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Network Management Questions 51–55 (page: 12)

Updated On: 9-Feb-2026

Most health plan contracts provide an outline of the criteria that a healthcare service must meet in order to be considered "medically necessary." Typically, in order for a healthcare service to be considered medically necessary, the service provided by a physician or other healthcare provider to identify and treat a member's illness or injury must be

  1. Consistent with the symptoms of diagnosis
  2. Furnished in the least intensive type of medical care setting required by the member's condition
  3. In compliance with the standards of good medical practice
  4. All of the above

Answer(s): D



When the Rialto Health Plan determines which of the emergency services received by its plan members should be covered by the health plan, it is guided by a standard which describes emergencies as medical conditions manifesting themselves by acute symptoms of sufficient severity (including severe pain) such that a person who possesses an average knowledge of health and medicine could reasonably expect the absence of immediate medical attention to result in placing the health of the individual in serious jeopardy. This standard, which was adopted by the NAIC in 1996, is referred to as the

  1. medical necessity standard
  2. prudent layperson standard
  3. "all-or-none" standard
  4. reasonable and customary standard

Answer(s): B



The provider contract between the Ocelot Health Plan and Dr. Enos Zorn, one of the health plan's participating providers, is a brief contract which includes, by reference, an Ocelot provider manual. This manual contains much of the information found in Ocelot's comprehensive provider contracts. The following statements are about Dr. Zorn's provider contract. Select the answer choice containing the correct statement.

  1. All statements in the provider contract shall be deemed to be warranties, because all statements of facts contained in the contract must be true only in those respects material to the contract.
  2. Because the provider manual is part of the contract, Ocelot must make sure that its provider manual is comprehensive and up-to-date.
  3. Because the provider contract is a brief contract, Ocelot most likely is prohibited from amending the contract unilaterally, even if it gives Dr. Zorn advance notice of its intent to amend the contract.
  4. Areas that should be covered in the provider manual, and not in the body of the contract, include any specific legal issues relevant to the contract.

Answer(s): B



A provider contract describes the responsibilities of each party to the contract. These responsibilities can be divided into provider responsibilities, health plan responsibilities, and mutual obligations. Mutual obligations typically include

  1. provisions for marketing the plan's product
  2. payment arrangements between the plan and the provider
  3. verification of the plan's eligibility to do business
  4. management of the contents of members' medical records

Answer(s): B



The Medea Clinic is a network provider for Delphic Healthcare. Delphic transferred the contract it held with Medea to the Elixir HMO, an entity that was not party to the original contract. The process by which Delphic transferred the contract it held with Medea to Elixir is known as

  1. Most-favored- nation arrangement
  2. Alimit on action
  3. Aconsideration
  4. An assignment

Answer(s): D



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