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Frequently Asked Questions

AHIP AHM-510 Sample Question Answers

Question # 1

Antitrust laws can affect the formation, merger activities, or acquisition initiatives of a health plan. In the United States, the two federal agencies that have the primary responsibility for enforcing antitrust laws are the

A. Internal Revenue Service (IRS) and the Department of Justice (DOJ)
B. Office of Inspector General (OIG) and the Department of Defense (DOD)
C. Federal Trade Commission (FTC) and the Department of Labor (DOL)
D. Federal Trade Commission (FTC) and the Department of Justice (DOJ)

Question # 2

The Westchester Health Plan is using a pricing strategy that involves setting a low price in a highly price-sensitive market to stimulate revenue growth. In following this strategy, Westchester is sacrificing short-term profits for fast growth in selected markets. This information indicates that Westchester is following the pricing strategy known as

A. Market skimming
B. Buying market share
C. Price skimming
D. Unitary pricing

Question # 3

Third party administrators (TPAs) provide various administrative services to health plans or groups that provide health benefit plans to their employees or members. Many state laws that regulate TPAs are based on the NAIC Third Party Administrator Model Statute. One provision of the TPA Model Law is that it

A. Prohibits TPAs from performing insurance functions such as underwriting and claims processing
B. Prohibits TPAs from entering into an agreement under which the amount of the TPA's compensation is based on the amount of premium or charges the TPA collects
C. Requires TPAs, upon the termination of a TPA agreement with a group, to immediately transfer all its records relating to the group to the new administrator
D. Requires TPAs to notify the state insurance department immediately following any material change in the TPA's ownership or control 

Question # 4

The Tidewater Life and Health Insurance Company is owned by its policy owners, who are entitled to certain rights as owners of the company, and it issues both participating and nonparticipating insurance policies. Tidewater is considering converting to the type of company that is owned by individuals who purchase shares of the company's stock. Tidewater is incorporated under the laws of Illinois, but it conducts business in the Canadian provinces of Ontario and Manitoba.Tidewater established the Diversified Corporation, which then acquired various subsidiary firms that produce unrelated products and services. Tidewater remains an independent corporation and continues to own Diversified and the subsidiaries. In order to create and maintain a common vision and goals among the subsidiaries, the management of Diversified makes decisions about strategic planning and budgeting for each of the businesses.By combining under Diversified a group of businesses that produce unrelated products and by consolidating the management of the businesses, Tidewater has achieved the type(s) of integration known as

A. Conglomerate integration and operational integration
B. Horizontal integration and operational integration
C. Horizontal integration and virtual integration
D. Conglomerate integration only

Question # 5

The Hanford Health Plan has delegated the credentialing of its providers to the Sienna Group, a credential verification organization (CVO). If the contract between Hanford and Sienna complies with all of the National Committee for Quality Assurance (NCQA) guidelines for delegation of credentialing, then this contract 

A. Transfers to Sienna all rights to terminate or suspend individual practitioners or providers in Hanford's provider network
B. Describes the process by which Hanford evaluates Sienna's performance in credentialing providers
C. Both A and B
D. A only
E. B only
F. Neither A nor B

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