Ahm-540 2-0

AHM-540
Medical Management
Version 2.0
QUESTION NO: 1
By definition, the development and implementation of parameters for the delivery of healthcare
services to a health plan’s members is known as
A. utilization management (UM)

B. quality management (QM)
C. care management
D. clinical practice management
Answer: D
QUESTION NO: 2
Determine whether the following statement is true or false:
With respect to the size of a managed care organization (MCO) and its medical management
operations, it is correct to say that large health plans typically have more integration among
activities and less specialization of roles than do small MCOs.
A. True
B. False
Answer: B
QUESTION NO: 3
With respect to the activities of MCO medical directors, it is correct to say that medical directors
typically perform all of the following activities EXCEPT
A. maintaining clinical practices

B. delivering performance feedback to providers
C. participating in utilization management (UM) activities
D. educating other MCO staff about new clinical developments or provider innovations that
might impact clinical practice management
Answer: A
QUESTION NO: 4
The paragraph below contains two pairs of terms enclosed in parentheses. Select the term in each
pair that correctly completes the paragraph. Then select the answer choice containing the two
terms that you have chosen.
Under a delegation arrangement, the (delegate / delegator) is responsible for performing the
delegated function according to established standards, and the (delegate / delegator) is ultimately
accountable for any deficiencies in the performance of the function.
A. delegate / delegate
B. delegate / delegator
C. delegator / delegate
D. delegator / delegator
Answer: B
QUESTION NO: 5
The delegation of medical management functions to providers can occur without the transfer of
financial risk.
A. True
B. False
Answer: A
QUESTION NO: 6
For this question, if answer choices (1) through (3) are all correct, select answer choice (4).
Otherwise, select the one correct answer choice.
Health plans sometimes delegate selected medical management activities to their providers or
other external entities. Activities that are frequently delegated include
A. utilization review (UR)

B. quality management (QM)
C. preventive health services
D. all of the above
Answer: A
QUESTION NO: 7
MCOs usually have a formal program for the oversight of delegated activities. The following
statements concern typical delegation oversight programs. Select the answer choice containing
the correct statement.
A. A letter of intent is the contractual document that describes the delegated functions and the
responsibilities of the MCO and the delegate.
B. In most cases, the evaluation of a candidate for delegation is based entirely on the candidate’s
application and supporting documentation and does not include an on-site assessment of the
candidate.
C. Under most delegation agreements, an MCO cannot terminate the agreement before the end
date stated in the agreement.
D. One objective for a delegation oversight program is to integrate any delegated activities into
the MCO’s overall programs for medical management and other functions.
Answer: D
QUESTION NO: 8
The Riverside Health Plan is considering the following provider compensation options to use in
its contracts with several provider groups and hospitals:
1. A discounted fee-for-service (DFFS) payment system
2. A case rate system
3. Capitation
If Riverside wants to use only those compensation methods that encourage the efficient use of
resources, then the compensation method(s) that Riverside should consider for its new contracts
include
A. 1, 2, and 3
B. 1 and 2 only
C. 2 and 3 only
D. 3 only
Answer: C
QUESTION NO: 9
To facilitate electronic commerce (eCommerce), a health plan may establish a secured extranet.
One true statement about a secured extranet is that it is
A. based on Web-based technologies

B. available only to the employees of the health plan
C. publicly available, so the potential exists for unauthorized access to a health plan’s proprietary
systems
D. used to handle the majority of health plan eCommerce
Answer: A
QUESTION NO: 10
The following statements are about health plans’ use of electronic data interchange (EDI). Three
of the statements are true and one is false. Select the answer choice containing the FALSE ALSE
statement.
A. One advantage of EDI over manual data management systems is improved data integrity.
B. EDI may use the Internet as the communication link between the participating parties.
C. EDI involves back-and-forth exchanges of information concerning individual transactions.
D. The data format for EDI is agreed upon by the sending and receiving parties.
Answer: C
QUESTION NO: 11
For this question, if answer choices (A) through (C) are all correct, select answer choice (D).
Many health plans use data warehouses to assist with the performance of medical management
activities. With respect to the characteristics of data warehouses, it is generally correct to say
A. that the construction of a data warehouse is quick and simple

B. that a data warehouse addresses the problems associated with multiple data management
systems
C. that a data warehouse stores only current data
D. all of the above
Answer: B
QUESTION NO: 12
The paragraph below contains an incomplete statement. Select the answer choice containing the
term that correctly completes the paragraph.
Medical management programs often require the analysis of many types of data and information.
__________________ is an automated process that analyzes variables to help detect patterns and
relationships in the data.
A. Unbundling
B. Outsourcing
C. Data mining
D. Drilling down
Answer: C
QUESTION NO: 13
One method of transferring the information in electronic medical records (EMRs) is through a
health information network (HIN). The following statements are about HINs. Three of the
statements are true and one is false. Select the answer choice containing the FALSE statement.
A. A HIN may afford a health plan better measurements of outcomes and provider performance.
B. The use of a HIN typically increases a health plan’s exposure to liability for poor care.
C. Most HINs are Internet-based rather than built on proprietary computer networks.
D. Currently, the majority of health plans do not have HINs that are capable of transferring
medical records among their network providers.
Answer: B
QUESTION NO: 14
Private employers are key purchasers of health plan services. The following statement(s) can
correctly be made about employer expectations about the quality and cost-effectiveness of
healthcare services:
1. For both health maintenance organizations (HMOs) and non-HMO plans, employers typically
have access to accreditation results and performance measurement reports to help them evaluate
the quality of healthcare and service
2. Because of employers’ concern about the quality and costs of healthcare services available
through health plans, direct contracting has become a dominant model among employers who
sponsor health benefit programs for their employees
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: D
QUESTION NO: 15
State governments serve as both regulators and purchasers of health plan services. The influence
of state governments as purchasers is focused on
A. Medicare and TRICARE programs

B. Medicaid and workers’ compensation programs
C. Medicare and Medicaid programs
D. TRICARE and workers’ compensation programs
Answer: B
QUESTION NO: 16
Federal laws, such as the Employee Retirement Income Security Act (ERISA), the Balanced
Budget Act (BBA) of 1997, and the Health Insurance Portability and Accountability Act
(HIPAA), have affected medical management activities by health plans. Consider the following
provisions of federal regulations:
Provision 1—Limits damage awards in lawsuits related to noncoverage of benefits based on
medical necessity decisions to the cost of noncovered treatment and does not allow health plan
members to obtain compensatory or punitive damages
Provision 2—Establishes electronic data security standards, which define the security measures
that healthcare organizations must take to protect the confidentiality of electronically stored and
transmitted patient information From the answer choices below, select the response that correctly
identifies the federal laws that include Provision 1 and Provision 2, respectively.
A. Provision 1- ERISA Provision 2- HIPAA
B. Provision 1- HIPAA Provision 2- ERISA
C. Provision 1- BBA of 1997 Provision 2- HIPAA
D. Provision 1- ERISA Provision 2- BBA of 1997
Answer: A
QUESTION NO: 17
The Quality Assessment Performance Improvement (QAPI) is a quality initiative designed to
strengthen health plans’ efforts to protect and improve the health and satisfaction of Medicare
and Medicaid health plan enrollees. The Centers for Medicare and Medicaid Services (CMS)
requires compliance with QAPI from
A. both Medicare+Choice plans and Medicaid health plans

B. Medicare+Choice plans only
C. Medicaid health plans only
D. neither Medicare+Choice plans nor Medicaid health plans
Answer: B
QUESTION NO: 18
This agency has authority over Programs of All-inclusive Care for the Elderly (PACE) and the
State Children’s Health Insurance Program (SCHIP).
A. Health Resources and Services Administration (HRSA)

B. Office of Personnel Management (OPM)
C. Department of Health and Human Services (HHS)
D. Department of Justice (DOJ)
Answer: C
QUESTION NO: 19
This agency oversees the Federal Employee Health Benefits Program (FEHBP).

Answer: B
QUESTION NO: 20
This agency oversees fraud and abuse matters as they relate to medical management.

