Free Practice Questions for ASHRM CPHRM Exam

Within Health Care Risk Management frameworks endorsed by ASHRM and the American Hospital Association Certification Center, early return-to-work programs are recognized as one of the most effective strategies for controlling workers' compensation costs. These programs facilitate the safe and timely return of injured employees to modified or transitional duty consistent with medical restrictions.

Workers’ compensation costs are significantly influenced by wage replacement benefits and duration of disability. By reducing the length of time an employee remains off work, early return-to-work initiatives directly decrease indemnity payments, lower claim severity, and improve overall claim outcomes. Additionally, such programs support employee morale, maintain productivity, and reduce the likelihood of prolonged disability or litigation.

While comprehensive safety analyses contribute to injury prevention and long-term risk reduction, their direct cost impact is preventive rather than immediately measurable in claim severity. Employee assistance programs focus primarily on behavioral health and personal support, not claim cost containment. Disciplinary actions do not constitute a structured risk financing strategy and may negatively affect organizational culture.

Therefore, from a risk financing perspective, early return-to-work programs have demonstrated measurable effectiveness in reducing workers' compensation program costs.

Marketing claims can create liability exposure when they reasonably induce reliance and the patient suffers harm. Depending on jurisdiction and facts, plaintiffs may allegeapparent agency(belief that physicians acted as the HMO’s agents),vicarious liability, negligent credentialing, or negligent misrepresentation/consumer protection claims if statements are misleading. Risk management objectives include reviewing public claims for accuracy, ensuring marketing does not overpromise clinical capability, and aligning network adequacy and credentialing with representations. Clear disclosures about independent contractors may help but do not always defeat apparent agency claims. Controls include legal review of advertising, credentialing rigor, quality oversight, and complaint surveillance to detect mismatches between marketing and actual service capability.

Under Health Care Risk Management standards recognized by ASHRM and the American Hospital Association Certification Center, the Safe Medical Devices Act SMDA is part of the FDA’s post market surveillance system for medical devices. The SMDA requires healthcare facilities to report to the FDA and, in some cases, to the manufacturer when a medical device has or may have caused or contributed to a patient death or serious injury. This mandatory reporting system enhances device safety monitoring and supports regulatory oversight after products enter the market.

EMTALA governs emergency medical screening and stabilization obligations, not device reporting. The Occupational Safety and Health Act focuses on workplace safety for employees rather than patient device-related injuries. Patient Safety Organizations operate under the Patient Safety and Quality Improvement Act and facilitate voluntary reporting of patient safety events, but they do not replace FDA-mandated device reporting requirements.

Legal and regulatory objectives in healthcare risk management emphasize compliance with federal reporting statutes, timely submission of required reports, and maintenance of documentation to mitigate regulatory exposure. Therefore, the Safe Medical Devices Act is the correct answer regarding mandatory FDA post market surveillance reporting for device-related deaths or injuries.

According to Health Care Risk Management standards supported by ASHRM and the American Hospital Association Certification Center, while parents generally serve as surrogate decision-makers for minors, their authority is not absolute. When refusal of treatment places a child at significant risk of serious harm or death, healthcare providers have an ethical and legal obligation to act in the best interests of the child.

In cases involving life-sustaining treatment for a premature infant, refusal of a medically necessary blood transfusion may constitute potential medical neglect if it threatens the infant’s survival. When disagreement persists after appropriate communication and ethics consultation, and the infant’s life is at risk, the appropriate step is to seek judicial intervention. Contacting legal counsel to obtain an emergency court order allows the state to exercise its parens patriae authority to protect the child’s welfare.

An ethics consultation may help clarify values and promote dialogue but does not override urgent medical necessity. Simply prohibiting or proceeding without legal authority exposes the organization to liability.

Legal and regulatory objectives emphasize protecting vulnerable patients while respecting due process. Therefore, seeking an emergency court order through legal counsel is the appropriate action.

A safety audit must be anchored to explicitstandards—policies, regulatory requirements, evidence-based guidelines, and internal procedures—so observations can be evaluated objectively. Without defined criteria, the audit becomes subjective and inconsistent, limiting its usefulness and defensibility. Risk management objectives for ED audits include verifying compliance with high-risk workflows (triage, medication storage, high-alert meds, behavioral health safety, EMTALA processes, handoff communication, alarm management), identifying hazards (environmental risks, crowding, staffing mismatch), and ensuring corrective actions are tracked to closure. A written standard also supports repeatability—audits can be compared over time, and improvements can be measured. This approach aligns with quality management principles: define the requirement, assess the gap, implement controls, and monitor effectiveness.

