AHM 530 - Tests

Assignment 1: The Network Management Function

Reading 1A: The Role of Network Management in a Health Plan Organization

Explain the meaning of network management and list some of the activities that are typically included in this function

Describe the role of a network management director, a contracting specialist, and a provider relations representative in network management

Define profiling and explain its significance in network management Describe some training and support approaches that health plan organizations (health plans) use to improve the

performance of network management staff Explain the relationship between network management and medical management, risk management, member

services, and claims administration

Instructions: 1. Select or enter the best answer for each of the 5 questions. 2. Answer all the questions. Remember to scroll down if necessary.

3. Click Complete the Test to score your answers and view a report.

1. By definition, a measure of the extent to which a health plan member can obtain necessary medical services in a timely manner is known as

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2.

network management

quality

cost-effectiveness

accessibility

2. Decide whether the following statement is true or false:

The organizational structure of a health plan’s network management function often depends on the size and geographic scope of the health plan. With respect to the size of a health plan, it is correct to say that smaller health plans typically have less integration and more specialization of roles than do larger health plans.

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3.

True

False

3. The following paragraph contains an incomplete statement. Select the answer choice containing the term that correctly completes the statement.

One important activity within the scope of network management is ensuring the quality of the health plan’s provider networks. A primary purpose of __________________ is to review the clinical competence of a provider in order to determine whether the provider meets the health plan’s preestablished criteria for participation in the network.

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4.

authorization

provider relations

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credentialing

utilization management

4. One important aspect of network management is profiling, or provider profiling. Profiling is most often used to

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5.

measure the overall performance of providers who are already participants in the network assess a provider’s overall satisfaction with a plan’s service protocols and other operational areas verify a prospective provider’s professional licenses, certifications, and training familiarize a provider with a plan’s procedures for authorizations and referrals

5. Network managers rely on a health plan’s claims administration department for much of the information needed to manage the performance of providers who are not under a capitation arrangement. Examining claims submitted to a health plan’s claims administration department enables the health plan to

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determine the number of healthcare services delivered to plan members

monitor the types of services provided by the health plan’s entire provider network evaluate providers’ practice patterns and compliance with the health plan’s procedures for the delivery of care

all of the above

>---------- End of the Test ----------<

1 D2 B3 C4 A5 D

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Reading 1B: Environmental Considerations for Network Management

Understand the numerous legislative and regulatory requirements that affect network management Identify the expectations of purchasers and consumers with respect to network management Describe how health plans balance complex and sometimes competing interests and requirements in managing

provider panels



1. The Avignon Company discontinued its contract with a traditional indemnity insurer and contracted exclusively with the Minaret Health Plan to provide the sole healthcare plan to Avignon’s employees. By agreeing to an exclusive contract with Minaret, Avignon has entered into a type of healthcare contract known as

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2.

a carrier guarantee arrangement

open access

total replacement coverage

selective contract coverage

2. Federal laws—including the Ethics in Patient Referrals Act, the Health Maintenance Organization (HMO) Act of 1973, the Employee Retirement Income Security Act (ERISA), and the Federal Trade Commission Act—have impacted the ways that health plans conduct business. For instance, the Mosaic Health Plan must comply with the following federal laws in order to operate:

Regulation 1: Mosaic must establish a mandated grievance resolution mechanism, including a method for members to address grievances with network providers. Regulation 2: Mosaic must not allow its providers to refer Medicare and Medicaid patients toentities in which they have a financial or ownership interest.

From the answer choices below, select the response that correctly identifies the federal legislation on which Regulation 1 and Regulation 2 are based.

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3.

Regulation 1 - The Ethics in Patient Referrals Act Regulation 2 - The HMO Act of 1973 Regulation 1 - The HMO Act of 1973 Regulation 2 - The Ethics in Patient Referrals Act Regulation 1 - ERISA Regulation 2 - The Federal Trade Commission Act Regulation 1 - The Federal Trade Commission Act Regulation 2 - ERISA

3. In 1996, Congress passed the Health Insurance Portability and Go to








Accountability Act (HIPAA), which increased the continuity and portability of health insurance coverage. One statement that can correctly be made about HIPAA is that it

question 4.

applies to group health insurance plans only

limits the length of a health plan’s pre-existing condition exclusion period for a previously covered individual to a maximum of six months after enrollment. guarantees access to healthcare coverage for small businesses and previously covered individuals who meet specified eligibility requirements. guarantees renewability of group and individual health coverage, provided the insureds are still in good health

4. After HIPAA was enacted, Congress amended the law to include the Mental Health Parity Act (MHPA) of 1996, a federal requirement relating to mental health benefits. One true statement about the MHPA is that it

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5.

requires all health plans to provide coverage for mental health services

requires health plans to carve out mental/behavioral healthcare from other services provided by the plans allows health plans to require patients receiving mental health services to pay higher copayments than patients seeking treatment for physical illnesses prohibits health plans that offer mental health benefits from applying more restrictive limits on coverage for mental illness than on coverage for physical illness

5. From the following answer choices, choose the term that best matches the description. An integrated delivery system (IDS), which controls most providers in a particular specialty, agrees to provide that specialty service to a health plan only on the condition that the health plan agree to contract with the IDS for other services.

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6.

Group boycott

Horizontal division of territories

Tying arrangements

Concerted refusal to admit

6. From the following answer choices, choose the term that best matches the description. Members of a physician-hospital organization (PHO) denied membership to a physician solely because the physician has admitting privileges at a competing hospital.

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7.

Group boycott

Horizontal division of territories

Tying arrangements

Concerted refusal to admit












7. Some states have enacted any willing provider laws. From the perspective of the health plan industry, one drawback of any willing provider laws is that they often result in a reduction of a plan’s

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8.

premium rates

ability to monitor utilization

number of primary care providers (PCPs)

number of specialists and ancillary providers

8. In the paragraph below, two statements each contain a pair of terms enclosed in parentheses. Determine which term correctly completes each statement. Then select the answer choice that contains the two terms you have chosen. In most states, a health plan can be held responsible for a provider’s negligent malpractice. This legal concept is known as (vicarious liability / risk sharing). One step that health plans can take to reduce their exposure to malpractice lawsuits is to state in health plan-provider agreements, marketing collateral, and membership literature that the providers are (employees of the health plan / independent contractors).

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9.

vicarious liability / employees of the health plan

vicarious liability / independent contractors

risk sharing / employees of the health plan

risk sharing / independent contractors

9. The National Committee for Quality Assurance (NCQA) has integrated accreditation with Health Employer Data and Information Set (HEDIS) measures into a program called Accreditation ’99. One statement that can correctly be made about these accreditation standards is that

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10.

Health plans are required by law to report HEDIS results to NCQA

HEDIS restricts its reporting criteria to a narrow group of quantitative performance measures, while NCQA includes a broad range of qualitative performance measures private employer groups purchasing health care coverage increasingly require both NCQA accreditation and HEDIS reporting HEDIS includes measures of a health plan’s effectiveness of care rather than its cost of care

10. The National Association of Insurance Commissioners (NAIC) Managed Care Plan Network Adequacy Model Act defines specific adequacy and accessibility standards that health plans must meet. In addition, the Model Act requires health plans to

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11.

hold plan members responsible for unreimbursed charges or unpaid claims

allow providers to develop their own standards of care

adhere to specified disclosure requirements related to provider contract termination file written access plans and sample contracts with the Centers for Medicaid and Medicare Services (CMS)













11. The following statement(s) can correctly be made about the TRICARE managed healthcare program of the U.S. Department of Defense. 1. Active-duty military personnel are automatically enrolled in TRICARE’s HMO option (TRICARE Prime). 2. Eligible family members and dependents can enroll in TRICARE Prime, the PPO plan (TRICARE Extra), or an indemnity plan (TRICARE Standard).

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Both 1 and 2

1 only

2 only

Neither 1 nor 2

>---------- End of the Test ----------<

1 C2 B3 C4 D5 C6 A7 B8 B9 C10 C11 A



Assignment 2: Strategies for Network Development and Management

Reading 2A: Analysis of Market and health plan Needs

Explain how the presence of provider organizations and the level of market maturity affect network strategies Explain how a health plan can use a competitive analysis to determine the size of the network Describe some differences between network needs for large employers and needs for small employers Describe some of the challenges that health plans face when developing networks in rural areas

List several different areas for which a health plan should establish goals before beginning to develop or revise a provider network



1. For this question, if answer choices (A) through C) are all correct, select answer choice (D). Otherwise, select the one correct answer choice. Understanding the level of health plan penetration in a particular market can help a health plan determine which products are most appropriate for that market. Indicators of a mature health plan market include

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2.

a reduction in the rate of growth in health plan premium levels

a reduction in the level of outcomes management and improvement

an increase in the rate of inpatient hospital utilization

all of the above

2. The Holiday Health Plan is preparing to enter a new market. In order to determine the optimal size of its provider panel in the new market, Holiday is conducting a competitive analysis of provider networks of the market’s existing health plans. Consider whether, in conducting its competitive analysis, Holiday should seek answers to the following questions:

Question 1: What are the cost-containment strategies of the health plans with increasing market shares? Question 2: What are the premium strategies of the health plans with large market shares? Question 3: What are the characteristics of health plans that are losing market share?