Answer: D
QUESTION NO: 21
The Midwest Health Plan delegated utilization review (UR) activities to the Tri-City Utilization
Review Organization. After Tri-City improperly recommended denial of payment for services to
a Midwest plan member, the plan member filed suit. The court ruled that Midwest was
responsible for Tri-City’s actions because of the relationship between Midwest and Tri-City. This
situation is an illustration of a legal concept known as
A. vicarious liability
B. fraud
C. a tying arrangement
D. subdelegation
Answer: A
QUESTION NO: 22
Accreditation is intended to help purchasers and consumers make decisions about healthcare
coverage.
The following statements are about accreditation. Select the answer choice containing the correct
statement.
A. At the request of health plans, accrediting agencies gather the data needed for accreditation.
B. Most purchasers and consumers review accreditation results when making decisions to
purchase or enroll in a specific health plan.
C. Accreditation is typically conducted by independent, not-for-profit organizations.
D. All health plans are required to participate in the accreditation process.
Answer: C
QUESTION NO: 23
The following statement(s) can correctly be made about accrediting agency standards for
delegation:
1. The National Committee for Quality Assurance (NCQA) allows health plans to delegate all
medical management functions, including the responsibility to perform delegation oversight
activities
2. In some cases, accreditation standards for delegation oversight are reduced if the delegate has
already been certified or accredited by the delegator’s accrediting agency
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: C
QUESTION NO: 24
Various government and independent agencies have created tools to measure and report the
quality of healthcare. One performance measurement tool that was developed by the Agency for
Healthcare Research and Quality (AHRQ) is
A. the Health Plan Employer Data and Information Set (HEDIS®), which is a report card system
for hospitals and long-term care facilities
B. HEDIS, which is a performance measurement tool that addresses both effectiveness of care
and plan member satisfaction
C. the Consumer Assessment of Health Plans (CAHPS®), which was established to develop and
implement a national strategy for quality measurement and reporting
D. CAHPS, which is a tool that measures consumer satisfaction with specific aspects of health
plan services
Answer: D
QUESTION NO: 25
To manage the delivery of healthcare services to their members, health plans use clinical practice
parameters. ___________________ is the type of clinical practice parameter that a health plan
uses to make coverage decisions concerning medical necessity and appropriateness.
A. A clinical practice guideline (CPG)

B. Medical policy
C. Benefits administration policy
D. A standard of care
Answer: B
QUESTION NO: 26
Three general categories of coverage policy—medical policy, benefits administration policy, and
administrative policy—are used in conjunction with purchaser contracts to determine a health
plan’s coverage of healthcare services and supplies. With respect to the characteristics of the
three types of coverage policy, it is correct to say that a health plan’s
A. medical policy evaluates clinical services against specific benefits language rather than
against scientific evidence
B. benefits administration policy determines whether a particular service is experimental or
investigational
C. benefits administration policy focuses on both clinical and nonclinical coverage issues
D. administrative policy contains the guidelines to be followed when handling member and
provider complaints and disputes
Answer: D
QUESTION NO: 27
A health plan’s coverage policies are linked to its purchaser contracts. The following statement(s)
can correctly be made about the purchaser contract and coverage decisions:
1. In case of conflict between the purchaser contract and a health plan’s medical policy or
benefits administration policy, the contract takes precedence
2. Purchaser contracts commonly exclude custodial care from their coverage of services and
supplies
3. All of the criteria for coverage decisions must be included in the purchaser contract
A. All of the above
B. 1 and 2 only
C. 2 only
D. 3 only
Answer: B
QUESTION NO: 28
Helena Ray, a member of the Harbrace Health Plan, suffers from migraine headaches. To treat
Ms. Ray’s condition, her physician has prescribed Upzil, a medication that has Food and Drug
Administration (FDA) approval only for the treatment of depression. Upzil has not been tested
for safety or effectiveness in the treatment of migraine headache. Although Harbrace’s medical
policy for migraine headache does not include coverage of Upzil, Harbrace has agreed to provide
extra-contractual coverage of Upzil for Ms. Ray.
In this situation, the prescribing of Upzil for Ms. Ray’s headaches is an example of
A. a cosmetic service
B. an investigational service
C. an off-label use
D. a quality-of-life service
Answer: C
QUESTION NO: 29
Helena Ray, a member of the Harbrace Health Plan, suffers from migraine headaches. To treat
Ms. Ray’s condition, her physician has prescribed Upzil, a medication that has Food and Drug
Administration (FDA) approval only for the treatment of depression. Upzil has not been tested
for safety or effectiveness in the treatment of migraine headache. Although Harbrace’s medical
policy for migraine headache does not include coverage of Upzil, Harbrace has agreed to provide
extra-contractual coverage of Upzil for Ms. Ray.
The following statement(s) can correctly be made about Harbrace’s use of extra-contractual
coverage:
1. Harbrace’s medical policy most likely establishes the procedure that Harbrace used to evaluate
the value of Upzil for treating Ms. Ray
2. One way for Harbrace to reduce the risk associated with extra-contractual coverage is by
including an alternative care provision in its contracts with purchasers
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: C
QUESTION NO: 30
The following statements are about health plans’ development of medical policies. Three of the
A. Technology assessment is applicable only to medical policy development for new medical
procedures, devices, drugs, and tests.
B. Technology assessment provides the scientific rationale for the medical policy section that
specifies when a medical service is appropriate and when it is not.
C. The medical policy development process includes both a clinical and an operational review of
a proposed medical policy.
D. The decision to accept or reject a proposed medical policy often depends on how a new
technology compares to currently used interventions.
Answer: A
QUESTION NO: 31
For this question, if answer choices (a) through (c) are all correct, select answer choice (d).
Well-crafted clinical practice guidelines (CPGs) can benefit healthcare delivery processes and
outcomes by
A. providing a framework for care while also allowing for patient-specific variations, based on
physician judgment
B. serving as a basis for evaluating whether providers are practicing in accordance with accepted
standards
C. focusing on the prevention or early detection of a particular condition
D. all of the above
Answer: D
QUESTION NO: 32
Definitions of quality healthcare vary; however, four dimensions are essential to quality
healthcare services. ________________ is the quality dimension indicating that services result in
the best care for a given cost or the lowest cost for a given level of care.
A. Accessibility
B. Effectiveness
C. Acceptability
D. Efficiency
Answer: D
QUESTION NO: 33
One difference between outcomes research and clinical research is that outcomes research
A. provides an absolute measure of treatment results, whereas clinical research provides a

relative measure of results
B. focuses on treatment effectiveness, whereas clinical research focuses on treatment efficacy
C. examines diseases and treatments in isolation, whereas clinical research considers the effects
of changes in health status and quality of life
D. gathers outcomes data from controlled clinical trials, whereas clinical research collects and
analyzes clinical, financial, and administrative data
Answer: B
QUESTION NO: 34
Outcomes management is a tool that health plans use to maximize all the results associated with
healthcare processes. The following statement(s) can correctly be made about outcomes
management:
1. The goal of outcomes management is to identify and implement treatments that are cost-
effective and deliver the greatest value
2. Outcomes management introduces performance as a critical factor in the assessment and
improvement of outcomes
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: A
QUESTION NO: 35
The paragraph below contains two pairs of terms in parentheses. Determine which term in each
pair correctly completes the paragraph. Then select the answer choice containing the two terms
that you have chosen.
Health plans use both internal and external standards to assess the quality of the services that
they provide. (Internal / External) standards are based on information such as published industry-
wide averages or best practices of recognized industry leaders. Health plans primarily rely on
(internal / external) standards to evaluate healthcare services.
A. Internal / internal
B. Internal / external
C. External / internal
D. External / external
Answer: D
QUESTION NO: 36
All health plans participating in the Federal Employee Health Benefits Program (FEHBP) are
required to use the Consumer Assessment of Health Plans (CAHPS) to measure customer
satisfaction.
A. True
B. False
Answer: A
QUESTION NO: 37
This agency’s accreditation decisions are based on the results of an on-site survey of clinical and
administrative systems and processes, as well as the health plan’s performance on selected
effectiveness of care and member satisfaction measures.
A. American Accreditation HealthCare Commission/URAC (URAC)

B. Joint Commission on Accreditation of Healthcare Organizations (JCAHO)
C. Community Health Accreditation Program (CHAP)
D. National Committee for Quality Assurance (NCQA)
Answer: D
QUESTION NO: 38
Among this agency’s accreditation programs are accreditation for preferred provider
organizations (PPOs), health plan call centers, and case management organizations. This agency
classifies its standards as either “shall” standards or “should” standards.
A. American Accreditation HealthCare Commission/URAC (URAC)

C. Community Health Accreditation Program (CHAP)
D. National Committee for Quality Assurance (NCQA)
Answer: A
QUESTION NO: 39
Patient safety and medical errors are important concerns for both quality management (QM) and
risk management. The following statement(s) can correctly be made about medical errors:
1. The complexity of modern medicine and healthcare delivery systems increases patients’
exposure to the risks of medical errors
2. Licensing boards for healthcare professionals in all states provide a consistent system of
quality oversight and accountability
3. Provider compliance with internal incident reporting requirements is low
A. All of the above

B. 1 and 2 only
C. 1 and 3 only
D. 3 only
Answer: C
QUESTION NO: 40
When conducting performance assessment, a health pln may classify the key processes
associated with its services into the following categories: high-risk, high-volume, problem-prone,
and high-cost.
The following statements are about this classification of processes. Three of the statements are
true and one is false. Select the answer choice containing the FALSE statement.
A. In some instances, relatively inexpensive processes can qualify as high-cost processes.

