Health Plan Operations Exam Prep Chapter.4

Chapter 4: Health Plan Operations

True or False Questions

1. The subscriber in a health plan is the party that pays the premium.
   1. True
   2. False
2. The business processes in a health plan are generally “siloed” and have little interaction.
   1. True
   2. False
3. Capitation creates an incentive for the provider to render as many services as possible since revenues have already been collected.
   1. True
   2. False
4. In some cases, health plans may be both a provider of care and act as an insurer.
   1. True
   2. False
5. Health insurers are required to pay for medical services to members, regardless of medical necessity.
   1. True
   2. False
6. Fee-for-service payment methods have an incentive for providers to minimize costs, increase efficiency, and increase the number of patient encounters.
   1. True
   2. False
7. The credentialing function in Network Management must maintain an ongoing review and reverification of provider credentials.
   1. True
   2. False

Multiple Choice Questions

1. Which of the following are components of a health insurance premium?
   1. Medical loss and administrative load
   2. Medical loss and claim reserves
   3. Administrative load and claims processing costs
   4. Administrative load and profit
2. Which of the following is not a fee-for service payment type?
   1. Ambulatory Payment Classification
   2. Diagnosis Related Group
   3. Capitation
   4. Case rate
3. Which of the following types of reimbursement create the least financial and operational risk for a health care provider?
   1. Capitation
   2. Charge-based payment
   3. Diagnosis Related Group
   4. Case rates
4. Which of the following operational areas are not impacted by Network Management and Provider Services?
   1. Sales, Enrollment, and Member Services
   2. Claims
   3. Pharmacy benefit managers
   4. Medical Management
5. Which of the following describes the interaction between Provider Management and Sales?
   1. Enrollment data for eligibility
   2. Provider listings to show network adequacy
   3. Demographics to support premium calculations
   4. Claims payments to support premium calculations
6. Which of the following is an example of the interaction between Provider Management and Claims?
   1. Authorizations and continuing stay approvals
   2. Patient data for coverage
   3. Premium data to establish bank balance for payments
   4. Contracted fees and payment terms
7. Which of the following is an example of a reason why a claim would get a denial by an insurer?
   1. The patient was not eligible on the date of service
   2. A prior authorization was obtained when not needed
   3. The services were an emergency
   4. Contracted fees and payment terms were excessive
8. Differentiate the incentives for providers between fee-for-service and capitated reimbursements.
9. Differentiate between the medical loss and administrative components of a health insurance premium, give an example of an expense item for each, and describe at least one operational issue for each.

The medical loss component may total approximately 80% of the total premium and is used for payment of covered medical expenses for members while the administrative load approximates 20% of the premium and is used to pay the operating expenses for the health plan, including profits. Examples and issues include items the following from Table 4-1 on page 51 in the text:

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