In its competitive analysis, Holiday should most likely obtain answers to questions

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3.

1, 2, and 3

1 and 2 only

1 and 3 only

2 and 3 only

3. The sizes of the businesses in a market affect the types of health Go to








programs that are likely to be purchased. Compared to smaller employers (those with fewer than 100 employees), larger employers (those with more than 1,000 employees) are

question 4.

more likely to contract with indemnity health plans

more likely to offer their employees a choice in health plans

less likely to contract with health plans

less likely to require a wide variety of benefits

4. Provider panels can be either narrow or broad. Compared to a similarly sized health plan that uses a broad provider panel, a health plan that uses a narrow provider panel most likely can expect to

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5.

experience higher contracting costs

encounter increased difficulty in utilization management

have to charge higher health plan premiums

experience lower provider relations costs

5. The following statements are about factors that health plans should consider as they develop provider networks in rural and urban markets. Three of the statements are true, and one of the statements is false. Select the answer choice that contains the FALSE statement.

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6.

Compared to providers in urban areas, providers in rural areas are less likely to offer discounts to health plans in exchange for directed patient volume. In urban areas, limiting the number of specialists on a panel usually affects the network’s market appeal more than does limiting the number of primary care physicians. The greatest opportunity to create competition in rural areas is among the specialty providers in other nearby communities. Typically, hospital contracting is easier in urban areas than in rural areas.

6. Lakesha Frazier, a member of a health plan in a rural area, had been experiencing heart palpitations and shortness of breath. Ms. Frazier’s primary care provider (PCP) referred her to a local hospital for an electrocardiogram. The results of the electrocardiogram were transmitted for diagnosis via high-speed data transmission to a heart specialist in a city 500 miles away. This information indicates that the results of Ms. Frazier’s electrocardiogram were transmitted using a communications system known as

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7.

a narrow network

an integrated healthcare delivery system

telemedicine

customized networking

7. A population’s demographic factors—such as income levels, age, gender, Go toquestion














race, and ethnicity—can influence the design of provider networks serving that population. With respect to these demographic factors, it is correct to say that

8.

higher-income populations have a higher incidence of chronic illnesses than do lowerincome populations compared to other groups, young men are more likely to be attached to particular providers a population with a high proportion of women typically requires more providers than does a population that is predominantly male Health plans should not recognize, in either the design of networks or the evaluation of provider performance, racial and ethnic differences in the member population

8. In developing a provider network in an large city with a high concentration of young families, the Gypsum Health Plan has set goals focused on the needs of that particular market. The following statements are about this situation. Three of the statements are true, and one of the statements is false. Select the answer choice that contains the FALSE statement.

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Gypsum should attempt to recruit providers who offer extended office hours. Gypsum can use the cost-effectiveness of its own existing networks as a benchmark for its cost-savings goals in this market.

Gypsum will most likely attempt to contract with HMOs.

Gypsum most likely should set lower cost-savings goals in this market than it would in a rural market with few young families.

>---------- End of the Test ----------<

1 A2 A3 B4 D5 B6 C7 C8 D

Reading 2B: Considerations for the Structure, Composition, and Size of the Network

Explain how a network-within-a-network approach can benefit a health plan with more than one product in a market Explain the difference between primary care HMOs and open access HMOs List several sources of laws, regulations, or guidelines on network access and adequacy Explain how a tiered network helps a health plan address the cost-access trade-off that health plans typically

encounter when setting the size of the provider panel

Describe the "build or buy" decision for networks and list some reasons why a health plan might lease a network or outsource development of a network

Instructions: 1. Select or enter the best answer for each of the 7 questions.




2. Answer all the questions. Remember to scroll down if necessary.


1. The Gardenia Health Plan has a national reputation for quality care. When Gardenia entered a new market, it established a preferred provider organization (PPO), a health maintenance organization (HMO), and a point-of-service product (POS) to serve the plan members in this market. All of the providers included in the HMO or the POS are included in the broader provider panel of the PPO. The POS will be a typical two-level POS that offers a cost-based incentive plans for PCPs, and the HMO is a typical staff model HMO.

The network strategy that Gardenia is using to establish its range of healthcare plans is known as the

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2.

network-within-a-network approach

gatekeeper approach

tiered network approach

preferred tier approach

2. The Gardenia Health Plan has a national reputation for quality care. When Gardenia entered a new market, it established a preferred provider organization (PPO), a health maintenance organization (HMO), and a point-of-service product (POS) to serve the plan members in this market. All of the providers included in the HMO or the POS are included in the broader provider panel of the PPO. The POS will be a typical two-level POS that offers a cost-based incentive plans for PCPs, and the HMO is a typical staff model HMO.

The following statement(s) can correctly be made about Gardenia’s establishment of the PPO and the staff model HMO in its new market:

1. When establishing its PPO network, Gardenia most likely initiated outcomes measurement tools and developed collaborative process improvement relationships with providers.

2. To avoid high overhead expenses in the early stages of market evelopment, Gardenia’s HMO most likely contracted with specialists and ancillary providers until the plan’s membership grew to a sufficient level to justify employing these specialists.

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3.

Both 1 and 2

Neither 1 nor 2

1 Only

2 Only

3. The Gardenia Health Plan has a national reputation for quality care. When Gardenia entered a new market, it established a preferred provider organization (PPO), a health maintenance organization (HMO), and a point-of-service product (POS) to serve the plan members in this market. All of the

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4.










providers included in the HMO or the POS are included in the broader provider panel of the PPO. The POS will be a typical two-level POS that offers a cost-based incentive plans for PCPs, and the HMO is a typical staff model HMO.

One statement that can correctly be made about Gardenia’s two-level POS product is that

members who self-refer without first seeing their PCPs will receive no benefits both Gardenia and the PCPs stand to benefit if the non-provider panels are kept relatively narrow members will pay higher coinsurance or copayments if they first see their PCPs each time the plan offers no financial incentives to members to choose an in-network specialist over a non-network specialist

4. Health plans are required to follow several regulations and guidelines regarding the access and adequacy of their provider networks. The Federal Employee Health Benefits Program (FEHBP) regulations, for example, require that health plans

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5.

allow members direct access to OB/GYN services

allow members direct access to prescription drug services

provide access to Title X family-planning clinics

provide average office waiting times of no more than 30 minutes for appointments with plan providers

5. Some jurisdictions have enacted corporate practice of medicine laws. One effect that corporate practice of medicine laws have had on HMO provider networks is that these laws typically

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6.

require incorporated HMOs to practice medicine through licensed employees require HMOs to form exclusive contracts with physician groups who agree to dedicate all or most of their practices to HMO patients in return for a set payment or revenue-sharing restrict the ability of staff model HMOs to hire physicians directly, unless the physicians own the HMO encourage incorporated HMOs to obtain profits from their provisions of physician professional services

6. The actual number of providers included in a provider network may be based on staffing ratios. Staffing ratios relate the number of

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7.

potential providers in a plan’s network to the number of individuals in the area to be served by the plan

providers in a plan’s network to the number of enrollees in the plan

providers outside a plan’s network to the number of providers in the plan’s network support staff in a plan’s network to the number of medical practitioners in the plan’s network










7. Before incurring the expense of assembling a new PPO network, the Protect Health Plan conducted a cost analysis in order to determine the cost-effectiveness of renting an existing PPO network instead. In calculating the overall cost of renting the network, Protect assumed a premium of $2.52 per member per month (PMPM) and estimated the total number of members to be 9,000. This information indicates that Protect would calculate its annual network rental cost to be

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$42,857

$56,700

$272,160

$680,400

>---------- End of the Test ----------<1 A2 D3 D4 D5 C6 B7 C



Reading 2C: Delegation of Network Management Activities

Define delegation and sub-delegation Explain the difference between "authority" and "accountability" with regard to delegation List some reasons why health plans sometimes delegate activities Identify and describe the steps in the delegation process

Describe the primary requirements of the National Committee for Quality Assurance (NCQA) and the American Accreditation HealthCare Commission (the Commission/URAC) for demonstrating appropriate oversight of credentialing delegation



1. The Aegean Health Plan delegated its utilization management (UM) program to the Silhouette IPA. Silhouette, in turn, transferred authority for case management to Brandon Health Services. In this situation, Brandon is best described as the

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2.

delegator, and Aegean is ultimately responsible for Brandon’s performance delegator, and Silhouette is ultimately responsible for Brandon’s performance subdelegate, and Aegean is ultimately responsible for Brandon’s performance subdelegate, and Silhouette is ultimately responsible for Brandon’s performance