B. Each process must be classified into a single category.
C. High-risk processes most often involve medical interventions or treatment plans for acute
illnesses or case management processes for complex conditions.
D. Administrative processes such as scheduling appointments are examples of high-volume
processes.
Answer: B
QUESTION NO: 41
The Westchester Health Plan classifies its key processes into the following categories: high-risk,
high-volume, problem-prone, and high-cost. Westchester also prioritizes the categories in terms
of importance. The process category that Westchester most likely ranks highest in importance is
A. High-risk processes
B. High-volume processes
C. Problem-prone processes
D. High-cost processes
Answer: A
QUESTION NO: 42
Each quality standard used by a health plan is associated with quality indicators. A
______________ indicator is a form of aggregate data indicator that produces results that fit
within a specified range, such as the length of time to schedule an appointment.
A. yes/no
B. sentinel event
C. discrete variable
D. continuous variable
Answer: D
QUESTION NO: 43
In order to provide a true measure of quality, the data collected by a quality indicator should
accurately represent the service dimension being measured. This information indicates that the
indicator should exhibit the characteristic known as
A. clarity
B. reliability
C. validity
D. feasibility
Answer: C
QUESTION NO: 44
The following statement(s) can correctly be made about performance measurement systems:
1. The most difficult purpose for a performance measurement system to address is to measure
changes in outcomes caused by modifications in administrative or clinical treatment processes
2. A health plan needs different performance measurement systems to evaluate its administrative
services and the clinical performance of its providers
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: C
QUESTION NO: 45
Health plan performance measures include structure measures, process measures, and outcome
measures. The following statements are about the characteristics of these three types of
performance measures. Three of the statements are true and one is false. Select the answer choice
containing the FALSE statement.
A. The most widely used structure measures relate to physician education and training.
B. One advantage of structure measures over process measures is that structures are often linked
directly to healthcare outcomes.
C. Process measures are useful in identifying underuse, overuse, and inappropriate use of
services.
D. One disadvantage of outcome measures is that they can be influenced by factors outside the
control of the health plan.
Answer: B
QUESTION NO: 46
A health plan’s choice of structure measures, process measures, and outcome measures to
evaluate performance depends in part on the scientific soundness of the measures. One approach
that a health plan can use to enhance scientific soundness is stratification, which refers to the
A. identification and removal of unusual cases, such as patients with contraindications to a

particular treatment, from consideration
B. statistical adjustment of outcome measures to account for differences in the severity of illness
or the presence of other medical conditions
C. specification of a target population for a procedure and the data collection and analysis
methods to be used
D. elimination of variation within a patient population by dividing the population into groups
that are at a similar level of risk
Answer: D
QUESTION NO: 47
To measure performance for quality management, health plans collect and analyze three types of
data: financial data, clinical data, and customer satisfaction data. The following statement(s) can
correctly be made about the sources of clinical data:
1. Patient surveys are the most widely used source of disease-specific clinical information
2. Outcomes research studies sponsored by academic institutions and professional organizations
have limited usefulness for particular health plans or individual providers
3. The SF-36 and the HSQ-39 (Health Status Questionnaire) surveys address both physical and
mental health status
A. All of the above
B. 1 and 2 only
C. 2 and 3 only
D. 3 only
Answer: C
QUESTION NO: 48
Increased demands for performance information have resulted in the development of various
health plan report cards. With respect to most of the report cards currently available, it is correct
to say
A. that they are focused primarily on health maintenance organization (HMO) plans
B. that they are based on data collected for the Health Plan Employer Data and Information Set
(HEDIS) 3.0
C. that they are used to rank the performance of various health plans
D. all of the above
Answer: D
QUESTION NO: 49
In order to achieve changes in outcomes, health plans make changes to existing structures and
processes. The introduction of preauthorization as an attempt to control overuse of services is an
example of a reactive change. Reactive changes are typically
A. both planned and controlled

B. planned, but they are rarely controlled
C. controlled, but they are rarely planned
D. neither planned nor controlled
Answer: C
QUESTION NO: 50
In order for a health plan’s performance-based quality improvement programs to be effective, the
desired outcomes must be
A. achievable within a specified timeframe
B. defined in terms of multiple results
C. expressed in subjective, qualitative terms
D. all of the above
Answer: A
QUESTION NO: 51
Health plans communicate proposed performance changes through action statements. Select the
answer choice containing an action statement that includes all of the required elements.
A. The proportion of adult members who are screened for hypertension will increase by ten
percent.
B. Primary care providers (PCPs) will increase the proportion of children under the age of two
who are up-to-date on immunizations by seven percent within one year.
C. The QM program director will evaluate the level of provider compliance with clinical practice
guidelines (CPGs).
D. The disease management program director will increase participation by asthmatic children in
the health plan’s pediatric asthma disease management program.
Answer: B
QUESTION NO: 52
Administrative action plans are used when performance problems or opportunities are related to
the way the organization itself operates. The following statement(s) can correctly be made about
administrative action plans:
1. Administrative action plans allow health plans to coordinate management activities
2. One function of administrative action plans is to integrate service across all levels of the
organization
3. Administrative action plans are designed to improve outcomes by helping plan members
assume responsibility for their own health
A. All of the above

B. 1 and 2 only
C. 1 and 3 only
D. 2 and 3 only
Answer: B
QUESTION NO: 53
As a follow-up to a performance improvement plan for member services, the Stellar Health Plan
conducted an evaluation of the success of the plan. Stellar conducted its evaluation as the plan
was being carried out. The evaluation focused on specific activities and assessed the relative
importance of those activities to the plan as a whole. This information indicates that Stellar’s
evaluation of the plan was both
A. concurrent and formative

B. concurrent and summative
C. retrospective and formative
D. retrospective and summative
Answer: A
QUESTION NO: 54
Health plans conduct evaluations on the efficiency and effectiveness of their quality
improvement activities. With regard to the effectiveness of quality improvement plans, it is
correct to say that
A. effectiveness is the relationship between what the organization puts into an improvement plan
and what it gets out of the plan
B. effectiveness is measured by reviewing outcomes to determine the accuracy or
appropriateness of the strategy and the adequacy of resources allocated to that strategy
C. the effectiveness of an action plan is typically measured with a concurrent evaluation
D. an evaluation of plan effectiveness produces one of two results: the plan either (a) achieved
the desired outcomes or (b) did not achieve the desired outcomes and is unlikely to do so under
current conditions
Answer: B
QUESTION NO: 55
The paragraph below contains two pairs of terms or phrases enclosed in parentheses. Determine
which term or phrase in each pair correctly completes the paragraph. Then select the answer
choice containing the two terms or phrases that you have selected.
The process for collecting and analyzing data differs for quality assessment (QA) and quality
improvement (QI). For QA, data collection focuses on (objective / both objective and subjective)
data, and data analysis identifies the (degree / cause) of variance.
A. objective / degree
B. objective / cause
C. both objective and subjective / degree
D. both objective and subjective / cause
Answer: A
QUESTION NO: 56
Performance variance can be classified as either common cause variance or special cause
variance. The following statement(s) can correctly be made about special cause variance:
1. Inadequate staffing levels, employee errors, and equipment malfunctions are examples of
special cause variance
2. Special cause variance is typically more difficult to detect and correct than is common cause
variance
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: B
QUESTION NO: 57
Benchmarking is a quality improvement strategy used by some health plans. With regard to
benchmarking, it is correct to say that
A. cost-based benchmarking reveals why some areas of a health plan perform better or worse
than comparable areas of other organizations
B. diagnosis-related groups (DRGs) are a source of benchmarking data that describe individual
procedures and cover both inpatient and outpatient care
C. patient billing records provide a much more accurate account of procedure costs for
benchmarking than do current procedural terminology (CPT) codes
D. the focus of benchmarking for health plan has shifted from identifying the lowest cost
practices to identifying best practices
Answer: D
QUESTION NO: 58
The Garnet Health Plan uses provider profiling to measure and improve provider performance.
Provider profiling most likely allows Garnet to
A. evaluate all providers without considering differences in risk

B. focus on specific clinical decisions of Garnet’s providers rather than on patterns of care
C. identify the outliers and high-value providers in its provider network
D. measure the effectiveness, but not the efficiency, of Garnet’s providers
Answer: C
QUESTION NO: 59
The following statement(s) can correctly be made about the characteristics of peer review:
1. Peer review is applicable to either single episodes of care or to entire programs of care
2. Most peer review is conducted concurrently
3. Under the Health Care Quality Improvement Program (HCQIP), peer review is required for
services furnished to Medicare and Medicaid recipients enrolled in health plans
A. All of the above

B. 1 and 2 only
C. 1 and 3 only
D. 2 and 3 only
Answer: C
QUESTION NO: 60
A health plan's preventive care initiatives may be classified into three main categories: primary
prevention, secondary prevention, and tertiary prevention. Secondary prevention refers to
activities designed to
A. develop an appropriate treatment strategy for patients whose conditions require extensive,
complex healthcare
B. educate and motivate members to prevent illness through their lifestyle choices
C. prevent the occurrence of illness or injury
D. detect a medical condition in its early stages and prevent or at least delay disease progression
and complications
Answer: D
QUESTION NO: 61
Some health plans administer a questionnaire known as the Behavioral Risk Factor Surveillance
System (BRFSS) as part of their health risk assessment (HRA) processes. The following
statements are about the BRFSS. If statements (A) through (C) are all correct, select answer
choice (D). Otherwise, select the one correct statement.
A. This questionnaire was designed specifically for use by health plans.

