Free AHIP AHM-520 Exam Questions

Become AHIP Certified with updated AHM-520 exam questions and correct answers

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Total 215 Questions | Updated On: Mar 08, 2026

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Question 1

The following statements are about the financial risks for health plans in Medicare and Medicaid markets. Three of these statements are true, and one statement is false. Select the answer choice containing the FALSE statement.

A : One reason that health plans in the Medicare and Medicaid markets experience financial risk is that government regulations determine which services must be provided to Medicare and Medicaid enrollees.

B : Effective use of hospital utilization is the single most likely factor to contribute to the success of a Medicare-contracting health plan.

C : If a Medicare-contracting health plan is a provider-sponsored organization (PSO), it is prohibited from sharing financial risk with its providers.

D : Typically, providers are more reluctant to accept financial risk in connection with providing services to the Medicaid population than with providing services to the Medicare population.

Answer: C

Question 2

Under GAAP, three approaches to expense recognition are generally allowed: associating cause and effect, systematic and rational allocation, and immediate recognition.

A health plan most likely would use the approach of systematic and rational allocation in order to:

A : Report the payment of the health plan's utility bills

B : Spread the payment of sales force commissions over the premium paying period of healthcare coverage

C : Report the fees paid by the health plan to attorneys and consultants

D : Depreciate the cost of a new computer system over the useful life of the system

Answer: D

Question 3

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

These conditions most likely include that the benefit plan:

A : Is a contributory plan

B : Is subject to collective bargaining

C : Is unable to secure discounts from the physicians who provide medical services to the plan members

D : Has a relatively high frequency of low severity claims

Answer: D

Question 4

The Fairway health plan is a for-profit health plan that issues stock. The following data was taken from Fairway's financial statements:

Current assets.....$5,000,000 -

Total assets.....$6,000,000 -

Current liabilities.....$2,500,000

Total liabilities.....$3,600,000

Stockholders' equity.....$2,400,000

Fairway's total revenues for the previous financial period were $7,200,000, and its net income for that period was $180,000.

Assume that the healthcare industry average for the debt-to-equity ratio is 0.90.

The following statement(s) can correctly be made about Fairway's debt to equity ratio:

A : Fairway's debt-to-equity ratio is 1.50

B : Fairway relies less than most other healthcare organizations on borrowed funds to cover future and current benefit payments, to pay for ongoing business operations, and to finance growth

C : Both A and B

D : A only

E : B only

F : Neither A nor B

Answer: B

Question 5

Federal law addresses the relationship between Medicare- or Medicaid contracting health plans and providers who are at "substantial financial risk."

Under federal law, Medicare- or Medicaid-contracting health plans:

A : Place a provider at "substantial risk" whenever incentive arrangements put the provider at risk for amounts in excess of 10% of his or her total potential reimbursement for providing services to Medicare and Medicaid enrollees

B : Must provide stop-loss coverage to a provider who is placed at "substantial financial risk" for services that the provider does not directly provide to Medicare or Medicaid enrollees