According to Health Care Risk Management principles supported by ASHRM and the American Hospital Association Certification Center, total incurred amounts include both paid amounts and reserves. Incurred expense equals expense paid plus expense reserves. Incurred indemnity equals indemnity paid plus indemnity reserves.

For Year 4:

Total incurred expense = $25,000 reserves + $15,000 paid = $40,000.

Total incurred indemnity = $150,000 reserves + $75,000 paid = $225,000.

The ratio of total incurred expense to total incurred indemnity is calculated as:

$40,000 ÷ $225,000 = 0.1778, which rounds to approximately 0.18.

However, among the answer options provided, the closest value is 0.20 only if rounded broadly. Since precise calculation yields approximately 0.18, the mathematically correct ratio is approximately 0.18.

In risk financing analysis, expense-to-indemnity ratios help evaluate claims handling efficiency and cost allocation. Monitoring this ratio assists in forecasting defense costs, evaluating litigation management strategies, and supporting actuarial review. Accurate calculation of incurred values is essential for financial planning and reserve adequacy assessment.

Leaving an at-risk patient unattended during/after medication administration is typically anactive failureoccurring at thesharp end—the point of direct care delivery. Active errors are the observable actions/omissions by frontline personnel that can immediately contribute to harm (e.g., failure to monitor sedation, failure to reassess after opioids). Risk management objectives, however, require looking beyond the individual act: Was staffing insufficient? Was monitoring policy unclear? Were alarms ineffective? Was there inadequate training or workload overload? Those “blunt end” conditions create latent risk that increases the likelihood of sharp-end failures. Proper classification helps organizations respond with systems fixes (monitoring standards, escalation triggers, staffing acuity tools, continuous pulse oximetry/capnography policies where appropriate) rather than blaming individuals alone.

Verbal/telephone orders are widely recognized aserror-pronebecause they can be misheard, misunderstood, or transcribed incorrectly—especially with sound-alike drug names, confusing numerals (15 vs 50), background noise, accents, and interruptions. ISMP and patient safety advisories recommend minimizing verbal orders whenever possible and using safeguards such as read-back/confirm-back, spelling drug names, stating digits individually, and documenting promptly. Risk management objectives include reducing reliance on memory and imperfect communication by prioritizing written or electronic orders (CPOE), standardizing when verbal orders are permitted (true emergencies), and auditing compliance to prevent unsafe normalization. Because medication errors can cause severe harm, controlling verbal order risk is a high-yield safety intervention and improves legal defensibility by aligning practice with recognized safety recommendations.

The Healthcare Integrity and Protection Data Bank (HIPDB) was created to combat healthcare fraud and abuse; it isno longer operational as a separate bank, and its content was merged into the NPDB. Reporting and querying are governed by HRSA rules defining authorized entities, including certain peer review and oversight organizations in specific reporting frameworks. Risk management objectives include ensuring organizations understand which actions must be reported, ensure due process, and comply with data handling rules. Proper reporting supports system integrity by preventing practitioners or entities with serious adverse actions from moving undetected across organizations. For hospitals and health plans, this strengthens credentialing and contracting decisions, reducing organizational exposure to negligent credentialing and improper network participation risks.

According to Health Care Risk Management standards supported by ASHRM and the American Hospital Association Certification Center, determining coverage requires careful review of the applicable insurance policies and policy structure. Because the alleged negligence occurred 10 years earlier, the risk manager must first review both the current policy and the policy in effect at the time of the delivery. Coverage depends on the specific policy terms, limits, endorsements, and retroactive dates applicable during the relevant policy period.

It is also critical to determine whether the policy is written on an occurrence or claims-made basis. Under an occurrence policy, coverage is triggered by the date of the incident, regardless of when the claim is filed. Under a claims-made policy, coverage depends on when the claim was reported and whether appropriate tail or extended reporting coverage exists.

Identifying co-defendants’ coverage may be relevant to contribution or indemnification but does not determine the hospital’s own coverage. Discussion with defense counsel may assist in strategy but should follow preliminary internal coverage analysis.

Risk financing objectives emphasize accurate policy review and understanding of trigger mechanisms before executive discussions. Therefore, reviewing the relevant policies and determining policy type are essential first steps.