B. Each health plan must use the same form of the questionnaire, with no additions or
modifications.
C. This questionnaire monitors the prevalence of the major behavioral risks associated with
illness and injury among adults.
D. All of the above statements are correct.
Answer: C
QUESTION NO: 62
Many health plans use HRA to target their preventive care programs to the healthcare needs of
their members. With regard to HRA, it is correct to say that
A. Health plans rarely delegate HRA activities to external entities

B. Health plans typically focus their HRA efforts on newly enrolled members
C. HRA focuses on clinical data for an entire population and does not include demographic
information that might identify individual members
D. HRA is generally a reliable predictor of medical resource utilization
Answer: B
QUESTION NO: 63
When analyzing and applying HRA results, the Multistate Health Plan noted sampling bias. This
information indicates that the HRA results
A. do not accurately depict the characteristics of the Multistate member population under study
because of errors in data collection
B. are more accurate for individual Multistate members than they are for the total population
C. cannot be stated in numerical terms
D. indicate variation in the number, types, and severity of behavioral risks presented by
Multistate’s members
Answer: A
QUESTION NO: 64
Immunization programs are a direct means of reducing health plan members’ needs for
healthcare services and are typically cost-effective.
A. True
B. False
Answer: A
QUESTION NO: 65
Readiness is an important consideration for the development of health promotion programs.
Readiness refers to
A. the availability of previously established health promotion programs to an health plan’s

members through employers, providers, or community service agencies
B. the appropriateness of a program’s educational approach, given the language, literacy level,
and cultural sensitivities of the target population
C. a member’s level of knowledge about existing health risks and problems and the member’s
ability and willingness to adopt new health-related behaviors
D. a member’s access to information technology, such as a video cassette recorder, a computer,
or the Internet
Answer: C
QUESTION NO: 66
The following statement(s) can correctly be made about the use of screening for secondary
prevention:
1. Screening activities may involve specialty care providers as well as primary care providers
(PCPs) and the health plan
2. Secondary prevention often results in more utilization of services immediately following
screening
3. Screening focuses on members who have not experienced any symptoms of a particular illness
A. All of the above

B. 1 and 3 only
C. 2 and 3 only
D. 1 only
Answer: A
QUESTION NO: 67
The following statements describe situations in which health plan members have medical
problems that require care. Select the statement that describes a situation in which self-care most
likely would not be appropriate.
A. Two days after bruising her leg, Avis Bennet notices that the pain from the bruise has
increased and that there are red streaks and swelling around the bruised area.
B. Calvin Dodd has Type II diabetes and requires blood glucose monitoring tests several times
each day.
C. Caroline Evans has severe arthritis that requires regular exercise and oral medication to
reduce pain and help her maintain mobility.
D. Oscar Gracken is recovering from a heart attack and requires ongoing cardiac rehabilitation.
Answer: A
QUESTION NO: 68
To improve members’ abilities to make appropriate care decisions about specific medical
problems, some health plans use a form of decision support known as telephone triage programs.
The following statements are about telephone triage programs. Select the answer choice
containing the correct statement.
A. The primary role of telephone triage clinical staff is to diagnose the caller’s condition and
give medical advice.
B. Quality management (QM) for telephone triage programs typically focuses on the clinical
information provided rather than on the quality of service.
C. Currently, none of the major accrediting agencies offers an accreditation program specifically
for telephone triage programs.
D. A telephone triage program may also include a self-care component.
Answer: B
QUESTION NO: 69
Emilio Martinez, a member of the Bloom Health Plan, has recently been diagnosed with prostate
cancer by his physician, Dr. Robert Cohen. Mr. Martinez has decided to participate in Bloom’s
shared decision-making program for prostate cancer. On the basis of this information, it is most
likely correct to say
1. That verification of Mr. Martinez’s understanding about his care options protects both Dr.
Cohen and Bloom against charges of malpractice
2. That Mr. Martinez and Dr. Cohen will discuss the care options available to Mr. Martinez, but
the ultimate decision about care is up to Dr. Cohen
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: D
QUESTION NO: 70
The following statements are about the characteristics of a utilization review (UR) program.
Three of the statements are true and one is false. Select the answer choice containing the FALSE
statement.
A. A primary goal of UR is to address practice variations through the application of uniform

standards and guidelines.
B. UR evaluates whether the services recommended by a member’s provider are covered under
the benefit plan.
C. UR recommends the procedures that providers should perform for plan members.
D. A health plan’s UR program is usually subject to review and approval by the state insurance
and/or health departments.
Answer: C
QUESTION NO: 71
choice containing the terms or phrases that you have chosen.
One component of UR is an administrative review. An administrative review compares the

proposed medical care to the applicable (medical policy / contract provision). This type of review
(can / cannot) be conducted by a nonclinical staff member.
A. medical policy / can

B. medical policy / cannot
C. contract provision / can
D. contract provision / cannot
Answer: C
QUESTION NO: 72
The Brighton Health Plan regularly performs prospective UR for surgical procedures. Brighton’s
prospective UR activities are likely to include
A. documenting the clinical details of the patient’s condition and care

B. tracking the length of inpatient stay
C. completing the discharge planning process
D. determining the most appropriate setting for the proposed course of care
Answer: D
QUESTION NO: 73
The following statement(s) can correctly be made about utilization guidelines:
1. When developing utilization guidelines, health plans balance evidence-based criteria with
experience-based criteria
2. Utilization guidelines indicate when a UR nurse should refer a decision to a physician
reviewer
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: A
QUESTION NO: 74
To see that utilization guidelines are consistently applied, UR programs rely on authorization
systems. Determine whether the following statement about authorization systems is true or false:
Only physicians can make nonauthorization decisions based on medical necessity.
A. True
B. False
Answer: A
QUESTION NO: 75
Due to competitive pressures and consumer demand, many health plans now offer direct access
or open access products. Under a direct access product, a member is (required / not required) to
select a primary care provider (PCP), and is (required / not required) to obtain a referral from a
PCP or the health plan before visiting a network specialist.
A. required / required
B. required / not required
C. not required / required
D. not required / not required
Answer: B
QUESTION NO: 76
The following statements are about health plans' complaint resolution procedures (CRPs). Three
of the statements are true and one is false. Select the answer choice containing the FALSE
statement.
A. An health plan's CRPs reduce the likelihood of errors in decision making.

B. CRPs typically provide for at least two levels of appeal for formal appeals.
C. CRPs include only formal appeals and do not apply to informal complaints.
D. Most complaints are resolved without proceeding through the entire CRP process.
Answer: C
QUESTION NO: 77
Health plans have a specified number of working days to respond to Level One appeals, as stated
by company policy or regulatory requirements. With regard to the timeframes for appeals, it is
generally correct to say
1. That the typical timeframe requires a health plan to respond to appeals in fewer than 20 days
2. That the timeframe is accelerated for expedited appeals
3. That the review period begins when the appeal arrives at a health plan
A. All of the above

B. 1 and 2 only
C. 1 and 3 only
D. 2 and 3 only
Answer: D
QUESTION NO: 78
Independent review organizations (IROs) can mediate disputes and offer advisory opinions to
health plans on UR issues, but they cannot render binding decisions on appeals.
A. True
B. False
Answer: B
QUESTION NO: 79
Patricia McLeod is a member of the Enterprise Health Plan, which operates in State X. Ms.
McLeod is scheduled to undergo a unilateral mastectomy for the treatment of breast cancer. The
surgical procedure will be performed by Dr. Kim Lee, a surgical oncologist. Based on
Enterprise’s medical policy, the contract with the purchaser, and Ms. McLeod’s medical
condition, Enterprise’s UR staff have determined that the appropriate course of care for Ms.
McLeod includes a 24-hour stay in the hospital following her surgery. State X, however, has a
benefit mandate specifying health plan coverage for 48 hours of inpatient post-mastectomy care.
In this situation, the length of hospital stay for which Enterprise must offer coverage is
A. the length of stay deemed appropriate by Dr. Lee

B. the 24-hour stay determined to be appropriate by Enterprise’s UR staff
C. the length of stay deemed appropriate by Ms. McLeod
D. the 48-hour length of stay specified by State X
Answer: D
QUESTION NO: 80
One way that health plans evaluate their UR programs is by monitoring utilization rates. By
definition, utilization rates typically
A. indicate changes in the total amount of medical expenses or claim dollars paid for particular
procedures
B. measure the number of services provided per 1,000 members per year
C. indicate standard approaches to care for many common, uncomplicated healthcare services
D. report the number of times that a particular provider performs or recommends a service
excluded from the benefit plan
Answer: B
QUESTION NO: 81
In most commercial health plans, the case management process is directed by a case manager
whose responsibilities typically include
A. focusing on a disabled member’s vocational rehabilitation and training

B. approving all care decisions for patients under case management
C. reducing the fragmentation of care that often results when individuals obtain services from
several different providers
D. all of the above
Answer: C
QUESTION NO: 82
The following statement(s) can correctly be made about the scope of case management:
1. Case management incorporates activities that may fall outside a health plan’s typical
responsibilities, such as assessing a member’s financial situation
2. Case management generally requires a less comprehensive and complex approach to a course
of care than does utilization review
3. Case management is currently applicable only to medical conditions that require inpatient
hospital care and are categorized as catastrophic in terms of health and/or costs
All of the above

1 and 2 only
2 and 3 only
1 only
Answer: D
QUESTION NO: 83
The utilization review (UR) process produces the greatest number of case management referrals.
A. True
B. False
Answer: A
QUESTION NO: 84
Breanna Osborn is a case manager for a regional health plan. One component of Ms. Osborn’s
job is the collection and evaluation of medical, financial, social, and psychosocial information
about a member’s situation. This component of Ms. Osborn’s job is known as
A. case identification
B. case management planning
C. healthcare coordination
D. case assessment
Answer: D
QUESTION NO: 85
The following statements are about risk management for case management. Three of the
A. The use of a signed consent authorization form is consistent with accrediting agency standards
for patient privacy and confidentiality of medical information.
B. Case management that is initiated after a member has incurred substantial medical expenses is
more likely to be viewed as a tool to cut costs rather than to improve outcomes.
C. Health plan documents indicating that any case management delegates are separate,
independent entities may reduce an health plan's exposure to risk.
D. A case management file cannot be used to support the health plan's position in the event of a
lawsuit.
Answer: D
QUESTION NO: 86
The case management program director at the Nova Health Plan calculated the program’s ratio of
medical expense savings to case management administrative costs for the previous quarter based
on the following cost information:
Administrative costs for case management ..........$40,000

