CMSM Managed Care and Insurance Operations 2 — Questions and Answers
Question 1: What is an Explanation of Benefits (EOB)?
- A document explaining the patient's rights under their insurance plan
- A statement sent to patients explaining how a claim was processed and what was paid (Correct answer)
- A summary of the benefits included in an insurance policy
- A form used to appeal denied insurance claims
Correct answer: A statement sent to patients explaining how a claim was processed and what was paid
An EOB is a statement from the insurance company explaining how a claim was processed, including what was billed, what the insurer paid, and what the patient owes.
Question 2: What distinguishes 'in-network' providers from 'out-of-network' providers?
- In-network care is only available for emergency services
- Out-of-network providers have agreed to accept the insurance plan's negotiated rates; in-network have not
- In-network providers have contracted with the insurance plan at negotiated rates; out-of-network providers have not (Correct answer)
- There is no difference in cost between in-network and out-of-network care
Correct answer: In-network providers have contracted with the insurance plan at negotiated rates; out-of-network providers have not
In-network providers have contracted with the insurance plan and agreed to negotiated rates, resulting in lower out-of-pocket costs for members compared to out-of-network providers.
Question 3: What is a 'formulary' in the context of prescription drug coverage?
- A list of approved diagnostic procedures covered by insurance
- A list of prescription drugs covered by an insurance plan (Correct answer)
- A standard form used to submit prescription claims
- The maximum number of prescription refills allowed per year
Correct answer: A list of prescription drugs covered by an insurance plan
A formulary is the list of prescription drugs covered by an insurance plan, typically organized into tiers that determine the patient's cost-sharing.
Question 4: What does 'subrogation' mean in health insurance?
- The substitution of a less expensive drug for a brand-name drug
- The right of an insurer to recover costs from a third party responsible for a patient's injury (Correct answer)
- The transfer of insurance coverage from one plan to another
- The process of substituting one provider for another in a patient's care team
Correct answer: The right of an insurer to recover costs from a third party responsible for a patient's injury
Subrogation gives an insurer the legal right to pursue a third party that caused an insurance loss to the insured, allowing the insurer to recover amounts it paid for the claim.
Question 5: What is an 'out-of-pocket maximum' (stop-loss) provision in health insurance?
- A clause that stops coverage once a maximum benefit is reached
- A cap on the total amount a member must pay for covered services in a plan year (Correct answer)
- A provision that stops premium increases after a certain age
- A rule that prevents insurers from canceling coverage mid-year
Correct answer: A cap on the total amount a member must pay for covered services in a plan year
The out-of-pocket maximum caps the total amount a member must pay for covered services in a plan year; after reaching it, the insurer pays 100% of covered costs.
Question 6: In managed care, what role does a 'gatekeeper' serve?
- A hospital administrator who controls access to specialty departments
- A primary care physician who coordinates care and authorizes specialist referrals (Correct answer)
- An insurance company representative who approves or denies claims
- A utilization review nurse who manages inpatient stays
Correct answer: A primary care physician who coordinates care and authorizes specialist referrals
In HMO-style managed care, the primary care physician serves as a gatekeeper who coordinates all of a patient's healthcare and must authorize referrals to specialists.
Question 7: What is the purpose of a 'network adequacy' standard?
- To ensure that network providers have adequate malpractice insurance
- To ensure that insurance plan networks have sufficient providers for members to access timely care (Correct answer)
- To set minimum quality standards for providers joining a network
- To determine the maximum number of patients each provider can accept
Correct answer: To ensure that insurance plan networks have sufficient providers for members to access timely care
Network adequacy standards ensure that insurance plans maintain sufficient numbers and types of providers so members can access covered services in a timely and geographically reasonable manner.
CMSM Managed Care and Insurance Operations 2
What is an Explanation of Benefits (EOB)?