2. Although a health plan is allowed to delegate many activities to outside sources, the National Committee for Quality Assurance (NCQA) has determined that some activities are not delegable.These activities include

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3.

evaluation of new medical technologies

overseeing delegated medical records activities

developing written statements of members’ rights and responsibilities

all of the above

3. The Brice Health Plan submitted to Clarity Health Services a letter of intent indicating Brice’s desire to delegate its demand management function to Clarity. One true statement about this letter of intent is that it

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creates a legally binding relationship between Brice and Clarity

most likely contains a confidentiality clause committing Brice and Clarity to maintain the confidentiality of documents reviewed and exchanged in the process prohibits Clarity from performing similar delegation activities for other health plans most likely contains a detailed description of the functions that Brice will









delegate to Clarity

>---------- End of the Test ----------<1 C2 D3 B

Assignment 3: Selecting Network Providers

Reading 3A: Identifying and Recruiting Providers for a Health Plan Network

List and describe the types of providers included in the most managed care networks Discuss the factors that a health plan considers when identifying potential network hospitals and practitioners Explain the advantages and disadvantages of health plan contracting with individual practitioners and provider

organizations

Discuss the methods that health plans may use to recruit candidates for their provider networks



1. The following statements are about the specialist component of a provider panel. Select the answer choice containing the correct statement.

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2.

Ideally, a health plan should have every specialist category represented on its provider panel with appropriate geographic distribution. Most specialist contracts do not ensure the provider’s adherence to UM policies set up by the health plan. No-balance-billing clauses are not desirable in health plan contracts with specialists. In geographic regions where there is a shortage of PCPs, a health plan is not permitted to contract with specialists to perform primary care services, even for patients with chronic conditions.

2. In contracting with providers, a health plan can use a closed panel or open panel approach. One statement that can correctly be made about an open panel health plan is that the participating providers

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3.

must be employees of the health plan, rather than independent contractors are prohibited from seeing patients who are members of other health plans

typically operate out of their own offices

operate according to their own standards of care, rather than standards of care established by the health plan

3. In open panel contracting, there are several types of delivery systems. One such delivery system is the faculty practice plan (FPP). One likely result that a health plan will experience by contracting with an FPP is that the health plan will

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4.

be able to select most of the physicians in the FPP

achieve the highest level of cost effectiveness possible

experience limited control over utilization

achieve the most effective case management possible










4. The following statement(s) can correctly be made about hospitalists.

1. The hospitalist’s main function is to coordinate diagnostic and treatment activities to ensure that the patient receives appropriate care while in the hospital.

2. The hospitalist’s role clearly supports the health plan concept of disease management.

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5.

Both 1 and 2

1 only

2 only

Neither 1 nor 2

5. Salvatore Arris is a member of the Crescent Health Plan, which provides its members with a full range of medical services through its provider network. After suffering from debilitating headaches for several days, Mr. Arris made an appointment to see Neal Prater, a physician’s assistant in the Crescent network who provides primary care under the supervision of physician Dr. Anne Hunt. Mr. Prater referred Mr. Arris to Dr. Ginger Chen, an ophthalmologist, who determined that Mr. Arris’ symptoms were indicative of migraine headaches. Dr. Chen prescribed medicine for Mr. Arris, and Mr. Arris had the prescription filled at a pharmacy with which Crescent has contracted. The pharmacist, Steven Tucker, advised Mr. Arris to take the medicine with food or milk. In this situation, the person who functioned as an ancillary service provider is

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6.

Mr. Prater

Dr. Hunt

Dr. Chen

Mr. Tucker

6. Open panel health plans can contract with individual providers or with various provider groups when developing their networks. The following statements are about factors that an open panel health plan might consider in contracting with different types of provider organizations. Select the answer choice that contains the correct statement.

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7.

One limitation of contracting with multispecialty groups is that a health plan obtains only specialty consultants, but not PCPs. One benefit to a health plan in contracting with an integrated delivery system (IDS) is the ability to have a network in rapid order and to enter into a new market or one that is already competitive. A health plan that contracts with an individual practice association (IPA) has a greater ability to select and deselect individual physicians than when contracting directly with the providers. A health plan that contracts with an IDS is able to eliminate the antitrust risk that exists when contracting with an IPA.

7. Health plans use a variety of sources to find candidates to recruit for their provider networks. In general, two of the most effective methods of finding

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candidates are through

word of mouth and on-site training programs

word of mouth and direct mail

advertisements in local newspapers and on-site training programs

advertisements in local newspapers and direct mail

>---------- End of the Test ----------<1 A2 C3 C4 B5 D6 B7 B

Reading 3B: Collecting and Verifying Data for Credentialing Purposes

Explain the data collection and verification processes used in credentialing and describe their importance to a health plan's selection of network physicians

Describe the role played in data collection and verification by: American Board of Medical Specialties (ABMS) Federation of State medical Boards National Practitioner Data Bank (NPDB) Healthcare Integrity and Protection Data Bank (HIPDB) provider profiling Explain the liability issues involved with credentialing decisions, including: requirements of the Americans with

Disabilities Act (ADA), confidentiality, vicarious liability, violation of due process, and negligent credentialing Describe how and why health plans delegate credentials verification to third parties

Describe the data collection and verification services provided by hospitals and medical facilities, Physician Organization Certification (POC) program, and credentials verification organizations (CVOs)



1. During the credentialing process, a health plan verifies the accuracy of information on a prospective network provider’s application. One true statement regarding this process is that the health plan

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2.

has a legal right to access a prospective provider’s confidential medical records at any time must limit any evaluations of a prospective provider’s office to an assessment of quantitative factors, such as the number of double-booked appointments a physician accepts at the end of each day is prohibited by law from conducting primary verification of such data as a prospective provider’s scope of medical malpractice insurance coverage and federal tax identification number must complete the credentialing process before a provider signs the network contract or must include in the signed document a provision that the final contract is contingent upon the completion of the credentialing process

2. The Festival Health Plan is in the process of recruiting physicians for its provider network. Festival requires its network physicians to be board certified. The following individuals are provider applicants whose qualifications are being considered:

Applicant 1 has completed his surgical residency, and he recently passed a qualifying examination in his field.

Applicant 2 has completed her residency in dermatology, and she is scheduled to take qualifying examinations in the next Six months.

Applicant 3 completed his residency in pediatric medicine six years ago, but he has not yet passed a qualifying examination in his field.

With regard to these applicants, it can correctly be stated that only

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3.







Applicants 1 and 2 are board certified

Applicants 2 and 3 are board certified

Applicant 1 is board certified

Applicant 3 is board certified

3. The Justice Health Plan is eligible to submit reportable actions against medical practitioners to the National Practitioner Data Bank (NPDB). Justice is considering whether it should report the following actions to the NPDB:

Action 1—A medical malpractice insurer made a malpractice payment on behalf of a dentist in Justice’s network for a complaint that was settled out of court.

Action 2—Justice reprimanded a PCP in its network for failing to follow the health plan’s referral procedures.

Action 3—Justice suspended a physician’s clinical privileges throughout the Justice network because the physician’s conduct adversely affected the welfare of a patient.

Action 4—Justice censured a physician for advertising practices that were not aligned with Justice’s marketing philosophy.

Of these actions, the ones that Justice most likely must report to the NPDB include Actions

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4.

1, 2, and 3 only

1 and 3 only

2 and 4 only

3 and 4 only

4. The NPDB specifies the entities that are eligible to request information from the data bank, as well as the conditions under which requests are allowed. In general, entities that are eligible to request information from the NPDB include

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5.

medical malpractice insurers and the general public

medical malpractice insurers and professional societies that are screening applicants for membership

the general public and state licensing boards

state licensing boards and professional societies that are screening applicants for membership

5. Participating providers in a health plan’s network must undergo recredentialing on a regular basis. During recredentialing, a health plan typically reviews

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6.

a provider’s current, updated application information, as well as provider’s peer reviews and performance reports on the provider










a provider’s current, updated application information, as well as the provider’s education and prior work history

a provider’s education and prior work history only

peer reviews and performance reports on a provider and the provider’s prior work history only

6. With respect to hiring practices, one step that a health plan most likely can take to avoid violating the terms of the Americans with Disabilities Act (ADA) is to

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7.

require a medical examination prior to accepting an application for employment include in the employment application questions pertaining to health status make a conditional offer of employment, and then require the candidate to have an examination prior to granting specific staff privileges require applicants to answer questions pertaining to the use of drugs and alcohol

7. Determine whether the following statement is true or false:

The NCQA has established a Physician Organization Certification (POC) program for the purpose of certifying medical groups and independent practice associations for delegation of certain NCQA standards, including data collection and verification for credentialing and recredentialing.

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8.