Actual medical care expenses for patients under case management ..........$680,000
Projected medical care expenses for the same patients without case management ..........$900,000
This information indicates that, for the previous quarter, Nova’s ratio of medical expense savings
to case management administrative costs was
A. 0.71/1
B. 0.80/1
C. 5.50/1
D. 1.25/1
Answer: C
QUESTION NO: 87
One true statement about state regulation of case management activities is that the majority of
states
A. have enacted laws that list specific quality management requirements for a case management
program
B. consider case management files to be medical records that must be retained for a specified
length of time
C. view case management similarly and follow similar patterns with their laws and regulations
D. have enacted laws or regulations requiring licensure or certification of case managers
Answer: B
QUESTION NO: 88
The American Accreditation HealthCare Commission/URAC (URAC) has an accreditation
program specifically for case management services. From the answer choices below, select the
response that correctly identifies the type(s) of case management services addressed by URAC’s
standards and the type(s) of organizations to which these standards may be applied.
A. Type(s) of Services-on-site services only Type(s) of Organization-health plans only

B. Type(s) of Services-on-site services only Type(s) of Organization-any organization that
performs case management functions
C. Type(s) of Services-both telephonic and on-site services Type(s) of Organization-health plans
only
D. Type(s) of Services-both telephonic and on-site services Type(s) of Organization-any
organization that performs case management functions
Answer: D
QUESTION NO: 89
The following statements are about disease management programs. Three of the statements are
true and one is false. Select the answer choice containing the FALSE statement.
A. The focus of disease management is on responding to the needs of individual members for
extensive, customized healthcare supervision.
B. Disease management programs serve to improve both clinical and financial outcomes for
healthcare services related to chronic conditions.
C. Tools such as preventive care, self-care, and decision support programs are used to support
both case management and disease management.
D. Disease management programs apply to both diseases and medical conditions that are not
diseases, such as high-risk pregnancy, severe burns, and trauma.
Answer: A
QUESTION NO: 90
Under a carve-out arrangement for disease management, patients typically maintain their existing
relationships with primary care providers (PCPs) for all care, including disease management.
A. True
B. False
Answer: B
QUESTION NO: 91
Comorbidity can have a significant impact on the effective implementation of disease
management programs. Comorbidity can correctly be defined as the
A. degree to which the progression of a disease or condition is understood

B. prevalence or rate of a sickness or injury within a given population
C. degree of severity of a particular disease or condition
D. presence of a chronic condition or added complication other than the condition that requires
medical treatment
Answer: D
QUESTION NO: 92
Selene Varga is participating in her health plan’s disease management program for congestive
heart failure. Ms. Varga’s health status is regularly monitored and managed by a licensed nurse
who visits Ms. Varga at her home to administer treatment and assess the need for changes in Ms.
Varga’s overall care plan. This information indicates that Ms. Varga is participating in the type of
disease management program known as a
A. coordinated outreach model program

B. case management model program
C. hub-and-spoke model program
D. group clinic model program
Answer: B
QUESTION NO: 93
The Fairview Health Plan uses a dual database approach to integrate information needed for its
disease management program. This information indicates that Fairview uses an information
management system that
A. combines all existing information from all data sources into a single comprehensive system
B. connects multiple databases with a central interface engine that acts as an information
clearinghouse
C. provides an outside vendor with pertinent data that the vendor compiles into an integrated
database
D. creates a separate database that pulls pertinent information from the health plan’s claims
database, formats the information for easy analysis, and stores it in the separate database
Answer: D
QUESTION NO: 94
The Carlyle Health Plan uses the following clinical outcome measures to evaluate its diabetes
and asthma disease management programs:
Measure 1: The percentage of diabetic patients who receive foot exams from their providers
according to the program’s recommended guidelines Measure 2: The number of asthma patients
who visited emergency departments for acute asthma attacks
From the answer choices below, select the response that correctly identifies whether these
measures are true outcome measures or intermediate outcome measures. Measure 1- Measure 2-
A. Measure 1-true outcome measure Measure 2-true outcome measure

B. Measure 1-true outcome measure Measure 2-intermediate outcome measure
C. Measure 1-intermediate outcome measure Measure 2-true outcome measure
D. Measure 1-intermediate outcome measure Measure 2-intermediate outcome measure
Answer: C
QUESTION NO: 95
Participation in disease management programs is currently voluntary.
A. True
B. False
Answer: A
QUESTION NO: 96
Acute care refers to healthcare services for medical problems that
A. are expected to continue for a minimum of 30 days

B. are typically treated in a provider’s office or outpatient facility
C. require prompt, intensive treatment by healthcare providers
D. require low utilization of resources
Answer: C
QUESTION NO: 97
The following statements are about the use of hospitalists to manage inpatient care. Select the
answer choice containing the correct statement.
A. A patient who has been transferred to a hospitalist for management of inpatient care usually
continues to receive care from the hospitalist after discharge.
B. Hospitalists are used primarily to manage care for obstetric, pediatric, and oncology patients.
C. In order to serve as a hospitalist, a physician must have a background in critical care
medicine.
D. Hospitalists typically spend at least one-quarter of their time in a hospital setting.
Answer: D
QUESTION NO: 98
The following statement(s) can correctly be made about the hospitalist approach to inpatient care
management:
1. Management of inpatient care by hospitalists may significantly reduce the length of stay and
the total costs of care for a hospital admission
2. Most health plans that use hospitalists do so through a voluntary hospitalist program
3. A hospitalist’s familiarity with utilization management (UM) and quality management (QM)
standards for inpatient care may reduce unnecessary variations in care and improve clinical
outcomes
A. All of the above

B. 1 and 2 only
C. 1 and 3 only
D. 2 only
Answer: A
QUESTION NO: 99
Health plans arrange for the delivery of various levels of healthcare, including
1. Emergency care
2. Urgent care
3. Primary care delivered in a provider’s office
In a ranking of these levels of care according to cost, beginning with the least expensive level of
care and ending with the most expensive level of care, the correct order would be
A. 1—2—3
B. 2—3—1
C. 3—1—2
D. 3—2—1
Answer: D
QUESTION NO: 100

The Balanced Budget Act (BBA) of 1997 established the use of ___________ to determine
coverage of emergency services for Medicare and Medicaid enrollees in health plans.
A. utilization management standards

B. the prudent layperson standard
C. preauthorization
D. diagnosis-based retrospective review
Answer: B
QUESTION NO: 101

Nilay Sharma suffered a small wound while working in his yard and was taken to a local hospital
for treatment. A triage nurse at the hospital evaluated Mr. Sharma’s condition and directed him to
an outpatient unit in the hospital where a physician assistant examined, cleaned, and sutured the
wound. Mr. Sharma returned home following treatment. The care Mr. Sharma received at the
hospital is an example of the type of care known as
A. specialty referral
B. primary prevention
C. urgent care
D. emergency care
Answer: C
QUESTION NO: 102

Elaine Newman suffered an acute asthma attack and was taken to a hospital emergency
department for treatment. Because Ms. Newman’s condition had not improved enough following
treatment to warrant immediate release, she was transferred to an observation care unit.
Transferring Ms. Newman to the observation care unit most likely
A. resulted in unnecessarily expensive charges for treatment

B. prevented Ms. Newman from receiving immediate attention for her condition
C. gave Ms. Newman access to more effective and efficient treatment than she could have
obtained from other providers in the same region
D. allowed clinical staff an opportunity to determine whether Ms. Newman required
hospitalization without actually admitting her
Answer: D
QUESTION NO: 103

Many health plans use clinical pathways to help manage the delivery of acute care services to
plan members. One true statement about clinical pathways is that they
A. determine which healthcare services are medically necessary and appropriate for a particular
patient in a particular situation
B. outline the services that will be delivered, the providers responsible for delivering the
services, the timing of delivery, the setting in which services are delivered, and the expected
outcomes of the interventions
C. cover only services delivered in an acute inpatient setting
D. address medical conditions that affect a small segment of a given population and with which
the majority of providers are unfamiliar
Answer: B
QUESTION NO: 104

In order to be effective, a clinical pathway must improve quality and decrease costs.
A. True
B. False
Answer: B
QUESTION NO: 105

The Strathmore Health Plan uses clinical pathways to manage its acute care services. In order to
reduce the risk of financial liability associated with the use of clinical pathways, Strathmore and
its network hospitals should
A. base pathways on relevant evidence reported in medical literature

B. restrict each pathway to a single medical condition
C. use pathways to establish a new standard of care
D. allow providers to use only those interventions listed in the pathways
Answer: A
QUESTION NO: 106

