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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)
Answer: D
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
Answer: B
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
Answer: D
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
Answer: A
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
Answer: C
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