage to Jasmine of using a 501(c)(9) trust is that

The cost of maintaining the trust may be prohibitive to Jasmine
The trust must always maintain enough assets to pay the health plan's claims that have been incurred but not yet paid
Jasmine is prohibited from earning any return on the trust assets
The contributions to this trust are not deductible for federal income tax purposes

Answer(s): A

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QUESTION: 48 Exam Topic: 1, Volume A

The following statements are about the new methodology authorized under the Balanced Budget Act of 1997 (BBA) for payments by the Centers for Medicaid & Medicare Services (CMS) to Medicare- contracting health plans.

Select the answer choice containing the correct statement.

Under this new methodology, Medicare-contracting health plans are paid the lower of (a) a floor payment amount per enrollee covered or (b) the health plan's payment rate increased by 2% from the previous year.
The new methodology has decreased the rate of growth in payments from CMS to Medicare- contracting health plans.
Under this new methodology, Medicare-contracting health plans are paid 90% of the adjusted average per capita cost (AAPCC) of providing a service to a beneficiary.
Under the principal inpatient diagnostic cost group (PIP-DCG), a new risk adjustment methodology, Medicare-contracting health plans will no longer be required to calculate and submit to CMS a Medicare adjusted community rate (ACR).

Answer(s): B

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Free AHM-520 Exam Braindumps (page: 12)

QUESTION: 45 Exam Topic: 1, Volume A

QUESTION: 46 Exam Topic: 1, Volume A

QUESTION: 47 Exam Topic: 1, Volume A

QUESTION: 48 Exam Topic: 1, Volume A