True

False

8. For this question, if answer choices (A) through (C) are all correct, select answer choice (D). Otherwise, select the one correct answer choice. A credentials verification organization (CVO) can be certified to verify certain pertinent credentialing information, including

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liability claims histories of prospective providers

hospital privileges of prospective providers

malpractice insurance on prospective providers

all of the above

>---------- End of the Test ----------<1 D2 C3 B4 D5 A6 C7 A8 D









Assignment 4: Provider Contracting: Part One

Reading 4A: The Provider Contract

Explain why health plans enter into legal contracts with providers Describe the essentials elements of a contractual relationship Identify the differences and similarities between a comprehensive and a brief provider contract Describe the major elements in a comprehensive contract

Discuss the goals that a health plan may try to reach through its contractual strategies



1. The introductory paragraph of a provider contract is generally followed by a section called the recitals. The recitals section of the contract typically specifies the

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2.

purpose of the agreement

manner in which the provider is to bill for services

definitions of key terms to be used in the contract

rate at which the provider will be compensated

2. 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

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3.

consistent with the symptoms of diagnosis

furnished in the least intensive type of medical care setting required by the member’s condition

in compliance with the standards of good medical practice

all of the above

3. 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

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4.

medical necessity standard

prudent layperson standard










“all-or-none” standard

reasonable and customary standard

4. 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.

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5.

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. Because the provider manual is part of the contract, Ocelot must make sure that its provider manual is comprehensive and up-to-date. 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. 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.

5. 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

Go toquestion

6.

provisions for marketing the plan’s product

payment arrangements between the plan and the provider

verification of the plan’s eligibility to do business

management of the contents of members’ medical records

6. 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

Go toquestion

7.

most-favored- nation arrangement

a limit on action

a consideration

an assignment

7. Dr. Eve Barlow is a specialist in the Amity Health Plan’s provider network. Dr. Barlow’s provider contract with Amity contains a typical most-favored-nation arrangement. The purpose of this arrangement is to

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require Dr. Barlow and Amity to use arbitration to resolve any disputes regarding the contract specify that the contract is to be governed by the laws of the state in which Amity has its headquarters












require Dr. Barlow to charge Amity her lowest rate for a medical service she has provided to an Amity plan member, even if the rate is lower than the price negotiated in the contract state that the contract creates an employment or agency relationship, rather than an independent contractor relationship, between Dr. Barlow and Amity

>---------- End of the Test ----------<1 A2 D3 B4 B5 B6 D7 C

Reading 4B: The Negotiation Process for Provider Contracting

List some circumstances that may result in renegotiation of a provider contract List and describe some of the functions that are often represented on health plan and provider negotiating teams Describe some types of information that the health plan typically seeks about a provider, and vice versa, when

preparing for provider contract negotiation

Describe the process for setting objectives for negotiation



1. Health plan contract negotiations with an integrated delivery system (IDS) or a hospital are usually lengthier and more complex than negotiations with a single-specialty provider.

Go toquestion

2.

True

False

2. An health plan’s contract negotiation team consists of several skilled individuals from different areas. At least one of the members is responsible for evaluating the wording of specific clauses to ensure that the health plan’s rights are protected, as well as to ensure that the contract is in compliance with state and federal regulation. By profession, this member of the contract negotiation team is typically

Go toquestion

3.

a medical director

an attorney

a financial manager

a claims manager

3. The following statements are about the negotiation process of provider contracting. Three of the statements are true and one of the statements is false. Select the answer choice containing the FALSE statement.

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While preparing for negotiations, the health plan usually sends the provider an application to join the provider network, a list of credentialing requirements, and a copy of the proposed provider contract, which may or may not include the proposed reimbursement schedule. In general, the ideal negotiating style for provider contracting is a collaborative approach. Typically, the health plan and the provider negotiate the reimbursement arrangement between the parties before they negotiate the scope of services and the contract language. The actual signing of the provider contract typically takes place after negotiations are completed.

>---------- End of the Test ----------<1 A









2 B3 C

Assignment 5: Provider Contracting: Part Two

Reading 5A: Responsibilities of health plans and Providers Under Provider Contracts

Describe a low-enrollment guarantee clause and explain how health plans use low-enrollment guarantee clauses in capitated contracts

Explain two situations in which health plans modify existing provider contracts and two methods of modification Describe the issues about physician/patient communication that may be of concern to providers List several reasons why a contract with a primary care provider should describe the scope of service in detail List and describe three types of termination clauses

Explain the role of the due process clause in the termination of providers



1. The following statements are about some of the issues surrounding the contractual responsibilities of health plans. Select the answer choice containing the correct statement.

Go toquestion

2.

Typically, health plans are required to pay completed claims within 10 days of submission. health plans typically are prohibited from examining the financial soundness of a self-funded employer plan that relies on the health plan to pay providers for services received by the plan’s members. Patient delivery is one of the most significant factors that health plans consider when determining whether provider services should be reimbursed on a capitated or fee-for-service (FFS) basis. health plans require all providers to agree to an exclusive provider contract.

2. From the following answer choices, choose the type of clause or provision described in this situation.

The Idlewilde Health Plan includes in its provider contracts a clause or provision that allows the terms of the contract to renew unchanged each year.

Go toquestion

3.

Cure provision

Hold-harmless provision

evergreen clause

Exculpation clause


The provider contract between Dr. Olin Norquist and the Granite Health Plan specifies a time period for the party who has breached the contract to remedy the problem and avoid termination of the contract.

Go toquestion

4.

Cure provision











Evergreen clause

Exculpation clause


The Aviary Health Plan includes in its provider contracts a clause or provision that places the ultimate responsibility for an Aviary plan member’s medical care on the provider.

Go toquestion

5.

Cure provision


Evergreen clause

Exculpation clause

5. The following statements are about the responsibilities that providers are expected to assume under most provider contracts with health plans. Select the answer choice containing the correct statement.

Go toquestion

6.

All health plans now include in their provider contracts a statement that explicitly places responsibility for the medical care of plan members on the health plan rather than on the provider. According to the wording of most provider contracts, the responsibility of providers to deliver medical services to a plan member is not contingent upon the provider’s receipt of information regarding the member’s eligibility for these services. Most health plans include in their provider contracts a clause which requires providers to maintain open communication with plan members regarding appropriate treatment plans, even if the services are not covered by the member’s health plan. Most provider contracts require participating providers to discuss health plan payment arrangements with patients who are covered by the plan.

6. With respect to contractual provisions related to provider-patient communications, nonsolicitation clauses prohibit providers from

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7.

encouraging patients to switch from one health plan to another

disclosing confidential information about the health plan’s reimbursement structure

dispersing confidential financial information regarding the health plan

discussing alternative treatment plans with patients

7. The provider contract that Dr. Huang Kwan has with the Poplar Health Plan includes a typical scope of services provision. The medical service that Dr. Kwan provided to Alice Meyer, a Poplar plan member, is included in the scope of services. The following statement(s) can correctly be made about this particular medical service:

A. Dr. Kwan most likely was required to seek authorization from Poplar

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8.













before performing this particular service.

B. Dr. Kwan most likely was paid on a FFS basis for providing this service.

Both A and B

A only

B only

Neither A nor B

8. If a third party is responsible for injuries to a plan member of the Hope Health Plan, then Hope has a contractual right to file a claim for the resulting healthcare costs against the third party. This contractual right to recovery from the third party is known as

Go toquestion

9.

subrogation

partial capitation

coordination of benefits

a remedy provision

9. The Octagon Health Plan includes a typical indemnification clause in its provider contracts. The purpose of this clause is to require Octagon’s network providers to

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10.

agree not to sue or file claims against an Octagon plan member for covered services reimburse Octagon for costs, expenses, and liabilities incurred by the health plan as a result of a provider’s actions

maintain the confidentiality of the health plan’s proprietary information

agree to accept Octagon’s payment as payment in full and not to bill members for anything other than contracted copayments, coinsurance, or deductibles

10. The provider contract between the Regal Health Plan and Dr. Caroline Quill contains a type of termination clause known as termination without cause. One true statement about this clause is that it

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requires Regal to send a report to the appropriate accrediting agency if the health plan terminates Dr. Quill’s contract without cause requires that Regal must base its decision to terminate Dr. Quill’s contract on clinical criteria only allows either Regal or Dr. Quill to terminate the contract at any time, without any obligation to provide a reason for the termination or to offer an appeals process allows Regal to terminate Dr. Quill’s contract at the time of contract renewal only, without any obligation to provide a reason for the termination or to offer an appeals process

>---------- End of the Test ----------<1 C









2 C3 A4 D5 C6 A7 D8 A9 B10 C

Reading 5B: Compensation Arrangements Between health plans and Providers

Explain how an MCO transfers financial risk to providers through reimbursement arrangements Describe the primary advantages and disadvantages of fee-for-service, salary, and capitation payment systems List and describe four types of capitation Explain how health plans use incentives in compensation arrangements List and describe four ways to manage a provider's financial risk

