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In the paragraph below, a statement contains two pairs of terms enclosed in parentheses. Determine which term in each pair correctly completes the statement. Then select the answer choice containing the two terms that you have chosen.

In the case of Pacificare of Oklahoma, Inc. v. Burrage, the U.S. Court of Appeals for the Tenth Circuit considered whether ERISA preempts medical malpractice claims against health plans based on certain liability theories. In this case, the Tenth Circuit court held that ERISA (should / should not) preempt a liability claim against an HMO for the malpractice of one of its primary care physicians, and therefore the HMO was subject to a claim of (subordinated / vicarious) liability.

A.

Should / subordinated

B.

Should / vicarious

C.

Should not / subordinated

D.

Should not / vicarious

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

A.

Prohibits TPAs from performing insurance functions such as underwriting and claims processing

B.

Prohibits TPAs from entering into an agreement under which the amount of the TPA's compensation is based on the amount of premium or charges the TPA collects

C.

Requires TPAs, upon the termination of a TPA agreement with a group, to immediately transfer all its records relating to the group to the new administrator

D.

Requires TPAs to notify the state insurance department immediately following any material change in the TPA's ownership or control

Determine whether the following statement is true or false:

Although most-favored-nation (MFN) clauses in contracts between health plans and healthcare providers are not per se illegal, they should be reviewed under the rule of reason analysis for antitrust purposes.

A.

True, because the Federal Trade Commission (FTC) ruled that MFN clauses are not per se illegal and the FTC encourages health plans to include them in provider contracts.

B.

True, because although MFN clauses are not per se illegal, they violate antitrust laws if they have a predatory purpose and an anticompetitive effect.

C.

False, because MFN clauses involve decisions by providers concerning the level of fees to charge, and thus they are per se illegal.

D.

False, because MFN clauses are not per se illegal, and thus they are exempt from antitrust laws and regulation by the FTC.

Determine whether the following statement is true or false:

Failing to adopt and implement standards for the prompt investigation and settlement of claims is an example of an activity that would be considered an improper claims practice according to the NAIC Model Unfair Claims Settlement Practices Act.

A.

True

B.

False

The government uses various tools within the realm of two broad categories of public policy-allocative policies and regulatory policies. In the context of public policy, laws that fall into the category of allocative policy include

A.

The Balanced Budget Act (BBA) of 1997

B.

The Health Insurance Portability and Accountability Act (HIPAA) of 1996

C.

Laws affecting health plan quality oversight

D.

Laws specifying procedures for health plan handling of consumer appeals and grievances

Arthur Dace, a plan member of the Bloom Health Plan, tried repeatedly over an extended period to schedule an appointment with Dr. Pyle, his primary care physician (PCP). Mr. Dace informally surveyed other Bloom plan members and found that many people were experiencing similar problems getting an appointment with this particular provider. Mr. Dace threatened to take legal action against Bloom, alleging that the health plan had deliberately allowed a large number of patients to select Dr. Pyle as their PCP, thus making it difficult for patients to make appointments with Dr. Pyle.

Bloom recommended, and Mr. Dace agreed to use, an alternative dispute resolution (ADR) method that is quicker and less expensive than litigation. Under this ADR method, both Bloom and Mr. Dace presented their evidence to a panel of medical and legal experts, who issued a decision that Bloom's utilization management practices in this case did not constitute a form of abuse. The panel's decision is legally binding on both parties.

This information indicates that Bloom resolved its dispute with Mr. Dace by using an ADR method known as:

A.

Corporate risk management

B.

An ombudsman program

C.

An ethics committee

D.

Arbitration

Any willing provider laws have their share of proponents and opponents. Arguments commonly made in opposition to any willing provider laws include

A.

That such laws reduce the number of providers in a health plan's network

B.

That such laws limit consumer choice to coverage options that are more costly than network-based plans

C.

That such laws encourage providers to offer discounts in exchange for patient volume

D.

All of the above

The following statements describe various state benefit mandates. Select the answer choice that describes a state law pertaining to off-label uses for drugs.

A.

State A mandates that health plans provide benefits for experimental drugs for the treatment of terminal diseases such as AIDS and cancer.

B.

State B mandates that health plans have a procedure in place to allow a patient to have a non-formulary drug covered under certain conditions.

C.

State C mandates that, in dispensing generic drugs, pharmacies must label drug containers with the name of the substituted generic medication.

D.

State D mandates that health plans provide benefits for the treatment of one form of cancer with specific drugs that had originally been approved by the Food and Drug Administration (FDA) to treat other forms of cancer.

There are several exceptions to the Ethics in Patient Referrals Act and its amendments (the Stark laws), which prohibit a physician from referring Medicare or Medicaid patients for certain designated services or supplies provided by entities in which the physician has a financial interest. Consider whether the situations described below qualify as exceptions to the Stark laws:

Situation A: Dr. Wong is a physician in the Marvel Health Plan's provider network and has a financial relationship with Marvel arising from the health plan's compensation for his services. Marvel is not a prepaid health plan.

Situation B: Dr. Ryder is a physician in the provider network of the Glen Health Plan, which is not a prepaid health plan. In situations of medical necessity, Dr. Ryder refers Glen patients to a physical therapy clinic that leases office space from him.

Situation C: Dr. Yost has a compensation arrangement with a health plan for providing health services under the Medicare+Choice program.

An arrangement that is exempt from the Stark laws is described in

A.

All of these situations

B.

Situations A and C only

C.

Situation B only

D.

Situation C only

The Sawgrass Health Center is an institution that trains healthcare professionals and performs various clinical and other types of healthcare-related research. Because Sawgrass receives government funding, it is required to provide medical care for the poor. Of the following types of health plans, Sawgrass can best be described as:

A.

A medical foundation

B.

An academic medical center (AMC)

C.

A healthcare cooperative

D.

A community health center (CHC)