CMSM Managed Care and Insurance Operations 1 — Questions and Answers
Question 1: What is a Health Maintenance Organization (HMO)?
- A fee-for-service plan with no network restrictions
- A managed care plan requiring members to use network providers and a primary care physician gatekeeper (Correct answer)
- A plan that pays a percentage of all healthcare costs regardless of provider
- A government-funded insurance program for elderly patients
Correct answer: A managed care plan requiring members to use network providers and a primary care physician gatekeeper
HMOs require members to select a primary care physician and use network providers, with the PCP acting as a gatekeeper for specialist referrals.
Question 2: What does 'capitation' mean in managed care?
- A limit on the number of patients a physician can see per day
- A fixed monthly payment per enrolled member regardless of services used (Correct answer)
- A cap on the total annual benefits an insurance plan will pay
- A penalty charged when members use out-of-network providers
Correct answer: A fixed monthly payment per enrolled member regardless of services used
Capitation is a payment model where providers receive a fixed per-member-per-month payment regardless of how many services are actually provided.
Question 3: What is a Preferred Provider Organization (PPO)?
- A plan that only covers preventive care services
- A managed care plan with a restricted network and no out-of-network benefits
- A managed care plan that allows members to use out-of-network providers at a higher cost (Correct answer)
- A government-sponsored health plan for low-income individuals
Correct answer: A managed care plan that allows members to use out-of-network providers at a higher cost
PPOs allow members to visit any provider but offer lower cost-sharing when using in-network (preferred) providers, making out-of-network care available at higher out-of-pocket cost.
Question 4: What is the primary purpose of a Utilization Review (UR) process?
- To evaluate employee performance and productivity
- To assess the medical necessity and appropriateness of healthcare services (Correct answer)
- To review patient satisfaction surveys
- To audit financial statements for accuracy
Correct answer: To assess the medical necessity and appropriateness of healthcare services
Utilization review evaluates whether healthcare services are medically necessary, appropriate, and delivered in the most cost-effective setting.
Question 5: Which term describes the process by which a patient must obtain permission from their insurance plan before receiving certain services?
- Concurrent review
- Retrospective review
- Prior authorization (Correct answer)
- Claims adjudication
Correct answer: Prior authorization
Prior authorization (preauthorization) requires patients or providers to get approval from the insurance plan before certain services or medications are provided.
Question 6: What is a 'deductible' in health insurance?
- The maximum amount an insurance plan will pay in a year
- The fixed amount a patient pays for each office visit
- The amount a patient must pay out-of-pocket before insurance begins covering costs (Correct answer)
- The monthly premium paid to maintain insurance coverage
Correct answer: The amount a patient must pay out-of-pocket before insurance begins covering costs
A deductible is the amount a member must pay for covered services before the insurance plan begins to pay its share.
Question 7: What does 'coordination of benefits' (COB) mean in health insurance?
- Coordinating care between multiple healthcare providers
- A process to determine which insurance plan pays first when a patient has multiple coverages (Correct answer)
- The process of scheduling patient appointments across departments
- Managing the benefits package offered to employees
Correct answer: A process to determine which insurance plan pays first when a patient has multiple coverages
Coordination of benefits is the process used to determine the order in which multiple insurance plans will pay claims when a patient is covered by more than one plan.
CMSM Managed Care and Insurance Operations 1
What is a Health Maintenance Organization (HMO)?