Describe some factors that influence the way a health plan compensates its providers



1. The Ross Health Plan compensates Dr. Cecile Sanderson on a FFS basis. In order to increase the level of reimbursement that she would receive from Ross, Dr. Sanderson submitted the code for a comprehensive office visit. The services she actually provided represented an intermediate level of service. Dr. Sanderson’s action is an example of a type of false billing procedure known as

Go toquestion

2.

cost shifting

churning

unbundling

upcoding

2. The Sweeney Health Plan uses the discounted fee-for-service (DFFS) method to compensate some of its providers. Under this method of compensation, Sweeney calculates payments based on

Go toquestion

3.

the standard fees of indemnity health insurance plans, adjusted by region the Medicare fee schedules used by other health plans, adjusted by region

whichever amount is higher, the billed charge or the DFFS amount

whichever amount is lower, the billed charge or the DFFS amount

3. One type of fee schedule payment system assigns a weighted unit value for each medical procedure or service based on the cost and intensity of that service. Under this system, the unit values for procedural services are generally higher than the unit values for cognitive services. This system is known as a

Go toquestion

4.

wrap-around payment system

relative value scale (RVS) payment system

resource-based relative value scale (RBRVS) system

capped fee system










4. One true statement about the compensation arrangement known as the case rate system is that, under this system,

Go toquestion

5.

providers stand to gain or lose based on the number and types of treatments used for each case providers have no incentives to take an active role in managing cost and utilization payors cannot adjust standard case rates to reflect the severity of the patient’s condition or complications that arise from multiple medical problems

payors have the opportunity to benefit from the provider’s cost savings

5. Health plans often negotiate compensation arrangements that transfer some or all of the financial risk associated with delivering healthcare services to network providers. The following statements are about these compensation arrangements. Select the answer choice containing the correct statement.

Go toquestion

6.

A per diem system typically places a healthcare facility at risk for controlling utilization and costs internally. One likely reason that an health plan would use a fee schedule system to compensate providers is that this system transfers most of the financial risk to the provider.

Under a salary system, a provider assumes no service risk.

The use of a FFS or a salary system allows an health plan to transfer a greater proportion of financial risk to providers than does the use of capitation.

6. An health plan enters into a professional services capitation arrangement whenever the health plan

Go toquestion

7.

contracts with a medical group, clinic, or multispecialty IPA that assumes responsibility for the costs of all physician services related to a patient’s care pays individual specialists to provide only radiology services to all plan members transfers all financial risk for healthcare services to a provider organization and the provider, in turn, covers virtually all of a patient’s medical expenses contracts with a primary care provider to cover primary care services only

7. The following statements are about incentive programs used for providers. Select the answer choice containing the correct statement.

Go toquestion

8.

Risk pools based on aggregate provider performance eliminate problems associated with “free riders.” A hospital bonus pool is usually split between the health plan and the PCPs. Bonus pools based on the performance of specific providers are usually easier to administer than those based on the performance of the plan as a whole. For providers, withhold arrangements eliminate the risk of losing base income.













8. To protect providers against business losses, many health plan-provider contracts include carve-out provisions to help providers manage financial risk. The following statements are examples of such provisions.

The Apex Health Plan carves out immunizations from PCP capitations. Apex compensates PCPs for immunizations on a case rate basis.

The Bengal Health Plan carves out behavioral healthcare services from the scope of PCP services because these services require specialized knowledge and skills that most PCPs do not possess.

From the answer choices below, select the response that best identifies the types of carve-outs used by Apex and Bengal.

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9.

Apex: disease-specific carve-out Bengal: specialty services carve-out Apex: disease-specific carve-out Bengal: specific-service carve-out Apex: specific-service carve-outBengal: specialty services carve-out Apex: specific-service carve-outBengal: disease-specific carve-out

9. The Athena Medical Group has purchased from the Corinthian Insurance Company individual stop-loss insurance coverage for primary and specialty care services with a $5,000 attachment point and 10 percent coinsurance. One of Athena’s patients accrued $8,000 of medical costs for primary and specialty care treatment. In this situation, Athena will be responsible for paying an amount equal to

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10.

$300, and Corinthian is obligated to reimburse Athena in the amount of $2,700 $2,700, and Corinthian is obligated to reimburse Athena in the amount of $5,300 $5,300, and Corinthian is obligated to reimburse Athena in the amount of $2,700 $7,700, and Corinthian is obligated to reimburse Athena in the amount of $300

10. The Ionic Group, a provider group with 10,000 plan members, purchased for its hospital risk pool aggregate stop-loss insurance with a threshold of 110% of projected costs and a 10% coinsurance provision. Ionic funds the hospital risk pool at $40 per member per month (PMPM). If Ionic’s actual hospital costs are $5,580,000 for the year, then, under the aggregate stop-loss agreement, the stop-loss insurer is responsible for reimbursing Ionic in the amount of

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$30,000

$270,000

$300,000

$702,000

>---------- End of the Test ----------<1 D









2 D3 B4 A5 A6 A7 B8 C9 C10 B

Assignment 6: Network Management Considerations for Different Types of Providers

Reading 6A: Strategies for the Specialist Component of the Provider Network

Describe some of the challenges health plans face when contracting with hospital-based specialists Describe the different reimbursement options that health plans typically use for specialists

Discuss some common problems that health plans encounter when using capitation for specialty care



1. The method that the Autumn Health Plan uses for reimbursing dermatologists in its provider network involves paying them out of a fixed pool of funds that is actuarially determined for this specialty. The amount of funds that Autumn allocates to dermatologists is based on utilization and costs of services for that discipline.

Under this reimbursement method, a dermatologist who is under contract to Autumn accumulates one point for each new referral made to the specialist by Autumn’s PCPs. If the referral is classified as complicated, then the dermatologist receives 1.5 points. The value of Autumn’s dermatology services fund for the first quarter was $15,000. During the quarter, Autumn’s PCPs made 90 referrals, and 20 of these referrals were classified as complicated.

Autumn’s method of reimbursing specialty providers can best be described as a

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2.

disease-specific arrangement

contact capitation arrangement

risk adjustment arrangement

withhold arrangement

2. The method that the Autumn Health Plan uses for reimbursing dermatologists in its provider network involves paying them out of a fixed pool of funds that is actuarially determined for this specialty. The amount of funds that Autumn allocates to dermatologists is based on utilization and costs of services for that discipline.

Under this reimbursement method, a dermatologist who is under contract to Autumn accumulates one point for each new referral made to the specialist by Autumn’s PCPs. If the referral is classified as complicated, then the dermatologist receives 1.5 points. The value of Autumn’s dermatology services fund for the first quarter was $15,000. During the quarter, Autumn’s PCPs made 90 referrals, and 20 of these referrals were classified as complicated.

In determining the first quarter payment to dermatologists, Autumn would

Go toquestion

3.







accurately calculate the value of each referral point to be

$111.11

$125.00

$150.00

$166.67

3. Dr. Janet Dubois is a radiologist who practices exclusively at the Rightway Healthcare Center. This information indicates that Dr. Dubois is employed by Rightway as

Go toquestion

4.

an academic practitioner

an independent practitioner

a network manager

a hospital-based specialist

4. Promise, Inc., a corporation that specializes in cancer services, employs its physicians and support staff and provides facilities and ancillary services for cancer patients. Promise has contracted with the Cordelia Health Plan to provide all specialty services for Cordelia plan members who are undergoing cancer treatment. In return, Promise receives a capitated amount from Cordelia. Promise is an example of a type of specialty services organization known as a

Go toquestion

5.

specialty IPA

disease management company

single specialty management specialist

specialty network management company

5. If the Oconee Health Plan reimburses its specialty care physicians (SCPs) under a typical retainer method, then Oconee pays SCPs

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a separate amount for each service provided, and the payment amount is based solely on a resource-based relative value scale (RBRVS) a specified fee that remains the same regardless of how much or how little time or effort is spent on the medical service performed a set amount each month, and Oconee reconciles its payment at periodic intervals on the basis of actual utilization a set amount of cash equivalent to a defined time period’s expected reimbursable charges

>---------- End of the Test ----------<1 B2 C3 D4 B5 C









Reading 6B: Strategies for Contracting with Hospitals and Subacute Care Facilities

Explain why health plans sometimes contract with centers of excellence List issues that a health plan considers when selecting a center of excellence List and describe methods that health plans commonly use to reimburse hospitals for inpatient and outpatient

services Define ambulatory payment classifications (APCs) and compare this system to diagnosis-related groups (DRGs)

Explain why health plans contract with facilities for subacute care and describe the main criteria for selecting subacute care providers



1. One reimbursement method that health plans can use for hospitals is the ambulatory payment classifications (APCs) method. APCs bear a resemblance to the diagnosis-related groups (DRGs) method of reimbursement. However, when comparing APCs and DRGs, one of the primary differences between the two methods is that only the APC method

Go toquestion

2.

is typically used for outpatient care

assigns a single code for treatment

applies to treatment received during an entire hospital stay

is considered to be a retrospective payment system

2. Four types of APCs are ancillary APCs, medical APCs, significant procedure APCs, and surgical APCs. An example of a type of APC known as

Go toquestion

3.

an ancillary APC is a biopsy

a medical APC is radiation therapy

a significant procedure APC is a computerized tomography (CT) scan

a surgical APC is an emergency department visit for cardiovascular disease

3. The Gladspell HMO has contracted with the Ellysium Hospital to provide subacute care to its plan members. Gladspell pays Ellysium by using a per diem reimbursement method.