The case management team at the Hightower Health Plan reviewed the medical records of the
following two plan members to determine the type of care each one needs and the most
appropriate setting for that care:
Ira Morton was hospitalized for a severe stroke. Although his medical condition is stable, the
stroke left him partially paralyzed and he will require extensive rehabilitation and 24-hour
medical care.
Theresa Finley is recovering from a total hip replacement and is in need of short-term physical
therapy and twice-weekly visits from a licensed nurse to check her blood pressure and the
healing of her incision.
From the answer choices below, select the response that correctly identifies the level of care that
would be most appropriate for Mr. Morton and Ms. Finley.
A. Mr. Morton-acute care Ms. Finley-subacute care

B. Mr. Morton-palliative care Ms. Finley-acute care
C. Mr. Morton-subacute care Ms. Finley-skilled care
D. Mr. Morton-skilled care Ms. Finley-palliative care
Answer: C
QUESTION NO: 107

Health plans often use accreditation as a means of evaluating the quality of care delivered to plan
members. Accreditation of subacute care providers is available from the
A. National Committee for Quality Assurance (NCQA)

C. American Accreditation HealthCare Commission/URAC (URAC)
D. Foundation for Accountability (FACCT)
Answer: B
QUESTION NO: 108

The paragraph below contains two pairs of terms enclosed in parentheses. Select the term in each
pair that correctly completes the paragraph. Then select the answer choice containing the two
terms you have chosen.
A primary distinction between skilled care and subacute care relates to the extent and medical
complexity of the patient’s needs. Generally, subacute care patients require (more / fewer)
services from physicians and nurses and (more / less) extensive rehabilitation services than do
skilled care patients.
A. more / more
B. more / less
C. fewer / more
D. fewer / less
Answer: A
QUESTION NO: 109

Skilled nursing facilities (SNFs) are required by law to have formal programs for quality
improvement and to monitor these programs using established standards. These requirements are
described in
1. The Omnibus Budget Reconciliation Act (OBRA) of 1986
2. The Balanced Budget Act (BBA) of 1997
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 or 2
Answer: B
QUESTION NO: 110

Home healthcare encompasses a wide variety of medical, social, and support services delivered
at the homes of patients who are disabled, chronically ill, or terminally ill. The time period(s)
when health plans typically use home healthcare include
1. The period prior to a hospital admission
2. The period following discharge from a hospital
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: A
QUESTION NO: 111

Demetrius Farrell, age 82, is suffering from a terminal illness and has consulted his health plan
about the care options available to him. In order to avoid unwanted, futile interventions, Mr.
Farrell signed an advance directive that indicates the types of end-of-life medical treatment he
wants to receive. His family is to use this document as a guide should Mr. Farrell become
incapacitated.
The document that Mr. Farrell is using to communicate his end-of-life healthcare wishes to his
family is known as a
A. medical power of attorney

B. patient assessment and care plan
C. living will
D. healthcare proxy
Answer: C
QUESTION NO: 112

Demetrius Farrell, age 82, is suffering from a terminal illness and has consulted his health plan
about the care options available to him. In order to avoid unwanted, futile interventions, Mr.
Farrell signed an advance directive that indicates the types of end-of-life medical treatment he
wants to receive. His family is to use this document as a guide should Mr. Farrell become
incapacitated.
Decisions regarding Mr. Farrell’s end-of-life care are legally the right and responsibility of
A. Mr. Farrell and his family

B. Mr. Farrell’s physician
C. Mr. Farrell’s health plan
D. All of the above
Answer: A
QUESTION NO: 113

Health plans that choose to contract with external organizations for pharmacy services typically
contract with pharmacy benefit managers (PBMs). Functions that a PBM typically performs for a
health plan include
1. Managing the costs of prescription drugs
2. Promoting efficient and safe drug use
3. Determining the health plan’s internal management responsibilities for pharmacy services
A. All of the above

B. 1 and 2 only
C. 2 and 3 only
D. 1 only
Answer: B
QUESTION NO: 114

Economically, health plans cannot provide coverage for every drug available from every
manufacturer. As a result, purchaser contracts often include provisions specifying that certain
drugs or drug types will not be covered. These provisions are referred to as
A. limitations
B. exceptions
C. exclusions
D. drug edits
Answer: C
QUESTION NO: 115

The Millway Health Plan received a 15% reduction in the price of a particular pharmaceutical
based on the volume of the drug Millway purchased from the manufacturer. This reduction in
price is an example of a (rebate / price discount) and (is / is not) dependent on actual provider
prescribing patterns.
A. rebate / is
B. rebate / is not
C. price discount / is
D. price discount / is not
Answer: D
QUESTION NO: 116

The following statements are about the use of provider profiling for pharmacy benefits. Three of
the statements are true and one is false. Select the answer choice containing the FALSE
statement.
A. Health plans typically use provider profiles to improve the quality of care associated with the
use of prescription drugs.
B. Provider profiles identify prescribing patterns that fall outside normal ranges.
C. Health plans can motivate providers to change their prescribing patterns by sharing profile
information with plan members and the general public.
D. Provider profiles are effective in modifying individual prescribing patterns, but they have
little effect on group prescribing patterns.
Answer: D
QUESTION NO: 117

The Hall Health Plan gathered objective clinical information about the recommended uses and
dosages of angiotensin-converting enzyme (ACE) inhibitors and presented the information to
network providers to illustrate the appropriate use of these frequently prescribed and expensive
drugs. This information indicates that Hall most likely educated its network providers through
the use of
A. detailing
B. cognitive services
C. counter detailing
D. drug efficacy study implementation (DESI)
Answer: C
QUESTION NO: 118

Maxwell Midler’s health plan operates a drug formulary that includes a typical three-tier
copayment structure with required copayments of $5, $10, and $25. Mr. Midler recently filled a
prescription for a $75 drug that was not included in the formulary. According to the plan’s
formulary copayment structure, the amount that Mr. Midler was required to pay for his
prescription was
A. $5
B. $10
C. $25
D. $75
Answer: C
QUESTION NO: 119

In recent years, the demand for prescription drugs has increased dramatically. Factors that have
contributed to this increase include
A. increased education regarding the purpose and benefits of drug formularies

B. reductions in the cost of prescription drugs
C. increased use of direct-to-consumer (DTC) advertising
D. all of the above
Answer: C
QUESTION NO: 120

The Glenway Health Plan’s pharmacy and therapeutics (P&T) committee conducted
pharmacoeconomic research to measure both the clinical outcomes and costs of two new
cholesterol-reducing drugs. Results were presented as a ratio showing the cost required to
produce a 1 mcg/l decrease in cholesterol levels. The type of pharmacoeconomic research that
Glenway conducted in this situation was most likely
A. cost-effectiveness analysis (CEA)

B. cost-minimization analysis (CMA)
C. cost-utility analysis (CUA)
D. cost of illness analysis (COI)
Answer: A
QUESTION NO: 121

The Noble Health Plan conducted a cost/benefit analysis of the following four prescription
drugs:
Benefit Cost
Drug A $525 $350
Drug B $450 $250
Drug C $400 $200
Drug D $350 $100
According to this analysis, the drug that represents the most efficient use of resources is
A. Drug A
B. Drug B
C. Drug C
D. Drug D
Answer: D
QUESTION NO: 122

In most health plans, the formulary system is developed and managed by a P&T committee. The
P&T committee is responsible for
A. evaluating and selecting drugs for inclusion in the formulary

B. overseeing the manufacture, distribution, and marketing of prescription drugs
C. certifying the medical necessity of expensive, potentially toxic, or nonformulary drugs
D. all of the above
Answer: A
QUESTION NO: 123

Adele Stanley, a member of the Greenhouse Health Plan, recently went to a network pharmacy to
have a prescription filled. The pharmacist informed Ms. Stanley that the prescribed drug was not
in the plan formulary and that reimbursement for the drug was not available except in
extraordinary circumstances. The pharmacist asked Ms. Stanley if she would accept a generic
substitute.
The paragraph below contains two pairs of terms enclosed in parentheses. Determine which term
in each pair correctly completes the paragraph. Then select the answer choice containing the two
terms that you have chosen.
Greenhouse’s prescription drug reimbursement policy indicates that the plan formulary is
classified as (open / closed), and that compliance by patients and providers is (mandatory /
voluntary).
A. open / mandatory
B. open / voluntary
C. closed / mandatory
D. closed / voluntary
Answer: C
QUESTION NO: 124

Adele Stanley, a member of the Greenhouse Health Plan, recently went to a network pharmacy to
have a prescription filled. The pharmacist informed Ms. Stanley that the prescribed drug was not
in the plan formulary and that reimbursement for the drug was not available except in
extraordinary circumstances. The pharmacist asked Ms. Stanley if she would accept a generic
substitute.
If Ms. Stanley agrees to the generic substitution, she will receive a drug that
A. has not been tested for safety and efficacy in large clinical trials
B. is available without a prescription at a reasonable cost
C. has been classified by the Food and Drug Administration (FDA) as safe, but that has not been
proven fully effective
D. contains active ingredients that are identical to those of the prescribed brand-name drug
Answer: D
QUESTION NO: 125

Drugs included in a health plan’s formulary can be classified according to how freely they can be
prescribed. By definition, a drug that requires some sort of review or approval by a plan
physician or group of physicians before the prescription can be filled is
A. an unrestricted drug
B. a monitored drug
C. a restricted drug
D. a conditional drug
Answer: B
QUESTION NO: 126

