Free AHIP AHM-520 Exam Questions

The following statements illustrate the use of different rating methods by health plans: The Dover health plan established rates for small groups by using a rating method which requires that the average premium in each group cannot be more than 120% of the average premium for any other group. Under this method, all members of each group pay the same premium, which is based on the experience of the group.

Under the rating method used by the Rolling Hills health plan, the health plan calculates the ratio of a group's experience to the group's historical manual rate. Rolling Hills then multiplies this ratio by the group's future manual rate. Rolling Hills cannot consider the group's experience in determining premium rates. From the following answer choices, select the response that correctly indicates the rating methods used by Dover and Rolling Hills.

A health plan can use segment margins to evaluate the profitability of its profit centers.

One characteristic of a segment margin is that this margin:

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:

In a fee-for-service (FFS) reimbursement method, providers are paid per treatment or per service that they provide.

One typical benefit of FFS reimbursement is that it:

Companies typically produce three types of budgets: operational budgets, cash budgets, and capital budgets. The following statements are about operational budgets. Select the answer choice containing the correct statement.