The per diem reimbursement method will require Gladspell to pay Ellysium a

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4.

fixed rate for each day a plan member is treated in Ellysium’s subacute care facility

discounted charge for all subacute care services given by Ellysium

rate that varies depending on patient category

fixed rate per enrollee per month

4. The Gladspell HMO has contracted with the Ellysium Hospital to provide Go toquestion












subacute care to its plan members. Gladspell pays Ellysium by using a per diem reimbursement method.

If Gladspell’s per diem contract with Ellysium is typical, then the per diem payment will cover such medical costs as

5.

laboratory tests

respiratory therapy

semiprivate room and board

radiology services

5. The Gladspell HMO has contracted with the Ellysium Hospital to provide subacute care to its plan members. Gladspell pays Ellysium by using a per diem reimbursement method.

If the Ellysium subacute care unit is typical of most hospital-based subacute skilled nursing units, then this unit could be used for patients who no longer need to be in the hospital’s acute care unit but who still require

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daily medical care and monitoring

regular rehabilitative therapy

respiratory therapy

all of the above

>---------- End of the Test ----------<1 A2 C3 A4 C5 D




Reading 6C: Pharmacy Networks

Describe the advantages early pharmacy networks had over direct pay and cost-sharing pharmacy systems Identify the features that distinguish pharmacy networks from other health plan networks Describe the impact of pharmacy benefits management in managed care Explain the advantages and disadvantages of maintaining in-house management of pharmacy benefits or

outsourcing benefits through a pharmacy benefit management company (PBM) Describe the options available for delivering pharmacy services

Identify the methods that health plans and PBMs use to reimburse network pharmacies



1. The method of pharmaceutical reimbursement under which a plan member obtains prescription drugs from participating network pharmacies by presenting proper identification and paying a specified copayment is the

Go toquestion

2.

wholesale acquisition cost (WAC) approach

reimbursement approach

service approach

cognitive approach

2. In most health plan pharmacy networks, the cost component of the reimbursement formula is based on the average wholesale price (AWP). One true statement about the AWP for prescription drugs is that

Go toquestion

3.

AWPs tend to vary widely from region to region of the United States

the AWP is often substantially higher than the actual price the pharmacy pays for prescription drugs a health plan’s contracted reimbursement to a pharmacy for prescription drugs is typically the AWP plus a percentage, such as 5% the AWP usually is lower than the estimated acquisition cost (EAC) for most prescription drugs

3. In the paragraph below, two statements each contain a pair of terms enclosed in parentheses. Determine which term correctly completes each statement. Then select the answer choice that contains the two terms you have chosen.

A formulary lists the drugs and treatment protocols that are considered to be the preferred therapy for a given managed population. The Fairfax Health Plan uses the type of formulary which covers drugs that are on its preferred list as well as drugs that are not on its preferred list. This information indicates that Fairfax uses the (closed / open) formulary method. In using the formulary approach to pharmacy benefits management, Fairfax most likely experiences (higher / lower) costs for its members’ prescription drugs than it would if it did not use a formulary.

Go toquestion

4.

closed / higher










closed / lower

open / higher

open / lower

4. The following statements are about the inclusion of unified pharmacy benefits in health plan healthcare packages. Select the answer choice containing the correct statement.

Go toquestion

5.

When pharmacy benefits management is incorporated into an health plan’s operations as a unified benefit, the health plan establishes pharmacy networks, but a pharmacy benefits management (PBM) company manages their operations. Under a unified pharmacy benefit, an health plan cannot use mail-order services to provide drugs to its members. Compared to programs that do not manage pharmacy benefits in-house, unified pharmacy benefits programs typically give health plans more control over patient access to prescription drugs. Compared to programs that do not manage pharmacy benefits in-house, unified pharmacy benefits programs make drug therapy interventions for plan members more difficult.

5. The following statements can correctly be made about the advantages and disadvantages to an health plan of using the various delivery options for pharmacy services.

Go toquestion

6.

A disadvantage of using open pharmacy networks is that the health plan’s control over costs is limited to setting reimbursement levels. An advantage of using performance-based systems is that they tend to increase participation in the health plan’s pharmacy network. A disadvantage of using customized pharmacy networks is that these networks typically can be implemented only in companies with fewer than 500 employees.

All of these statements are correct.

6. The Walton Health Plan uses the fee-for-service pharmaceutical reimbursement approach known as the maximum allowable cost (MAC) method. If Walton’s MAC list specifies a cost of 8 cents per tablet for a particular drug but the participating pharmacy pays 10 cents per tablet for the drug, then Walton will be obligated to reimburse the pharmacy for

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7.

8 cents per tablet, but the pharmacy can bill the subscriber for the remaining 2 cents per tablet 8 cents per tablet, and the pharmacy cannot bill the subscriber for the remaining 2 cents per tablet 10 cents per tablet, but the pharmacy must refund the extra 2 cents per tablet to the subscriber 10 cents per tablet, and the pharmacy is not required to refund the extra 2 cents per tablet to the subscriber

7. One reason that an health plan would want to use the actual acquisition cost (AAC) pricing system to calculate its drug costs is that, of the systems commonly used to calculate drug costs, the AAC system

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provides the lowest level of cost for the health plan

most closely represents what pharmacies are actually charged for prescription drugs

offers the best control over multiple-source pharmaceutical products

is the least expensive pricing system for the health plan to implement

>---------- End of the Test ----------<1 C2 B3 D4 C5 A6 B7 A

Reading 6D: Considerations and Strategies for Specialty Services

Explain some of the different carve-out arrangements that an MCO may use to arrange access to specialty services Describe the criteria a health plan uses to select a sole-source provider for specialty services Explain how the role of the PCP in behavioral healthcare varies among health plans Explain health plan's options for arranging access to clinical eye care and routine eye care Distinguish between ophthalmologists, optometrists, opticians List some reasons health plans often find the development and management of alternative healthcare networks to be

challenging

List some ways in which a home healthcare agency can prepare itself to accept capitated contracts



1. The Omni Health Plan is interested in expanding the specialty services it offers to its plan members and is considering contracting with the following providers of specialty services:

The Apex Company, a managed vision care organization (MVCO) The Baxter Managed Behavioral Healthcare Organization (MBHO) The Cheshire Dental Health Maintenance Organization (DHMO)

As part of its credentialing process, Omni would like to verify that each of these providers has met NCQA’s accreditation standards. However, with regard to these three specialty service providers, an NCQA accreditation program currently exists for

Go toquestion

2.

Apex and Baxter only

Apex and Cheshire only

Baxter and Cheshire only

Baxter only

2. Many health plans opt to carve out behavioral healthcare (BH) services. However, one argument against carving out BH services is that this action most likely can result in

Go toquestion

3.

slower access to BH care for plan members

increased collaboration between BH providers and PCPs

fewer specialized BH services for plan members

decreased continuity of BH care for plan members

3. The following statements are about managed dental care. Three of these statements are true, and one is false. Select the answer choice containing the FALSE statement.

Go toquestion

4.

Managed dental care is federally regulated.

Dental HMOs typically need very few healthcare facilities because almost all dental services are delivered in an ambulatory care setting.










Currently, there are no nationally recognized standards for quality in managed dental care. Processes for selecting dental care providers vary greatly according to state regulations on managed dental care networks and the health plan’s standards.

4. Jay Mercer is covered under his health plan’s vision care plan, which includes coverage for clinical eye care but not for routine eye care. Recently, Mr. Mercer had a general eye examination and got a prescription for corrective lenses. Mr. Mercer’s vision care plan will cover.