The Harbor Health Plan’s formulary policy encourages network pharmacists who are asked to fill
a prescription for a costly, brand-name drug to dispense a different chemical entity within the
same drug class in order to reduce costs. This type of drug substitution is referred to as
A. generic substitution, and prescriber approval is not required

B. generic substitution, and prescriber approval is always required
C. therapeutic substitution, and prescriber approval is not required
D. therapeutic substitution, and prescriber approval is always required
Answer: D
QUESTION NO: 127

Step-therapy is a form of prior authorization that reserves the use of more expensive medications
for cases in which the use of less expensive medications has been unsuccessful. Step-therapy is
appropriate for situations in which
1. A significant percentage of those treated with the initial therapy will require the second
therapy
2. The delay created when a patient moves from one therapy to the next therapy will not cause
serious or permanent effects
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: C
QUESTION NO: 128

7. One method that health plans use to address provider compliance with formularies is academic
detailing.
A. True
B. False
Answer: A
QUESTION NO: 129

One of the steps in drug utilization review (DUR) is defining optimal drug use, which can be
accomplished by applying diagnosis criteria and drug-specific criteria. Drug-specific criteria are
standards that identify the
A. appropriate dosages, duration of treatment, and other elements related to the use of a
particular drug
B. actual prescribing and dispensing patterns for a particular drug
C. types of diseases, conditions, or patients for which a drug should be used
D. cost-effectiveness of all possible drug treatments for a particular condition
Answer: A
QUESTION NO: 130

DUR can be conducted prospectively, concurrently, or retrospectively. One true statement about
prospective DUR is that it
A. involves periodic audits of the medical records of a certain group of patients

B. is based on historical data
C. focuses on the drug therapy for a single patient rather than overall usage patterns
D. is conducted by physicians, without input from pharmacists
Answer: C
QUESTION NO: 131

All states have laws describing the conditions under which pharmacists can substitute a generic
drug for a brand-name drug. With respect to these laws, it is correct to say that in every state,
A. pharmacists must obtain physician approval before substituting generics for brand-name drugs
B. pharmacists must obtain authorization from the health plan before substituting generics for
brand-name drugs
C. prescribers must obtain authorization from the health plan before prescribing a brand-name
drug
D. prescribers have some mechanism that allows them to prevent pharmacists from substituting
generics for brand-name drugs
Answer: D
QUESTION NO: 132

PBMs are accredited by the same organizations that accredit health plans.
A. True
B. False
Answer: B
QUESTION NO: 133

One way that health plans can make their benefits more appealing to employers and employees is
to offer coverage for specialty services. It is correct to say that specialty services typically
A. involve the same types of providers and delivery systems as do standard medical services
B. are a subset of a health plan’s standard medical-surgical services
C. are not monitored by health plans for quality or utilization
D. require specialized knowledge for service delivery and management
Answer: D
QUESTION NO: 134

The nature of behavioral healthcare creates unique medical management challenges for health
plans. One method health plans have used to support the delivery of appropriate services in a
cost-effective manner is to
A. remove behavioral healthcare services from the primary care setting

B. shift behavioral healthcare from acute inpatient settings to alternative settings when feasible
C. reserve the use of psychotherapy for treatment of those conditions that persist over long
periods of time or for the life of the patient
D. offer the same level of compensation to all of the professional disciplines that provide
behavioral healthcare services to plan members
Answer: B
QUESTION NO: 135
The Shoreside Health Plan recently added coverage for behavioral healthcare services to its
benefit package. In order to support the quality of its behavioral healthcare services, Shoreside
plans to seek accreditation for its behavioral healthcare program. Accreditation specifically
designed for behavioral healthcare programs is available through
1. The Joint Commission on Accreditation of Healthcare Organizations (JCAHO)
2. The National Committee for Quality Assurance (NCQA)
3. The American Accreditation HealthCare Commission/URAC (URAC)
A. All of the above

B. 1 and 2 only
C. 2 and 3 only
D. 1 only
Answer: B
QUESTION NO: 136

The Mental Health Parity Act (MHPA) of 1996 is a federal law that establishes requirements for
behavioral healthcare coverage for group plan members. The MHPA
A. requires health plans to offer mental health benefits to all eligible members
B. prohibits health plans that offer mental health benefits from imposing lower annual or lifetime
dollar limits on mental illnesses than they do on physical illnesses
C. provides an exemption for health plans that can demonstrate cost savings of more than 1
percent
D. prohibits health plans from limiting the number of outpatient visits or inpatient days covered
under the plan
Answer: B
QUESTION NO: 137

The following statements are about medical management considerations for dental care. Select
the answer choice containing the correct statement.
A. Managed dental care organizations are regulated at the state rather than the federal level.
B. Dental care differs from medical care in that most dental care is provided by specialists.
C. Dental preferred provider organizations (Dental PPOs) are subject to more regulation than are
dental health maintenance organizations (DHMOs).
D. Managed dental plans are accredited by the National Association of Dental Plans (NADP).
Answer: A
QUESTION NO: 138

Michelle Durden, who is enrolled in a dental health maintenance organizations (DHMO) offered
by her employer, is due for a routine dental examination. If the plan is typical of most DHMOs,
then Ms. Durden
A. must pay the entire cost of the examination

B. must obtain a referral to a dentist from her primary care provider (PCP)
C. can schedule the examination without preauthorization of payment by the DHMO
D. can schedule an unlimited number of examinations and cleanings per year
Answer: C
QUESTION NO: 139

Vision care is typically separated into two categories: routine eye care and clinical eye care. The
standard benefit plans offered by most health plans include coverage for
1. Routine eye care
2. Clinical eye care
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: C
QUESTION NO: 140

Health plans that offer complementary and alternative medicine (CAM) services face potential
liability because many types of CAM services
A. must be offered as separate supplemental benefits or separate products

B. lack clinical trials to evaluate their safety and effectiveness
C. are not covered by state or federal consumer protection statutes
D. focus on a specific illness, injury, or symptom rather than on the whole body
Answer: B
QUESTION NO: 141

Examples of alternative healthcare practitioners are chiropractors, naturopaths, and
acupuncturists. The only well-established credentialing standards for alternative healthcare
practitioners are those available from NCQA. These NCQA credentialing standards apply to
A. chiropractors
B. naturopaths
C. acupuncturists
D. all of the above
Answer: A
QUESTION NO: 142

Most health plans require a PCP referral or precertification for CAM benefits.
A. True
B. False
Answer: B
QUESTION NO: 143

Medicare beneficiaries can obtain healthcare benefits through fee-for-service (FFS) Medicare
programs, Medicare medical savings account (MSA) plans, Medigap insurance, or coordinated
care plans (CCPs). Unlike other coverage options, CCPs
A. provide only those benefits covered by Medicare Part A and Part B

B. are not subject to federal or state regulation
C. place primary care at the center of the delivery system
D. are structured as indemnity plans
Answer: C
QUESTION NO: 144

Since its inception, Medicare has undergone a number of changes because of legal and regulatory
action. One result of the Balanced Budget Act (BBA) of 1997 has been to
A. expand Medicare benefits by mandating coverage for certain preventive services

B. reduce the number of organizations that can deliver covered services
C. encourage growth of managed Medicare programs in all markets
D. increase the number of “zero premium” plans available to Medicare beneficiaries
Answer: A
QUESTION NO: 145

The QAPI (Quality Assessment Performance Improvement Program) is a Centers for Medicaid
and Medicare Services (CMS) initiative designed to strengthen health plans’ efforts to protect
and improve the health and satisfaction of Medicare beneficiaries. QAPI quality assessment
standards apply to
A. standard medical-surgical services

B. mental health and substance abuse services
C. services offered to Medicare enrollees as optional supplementary benefits
D. all of the above
Answer: D
QUESTION NO: 146

Comparing the quality of managed Medicare programs with the quality of FFS Medicare
programs is often difficult. Unlike FFS Medicare, managed Medicare programs
A. can measure and report quality only at the provider level

B. use a single system to deliver services to all plan members
C. provide an organizational focus for accountability
D. can use the same performance measures for all products and plans
Answer: C
QUESTION NO: 147
Designing effective medical management programs for Medicare beneficiaries requires an
understanding of the unique health needs of the Medicare population. One characteristic of
Medicare beneficiaries is that they typically
A. do not experience mental health problems

B. consume more than half of all prescription drugs
C. are likely to equate quality with the technical aspects of clinical procedures
D. require longer and more costly recovery periods following acute illnesses or injuries than does
the general population
Answer: D
QUESTION NO: 148

The paragraph below contains two pairs of phrases enclosed in parentheses. Select the phrase in
each pair that correctly completes the paragraph. The select the answer choice containing the two
phrases you have selected.
Calvin Montrose, age 75, has difficulty performing basic self-care activities, such as bathing,
dressing, and eating, without assistance. This information indicates that Mr. Montrose needs
assistance with (activities of daily living / instrumental activities of daily living) that are used to
measure his (functional status / health status).
A. activities of daily living / functional status

B. activities of daily living / health status
C. instrumental activities of daily living / functional status
D. instrumental activities of daily living / health status
Answer: A
QUESTION NO: 149

Health plans that offer healthcare programs for Medicare beneficiaries have a strong financial
incentive for identifying high-risk seniors as early as possible. The identification of high-risk
seniors is typically accomplished through the use of
A. case management
B. geriatric evaluation and management (GEM)
C. intervention identification
D. interdisciplinary home care (IHC)
Answer: C
QUESTION NO: 150