Go toquestion

5.

both the general eye examination and the prescription for corrective lenses

the general eye examination only

the prescription for corrective lenses only

neither the general eye examination nor the prescription for corrective lenses

5. An increasing number of health plans offer coverage for alternative healthcare services. One such alternative healthcare service is biofeedback. Biofeedback is an approach that

Go toquestion

6.

is based on an ancient Chinese system of healing in which needles are inserted into specific sites on the body to relieve pain treats diseases with tiny doses of substances which, in healthy people, are capable of producing symptoms like those of the disease being treated uses electronic monitoring devices to teach a patient to develop conscious control of involuntary bodily functions, such as heart rate and body temperature incorporates a variety of therapies, such as homeopathy, lifestyle modification, and herbal medicines, to support and maintain the body’s ability to heal itself

6. The provider contract that the Danube Health Plan has with the Viola Home Health Services Organization states that Danube will use a typical flat rate reimbursement arrangement to compensate Viola for the skilled nursing services it provides to Danube’s plan members. A portion of the contract’s reimbursement schedule is shown below:

Home Health Licensed Practical Nurse (LPN): $45 per visit or $90 per diem

Home Health Registered Nurse (RN): $50 per visit or $110 per diem

Last month, an LPN from Viola visited a Danube plan member and provided 1½ hours of home healthcare, and an RN from Viola visited another Danube plan member and provided 7 hours of home healthcare. The following statement(s) can correctly be made about Danube’s payment to Viola for these services:

A. Danube most likely owes $90 for the LPN’s skilled nursing services and $110 for the RN’s skilled nursing services.

B. Danube’s payment amount could be different from the amount called for in the reimbursement schedule if the level of care provided to one of these plan members was significantly different from the level of

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care normally provided by Viola’s RNs and LPNs.

Both A and B

A only

B only

Neither A nor B

>---------- End of the Test ----------<1 D2 D3 A4 D5 C6 C

Assignment 7: Establishing Networks for Government-Sponsored Programs

Reading 7A: Special Considerations for Medicare Networks

Identify federal legislation that has affected the Medicare program and describe its impact on Medicare health plan List the three types of health plans that are authorized to apply for Medicare contracts under the Medicare + Choice

programs, and identify the two types of health plans that are allowed to establish closed networks of providers Describe the steps that Medicare + Choice health plans must take to ensure that network services are available and

accessible to enrollees Describe the restrictions on the use of physician incentive plans by Medicare + Choice health plans Discuss several other HCFA regulations affecting the relationship between Medicare + Choice health plans and

network providers

Discuss some special needs of Medicare beneficiaries that health plans should consider when establishing Medicare networks



1. Prior to the enactment of the Balanced Budget Act (BBA) of 1997, payment for Medicare-covered primary and acute care services was based on the adjusted average per capita cost (AAPCC). The AAPCC is defined as the

Go toquestion

2.

average cost of services delivered to all patients living in a specified geographic region actuarial value of the deductible and coinsurance amounts for basic Medicare-covered benefits fee-for-service amount that the Centers for Medicaid and Medicare Services (CMS) would pay for a Medicare beneficiary, adjusted for age, sex, and institutional status average fixed monthly fee paid by all Medicare enrollees in a specified geographic region

2. The Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 allowed competitive medical plans (CMPs) to participate in the Medicare program on a risk basis. Under the terms of Medicare risk contracts, CMPs were required to deliver all medically necessary Medicare-covered services in return for a

Go toquestion

3.

fixed monthly capitation payment from CMS

fee-for-service payment from the appropriate state Medicare agency

mandatory premium paid by plan enrollees

fee equal to twice the actuarial value of the Medicare deductible and coinsurance paid by plan enrollees

3. Social health maintenance organizations (SHMOs) and Programs of All-Inclusive Care for the Elderly (PACE) are federal programs designed to provide coordinated healthcare services to the elderly. Unlike PACE, SHMOs

Go toquestion

4.

are reimbursed solely through Medicaid programs

provide extensive long-term care










are reimbursed on a fee-for-service basis

limit benefits to a specified maximum amount

4. Franklin Pitt selected a Medicare+Choice option under which he is covered by a catastrophic health insurance policy with a high annual deductible and a $6,000 out-of-pocket expense maximum. CMS pays the premiums for the insurance policy out of the usual Medicare+Choice payment and deposits any difference between the capitated amount and the policy premium in a savings account. Mr. Pitt can use funds in the savings account to pay qualified medical expenses not covered by his insurance policy. At the end of the benefit year, Mr. Pitt can carry any remaining funds into the next benefit year. The Medicare+Choice option Mr. Pitt selected is known as a

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5.

coordinate care plan (CCP)

medical savings account (MSA) plan

competitive medical plan (CMP)

Medicare Risk HMO program

5. The BBA of 1997 specifies the ways in which a Medicare+Choice plan can establish and use provider networks. A Medicare+Choice plan that operates as a private fee for service (PFFS) plan is allowed to

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6.

limit the size of its network to the number of providers necessary to meet the needs of its enrollees require providers to accept as payment in full an amount no greater than 115% of the Medicare payment rate refuse payment to non-network providers who submit claims for Medicare-covered expenses

shift all risk for Medicare-covered services to network providers

6. As an authorized Medicare+Choice plan, the Brightwell HMO must satisfy CMS requirements regulating access to covered services. In order to ensure that its network provides adequate access, Brightwell must

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7.

allow enrollees to determine whether they will receive primary care from a physician, nurse practitioner, or other qualified network provider base a provider’s participation in the network, reimbursement, and indemnification levels on the provider’s license or certification

define its service area according to community patterns of care

require enrollees to obtain prior authorization for all emergency or urgently needed services

7. Dr. Ahmad Shah and Dr. Shantelle Owen provide primary care services to Medicare+Choice enrollees of health plans under the following physician incentive plans:

Dr. Shah receives $40 per enrollee per month for providing primary care and an additional $10 per enrollee per month if the cost of referral services falls below a specified level

Dr. Owen receives $30 per enrollee per month for providing primary care and an additional $15 per enrollee per month if the cost of

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8.













referral services falls below a specified level

The use of a physician incentive plan creates substantial risk for

both Dr. Shah and Dr. Owen

Dr. Shah only

Dr. Owen only

neither Dr. Shah nor Dr. Owen

8. Stop-loss insurance is designed to protect physicians who face substantial financial risk as a result of physician incentive plans. Medicare+Choice health plans must ensure that a physician has adequate stop-loss protection if the

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9.

physician has a patient panel that exceeds 25,000 patients

physician receives a bonus that is based solely on quality of care, patient satisfaction, or physician participation difference between the physician’s maximum potential payments and his or her minimum potential payments is less than 25% of the maximum potential payments physician is subject to a withhold that is greater than 25% of his or her potential payments

9. CMS Medicare+Choice regulations include a provision that allows health plans to deny benefits for any services the health plan objects to on moral or religious grounds. The provision that exempts health plans from providing such services is known as

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a conscience protection exception

a hold harmless clause

a medical necessity determination

an intermediate sanction

>---------- End of the Test ----------<

1 C2 A3 D4 B5 B6 C7 C






8 D9 A

Reading 7B: Special Considerations for Medicaid Networks

Explain the origin and purpose of the Medicaid program Describe the characteristics of the three major segments of the Medicaid population and the challenges these groups

present for health plans Define a safety net provider and explain the role that safety net providers can play in Medicaid managed care Define the two types of Medicaid managed care entities (MCEs)- managed care organizations (MCOs) and primary

care case managers (PCCMs) Explain the differences between open contracting and selective contracting Discuss some of the challenges that health plans face in applying managed care strategies to Medicaid Describe the type of information a health plan might include in its response to a Medicaid Request for Proposal

(RFP) Explain some of the important considerations in a Medicaid-MCO managed care contract List some of the questions a health plan might ask when credentialing providers for a Medicaid network

Discuss the compensation of Medicaid providers, including creative compensation methods that health plans can use



1. Medicaid is a joint federal and state program that provides healthcare coverage for low-income, medically needy, and disabled individuals. Under the terms of this joint sponsorship, the

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2.

federal government is responsible for making all claim payments

federal government is responsible for determining the basic benefits that must be provided to eligible Medicaid beneficiaries state governments are responsible for setting minimum standards regarding eligibility, benefit coverage, and provider participation and reimbursement state governments are responsible for establishing overall regulation of the Medicaid program

2. Medicaid beneficiaries pose a challenge for health plans attempting to establish Medicaid provider networks. Compared to membership in commercial health plans, Medicaid enrollees typically

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3.

require access to greater numbers of obstetricians and pediatricians

have stronger relationships with primary care providers

are less reliant on emergency rooms as a source of first-line care

need fewer support and ancillary services

3. Martin Breslin, age 72 and permanently disabled, is classified as dually-eligible. This information indicates that Mr. Breslin qualifies for coverage by both

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4.

Medicare and private indemnity insurance, and Medicare provides primary coverage

Medicare and Medicaid, and Medicare provides primary coverage

Medicaid and private indemnity insurance, and Medicaid provides










primary coverage

Medicare and Medicaid, and Medicaid provides primary coverage

4. Since 1981, states have had the option to experiment with new approaches to their Medicaid programs under the “freedom of choice” waivers. Under one such waiver, a Section 1915(b) waiver, states are allowed to

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5.

give Medicaid recipients complete freedom in choosing healthcare providers give Medicaid recipients the option to choose not to enroll in a healthcare plan mandate certain categories of Medicaid recipients to enroll in health plans establish demonstration projects to test new approaches for delivering care to Medicaid recipients

5. There are several approaches to providing Medicaid health plan. One such approach involves the use of organizations who contract with the state’s Medicaid agency to provide primary care as well as administrative services. These organizations are known as

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6.

enrollment brokers

primary care case managers (PCCMs)

certified medical assistants (CMAs)

prepaid health plans (PHPs)

6. State Medicaid agencies can contract with health plans through open contracting or selective contracting. One advantage of selective contracting is that it

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7.

allows enrollees to choose from among a greater variety of health plans

reduces the competition among health plans

increases the ability of new, local plans to participate in Medicaid programs encourages the development of products that offer enhanced benefits and more effective approaches to health plans

7. The Portway Hospital is qualified to receive Medicaid subsidy payments as a disproportionate share hospital (DHS). The DHS payments that Portway receives are

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made for services rendered to specific patients

made with matching state and federal funds

included in the Medicaid capitation payment made to patients’ health plans defined as cost-based reimbursement (CBR) equal to 100% of Portway’s reasonable costs of providing services to Medicaid recipients

>---------- End of the Test ----------<












1 B2 A3 B4 C5 B6 D7 B

Reading 7C: Provider Networks for Workers' Compensation

Explain why a state might want to institute managed workers' compensation Explain why the selection process for workers' comp providers differs from that for other types of networks

Describe some of the nonfinancial tools that a health plan can use to manage the performance of its workers' comp providers



1. Grant Pelham is covered by both a workers’ compensation program and a group health plan provided by his employer. The Shipwright Health Plan administers both programs. Mr. Grant was injured while on the job and applied for benefits.

Mr. Pelham’s group health insurance plan and workers’ compensation both provide benefits to cover expenses incurred as a result of illness or injury. However, unlike traditional group insurance coverage, workers’ compensation

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2.

provides reimbursement for lost wages

requires employees who suffer a work-related illness or injury to obtain care from specified network providers

covers all injuries and illnesses, regardless of their cause

requires employees to share the cost of treatment through deductible, coinsurance, and benefit limits


Because Mr. Pelham was injured on the job, he is entitled to receive benefits through workers’ compensation. Under the terms of the state-mandated exclusive remedy doctrine included in the workers’ compensation agreement, Mr. Pelham will most likely be prohibited from

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3.

receiving workers’ compensation benefits unless he can show that the employer was at fault for his injury obtaining care from providers who are not members of a workers’ compensation network

suing his employer for additional benefits

claiming benefits from both workers’ compensation and his group health plan


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4.










The provider network that Shipwright uses to furnish services for its workers’ compensation program will most likely

emphasize primary care and consist mostly of generalists

focus treatment approaches on rapid recovery rather than cost

offer workers’ compensation beneficiaries the same types and levels of treatment that Shipwright’s traditional network furnishes to group health plan members exempt participating providers from meeting standard credentialing requirements

4. Health plans can often reduce workers’ compensation costs by incorporating 24-hour coverage into their workers’ compensations programs. Twenty-four-hour coverage reduces costs by

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5.

maximizing the effects of cost shifting

eliminating the need for utilization management

requiring members to use separate points of entry for job-related and non-job related services combining administrative services for workers’ compensation and non-workers’ compensation healthcare and disability coverage

5. In most states, workers’ compensation is first-dollar and last-dollar coverage, which means that workers’ compensation programs

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can place limits on the benefits they will pay for a given claim

can deny coverage for work-related illness or injury if the employer is not at fault

must pay 100% of work-related medical and disability expenses

can hold employers liable for additional amounts that result from court decisions

>---------- End of the Test ----------<1 A2 C3 B4 D5 C






Assignment 8: Ongoing Management of Provider Networks

Reading 8A: Continuing Management of Network Adequacy and Provider Satisfaction

Describe some situations that may indicate a need to review network adequacy List several factors that health plans examine when reassessing access and availability Explain the importance of provider retention Describe several methods that health plans use to provide continuing education to network providers and their staff Explain how direct referral and self-referral programs assist providers with utilization management List some of the issues that a health plan typically addresses through surveys of providers and their staffs

Explain why health plans often seek to involve network providers in network management and medical management operations



1. Before or during the orientation process, health plans generally provide new network providers with a provider manual. One of the primary purposes of the provider manual is to

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2.

provide a directory of contracted providers

help providers and their staffs develop methods of improving the operation of their practices

provide feedback to providers regarding their performance

reinforce and document contractual provisions

2. The Elizabethan Health Plan uses a direct referral program, which means that

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3.

PCPs in Elizabethan’s network can make most referrals without obtaining prior authorization from Elizabethan PCPs in Elizabethan’s network must always refer plan members to other specialists within the network Elizabethan’s plan members can bypass the PCP and obtain medical services from a specialist without a referral Elizabethan’s plan members must obtain referrals directly from Elizabethan

3. The Blanchette Health Plan uses a method of claims submission that allows its providers to submit claims directly to Blanchette through a computer application-to-application exchange of claims using a standard data format. This information indicates that Blanchette allows its providers to submit claims using technology known as

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4.

telemedicine

an electronic referral system

electronic data interchange

encounter reporting










4. Dr. Sarah Carmichael is one of several network providers who serve on one of the Apex Health Plan’s organizational committees. The committee reviews cases against providers identified through complaints and grievances or through clinical monitoring activities. If needed, the committee formulates, approves, and monitors corrective action plans for providers. Although Apex administrators and other employees also serve on the committee, only participating providers have voting rights. The committee that Dr. Carmichael serves on is a

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utilization management committee

peer review committee

medical advisory committee

credentialing committee

>---------- End of the Test ----------<1 D2 A3 C4 B



Reading 8B: Managing Provider Performance

Explain why health plans measure the performance of network providers Describe how provider profiling is important in performance measurement and performance management Describe the following types of performance measures: Structure Process Outcomes Patient satisfaction Explain how outcomes research and outcomes measurement can be used to benchmark provider performance

Describe some of the methods health plans can use to change provider behavior



1. The Azure Health Plan strives to ensure for its plan members the best possible level of care from its providers. In order to maintain such high standards, Azure uses a variety of quantitative and qualitative (behavioral) measures to determine the effectiveness of its providers. Azure then compares the clinical and operational practices of its providers with those of other providers outside the network, with the goal of identifying and implementing the practices that lead to the best outcomes.

Qualitative measures that Azure could use to assess provider performance include an evaluation of how

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2.

quickly the provider responds to plan members’ inquiries

effectively the provider communicates with plan members

often the provider refers plan members for ancillary services

many plan members visit the provider per month

2. The Azure Health Plan strives to ensure for its plan members the best possible level of care from its providers. In order to maintain such high standards, Azure uses a variety of quantitative and qualitative (behavioral) measures to determine the effectiveness of its providers. Azure then compares the clinical and operational practices of its providers with those of other providers outside the network, with the goal of identifying and implementing the practices that lead to the best outcomes.

The comparative method of evaluation that Azure uses to identify and implement the practices that lead to the best outcomes is known as

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3.

case mix analysis

outcomes research

benchmarking

provider profiling

3. Dr. Sylvia Cimer and Dr. Andrew Donne are obstetrician/gynecologists who Go to








participate in the same provider network. Dr. Comer treats a large number of high-risk patients, whereas Dr. Donne’s patients are generally healthy and rarely present complications. As a result, Dr. Comer typically uses medical resources at a much higher rate than does Dr. Donne. In order to equitably compare Dr. Comer’s performance with Dr. Donne’s performance, the health plan modified its evaluation to account for differences in the providers’ patient populations and treatment protocols. The health plan modified Dr. Comer’s and Dr. Donne’s performance data by means of

question 4.

a case mix/severity adjustment

an external performance standard

structural measures

behavior modification

4. The Edgewood Health Plan uses a combination of structural, process, outcomes, and customer satisfaction measures to evaluate its network providers’ performance. Edgewood would correctly use outcomes measures to evaluate a provider’s

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5.

compliance with specific regulatory or accrediting requirement

appropriate use of specified procedures

patient progress following treatment

patient perceptions about how well the provider addresses medical problems

5. Member satisfaction surveys help an health plan determine whether its providers are consistently delivering services to plan members in a manner that lives up to member expectations. Member satisfaction surveys allow the health plan to gather information about

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a member’s reaction to services received during a specific encounter

the reactions of specific subsets of the health plan’s membership

members’ positive and negative experience with the plan’s services

all of the above

>---------- End of the Test ----------<

1 C2 C3 A4 C5 D








AHM 530 - Tests

Documents

role of network management

scope of network management

meaning of network management

network management director

health plans procedures

larger health plans

smaller health plans

medical management