CMS has developed two prototype programs—Programs of All-inclusive Care for the Elderly
(PACE) and the Social Health Maintenance Organization (SHMO) demonstration project—to
deliver healthcare services to Medicare beneficiaries. From the answer choices below, select the
response that correctly identifies the features of these programs.
A. PACE-annual limits on benefits for nursing home and community-based care SHMO-no
limits on long-term care benefits
B. PACE-provide long-term care only SHMO-provide acute and long-term care
C. PACE-enrollees must be age 65 or older SHMO-enrollees must be age 55 or older
D. PACE-enrollment open to nursing home certifiable Medicare beneficiaries only SHMO-
enrollment open to all Medicare beneficiaries
Answer: D
QUESTION NO: 151

Recent laws and regulations have established new requirements for Medicaid eligibility. The
Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 affected
Medicaid eligibility by
A. severing the link between Medicaid and public assistance

B. eliminating the need for applications for Medicaid and public assistance
C. allowing states to provide healthcare benefits to groups outside the traditional Medicaid
population
D. providing supplemental funding for dual eligibles in the form of five-year block grants
Answer: A
QUESTION NO: 152

The BBA of 1997 allows states to provide Medicaid benefits to children through the State
Children’s Health Insurance Program (SCHIP). Under the terms of the BBA, states can
implement SCHIP as
1. Part of their existing Medicaid programs
2. Separate commercial insurance programs
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: A
QUESTION NO: 153

The following statements are about QAPI as it applies to Medicare+Choice plans and Medicaid
health plan entities. Select the answer choice containing the correct statement.
A. QAPI provides separate sets of standards for Medicaid MCEs and Medicare+Choice plans.
B. Medicaid primary care case management (PCCM) programs are required to comply with all
QAPI standards.
C. QISMC standards for quality measurement and improvement apply only to clinical services
delivered to Medicare and Medicaid enrollees.
D. States that require Medicaid MCEs to comply with QAPI standards are considered to be in
compliance with CMS quality assessment and improvement regulations.
Answer: D
QUESTION NO: 154

The Medicaid population can be divided into subgroups based on their relative size and the costs
of providing benefits. From the answer choices below, select the response that correctly
identifies the subgroups that represent the largest percentages of the total Medicaid population
and of total Medicaid expenditures. Largest % of Medicaid Population- Largest % of Medicaid
Expenditures-
A. Largest % of Medicaid Population-dual eligibles Largest % of Medicaid Expenditures-

children and low-income adults
B. Largest % of Medicaid Population-chronically ill or disabled individuals not eligible for
MedicareLargest % of Medicaid Expenditures-dual eligibles
C. Largest % of Medicaid Population-children and low-income adults Largest % of Medicaid
Expenditures-chronically ill or disabled individuals not eligible for Medicare
D. Largest % of Medicaid Population-chronically ill or disabled individuals not eligible for
Medicare Largest % of Medicaid Expenditures-children and low-income adults
Answer: C
QUESTION NO: 155

The following statements are about chronic and disabling conditions among children eligible for
Medicaid. Three of the statements are true and one is false. Select the answer choice containing
the FALSE statement.
A. Children with chronic conditions use more physician and nonphysician professional services
than do children in the general population.
B. The majority of chronic conditions affecting children in Medicaid programs are the same as
those affecting children in the general population.
C. Medicaid-eligible children are at risk for serious mental and physical conditions.
D. Children in Medicaid programs have a higher incidence of chronic disabling conditions than
do children in the general population.
Answer: B
QUESTION NO: 156

The key to successfully managing the quality and cost-effectiveness of healthcare services for
Medicaid enrollees is to merge Medicaid recipients into existing plans.
A. True
B. False
Answer: B
QUESTION NO: 157

Access to services is an important issue for both fee-for-service (FFS) Medicaid and managed
Medicaid programs. Access to services under managed Medicaid is affected by the
A. lack of qualified providers in provider networks

B. lack of resources necessary to establish case management programs for patients with complex
conditions
C. unstable eligibility status of Medicaid recipients
D. inability of Medicaid recipients to change health plans or PCPs
Answer: C
QUESTION NO: 158

The following statement(s) can correctly be made about medical management considerations for
the Federal Employee Health Benefits Program (FEHBP):
1. FEHBP plan members who have exhausted the health plan’s usual appeals process for a
disputed decision can request an independent review by the Office of Personnel Management
(OPM)
2. All health plans that cover federal employees are required to develop and implement patient
safety initiatives
A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
Answer: A
QUESTION NO: 159

Serena Wilson, a registered nurse, is employed at a TRICARE Service Center (TSC) located at a
military installation. Ms. Wilson serves as a primary point of contact between enrollees and the
TRICARE system and answers enrollees’ questions about plan options, eligibility, provider
selection, and claims. This information indicates that Ms. Wilson serves as a
A. lead agent
B. beneficiary services representative
C. health plan support contractor
D. primary care manager (PCM)
Answer: B
QUESTION NO: 160

The paragraph below contains two pairs of terms or phrases enclosed in parentheses. Select the
term or phrase in each pair that correctly completes the paragraph. Then select the answer choice
containing the two terms or phrases you have chosen.
TRICARE enrollees have the right to challenge authorization and coverage decisions. Such
challenges are referred to as (appeals / grievances) and are typically handled by the (TRICARE
contractor / Area Field Office).
A. appeals / TRICARE contractor

B. appeals / Area Field Office
C. grievances / TRICARE contractor
D. grievances / Area Field Office
Answer: A
QUESTION NO: 161

The delivery of quality, cost-effective healthcare is a primary goal of both group healthcare and
workers’ compensation programs. One difference between group healthcare and workers’
compensation is that workers’ compensation
A. provides health and disability benefits to employees injured on the job only if the employer is
at fault for the injury
B. provides coverage for a variety of direct and indirect healthcare, disability, and workplace
costs
C. manages costs by including employee cost-sharing features in its benefit design
D. places limits on benefits by restricting the amount of benefit payments or the number of
covered hospital days or provider office visits
Answer: B
QUESTION NO: 162

Ways that workers’ compensation health plans can help control the costs of job-related injuries
and illnesses include
A. applying strict definitions of medical necessity

B. developing prevention and recovery programs
C. applying out-of-network benefit reductions
D. all of the above
Answer: B
QUESTION NO: 163

Occasionally, employers combine workers’ compensation, group healthcare, and disability
programs into an integrated product known as 24-hour coverage. One true statement about 24-
hour coverage is that it typically
A. increases administrative costs

B. requires plans to maintain separate databases of patient care information
C. exempts plans from complying with state workers’ compensation regulations
D. allows plans to apply disability management and return-to-work techniques to
nonoccupational conditions
Answer: D

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A. utilization management (UM)

A. maintaining clinical practices

A. utilization review (UR)

A. based on Web-based technologies

A. that the construction of a data warehouse is quick and simple

A. Medicare and TRICARE programs

A. both Medicare+Choice plans and Medicaid health plans

A. Health Resources and Services Administration (HRSA)

A. Health Resources and Services Administration (HRSA)

A. Health Resources and Services Administration (HRSA)

A. A clinical practice guideline (CPG)

A. provides an absolute measure of treatment results, whereas clinical research provides a

A. American Accreditation HealthCare Commission/URAC (URAC)

A. American Accreditation HealthCare Commission/URAC (URAC)

A. All of the above

A. In some instances, relatively inexpensive processes can qualify as high-cost processes.

A. identification and removal of unusual cases, such as patients with contraindications to a

A. both planned and controlled

A. All of the above

A. concurrent and formative

A. evaluate all providers without considering differences in risk

A. All of the above

A. This questionnaire was designed specifically for use by health plans.

A. Health plans rarely delegate HRA activities to external entities

A. the availability of previously established health promotion programs to an health plan’s

A. All of the above

A. A primary goal of UR is to address practice variations through the application of uniform

One component of UR is an administrative review. An administrative review compares the

A. medical policy / can

A. documenting the clinical details of the patient’s condition and care

A. An health plan's CRPs reduce the likelihood of errors in decision making.

A. All of the above

A. the length of stay deemed appropriate by Dr. Lee

A. focusing on a disabled member’s vocational rehabilitation and training

All of the above

Administrative costs for case management ..........$40,000

A. Type(s) of Services-on-site services only Type(s) of Organization-health plans only

A. degree to which the progression of a disease or condition is understood

A. coordinated outreach model program

A. Measure 1-true outcome measure Measure 2-true outcome measure

A. are expected to continue for a minimum of 30 days

A. All of the above

QUESTION NO: 100

A. utilization management standards

QUESTION NO: 101

QUESTION NO: 102

A. resulted in unnecessarily expensive charges for treatment

QUESTION NO: 103

QUESTION NO: 104

QUESTION NO: 105

A. base pathways on relevant evidence reported in medical literature

QUESTION NO: 106

A. Mr. Morton-acute care Ms. Finley-subacute care

QUESTION NO: 107

A. National Committee for Quality Assurance (NCQA)

QUESTION NO: 108

QUESTION NO: 109

QUESTION NO: 110

QUESTION NO: 111

A. medical power of attorney

QUESTION NO: 112

A. Mr. Farrell and his family