Miscellaneous 4

Question 1

EPSDT (pediatric Medicaid benefit)

Answer 1

early & periodic screening, diagnostic, and treatment

Question 2

Medicaid covers about ____% of the U.S. population

Answer 2

20%

Question 3

flexible areas that vary by state for Medicaid

Answer 3

1. eligibility
2. benefits
3. provider payment
4. other aspects

Question 4

Medicaid expansion benchmark plans must include

Answer 4

1. EHBs
2. family planning services
3. prescription drugs
4. meet Mental Health Parity requirements

Question 5

Medicare & Medicaid Alignment

plans will receive separate capitation payments for Medicare Parts A & B, Medicaid, and Part D. Capitation rates for Medicare part A & B & Medicaid are calculated using the following process

Answer 5

1. project baseline costs in absence of the demonstration
2. apply savings %
3. apply withhold %
4. apply any prospective risk adjustment mechanisms
5. apply an retrospective risks mitigation mechanisms (ex. risk corridors)

Question 6

alignment of Medicaid & Medicare benefits will differ by states with respect to:

Answer 6

1. target population
   - all duals or subset
2. geographic area
   - state wide or limited
3. capitated model enrollment process
4. benefits covered

Question 7

Duals compromise ___% of Medicaid population & account for ___% of expenditures

Answer 7

15%, 35%

Question 8

section 1115 waivers allow changes to member cost sharing, such as:

Answer 8

1. all waivers require some level of copayment
2. Iowa & Michigan charge monthly premiums
3. AR, IN, & MI use an approach similar to an HSA in which enrollees make monthly or quarterly contributions

Question 9

Medicaid population

highest % of enrollees?

most expensive enrollees?

Answer 9

children & parents (75%)

elderly & disabled (65% of total spending)

Question 10

ACA efforts to improve Medicaid

Answer 10

1. increased payment rates to Medicare levels for PCPs in 2013-2014
2. included various incentive and initiatives designed to promote more patient-centered, coordinated, & integrated care
3. voluntary reporting of quality of care measure for adults

Question 11

HEDIS

Answer 11

Healthcare Effectiveness Data & Information Set

-standardized data to measure the quality of care

Question 12

MCCSR

Answer 12

Minimum Continuing Capital & Surplus Requirement

-amount of capital required by regulators, similar to risk-based capital in the U.S.

Question 13

life & health insurers whose stock is publicly traded are required by the SEC to prepare financial reports on what basis?

Answer 13

GAAP

generally accepted accounting principles

Question 14

ASOPs related to actuarial opinions for group insurance

Answer 14

1. # 7 - considerations for liability & asset cash flows
2. # 22 - cash flows under moderately adverse scenarios
3. # 28 - consider specific policy & contract provisions affecting assets & liabilities

Question 15

if a company grows faster than g*, it must do 1 of the following:

Answer 15

1. improve operations by increasing
   a. profit margin (P) or
   b. asset turnover ratio (A)
2. alter financial policies by increasing
   a. retention rate (R) or
   b. financial leverage (T)

Question 16

external funding required (for pro-forma method)

Answer 16

= total assets - (liabilities + owner’s equity)

Question 17

Considerations during Risk adjustment implementation

Answer 17

1. budget neutrality
2. timing of the updates
3. data testing & validation
4. HIPAA considerations & controls
5. Newborns

Question 18

“Individual” approach to risk adjustment

Answer 18

transfer an individual’s risk score to a health plan when he/she moves

the capitation rate paid to the plan changes (monthly) based on the enrolled membership.

Question 19

“aggregate” approach to risk adjustment

Answer 19

a composite risk score is calculated across all eligible members enrolled in the experience period. That risk score is used to determine the capitation rate for the entire rating period.

Question 20

time period of prospective & concurrent risk scores

Answer 20

prospective - future period

concurrent - same time period as experience data

Question 21

type of data needed for risk adjustment models

Answer 21

1. age
2. gender
3. eligibility
4. inpatient admissions diagnoses
5. outpatient services
6. pharmacy data

Question 22

sustainable growth rate

Answer 22

limit on company’s growth if there is no external source of capital

Question 23

adjustments in financial reports to reflect unusual or one time items
“normalization”

Answer 23

1. items that qualify as extraordinary for accounting purposes
2. disputed items resolved after the fact
3. expenses discovered after the fact
4. significant IBNR adjustments
5. legal settlements
6. start-up costs for new products

Question 24

total leverage ratio

Answer 24

1. “measure of how much debt the company has”
2. most important liability is claims payable
3. admin cost to process claims is typically included

Question 25

Return on Assets (ROA)

Answer 25

measure of how profitable a business is relative to the capital deployed, regardless of whether the capital is equity or debt

Question 26

advantages of same-size income statement

Answer 26

1. profit margins are divided into relevant components, which aren't a function of company size 2 allows easier comparison between health plans & separate years for same plan

Question 27

same size income statement definition

Answer 27

express all relevant financial components as a % of revenue

Question 28

2 most common profit margins

Answer 28

1. operating profit margin - operating profits / revenue 2. net margin - net income/ revenue Net Margin includes non-operating income (investment income & expense, taxes)

Question 29

nature of assets for the following models: 1. Staff Model 2. IPA 3. ASO

Answer 29

Staff Model: ownership of clinics & hospitals to deliver the care IPA: substantial investments in liquid assets to pay for care that has been received but not paid for (reserves) ASO: few fixed assets. do not deliver care or carry revenues

Question 30

Formulas 1. operating profits 2. total non-operating income 3. pretax income 4. net income

Answer 30

1. total revenue - total expense 2. investment income - interest expense 3. operating profits + total non-operating income 4. pretax income - income taxes

Question 31

if there are no dividends, then ROE =

Answer 31

sustainable growth rate

Question 32

ROE measures

Answer 32

how fast the company's new worth is growing, assuming 0 dividends

Question 33

the significance of GAAP financial statements

Answer 33

1. capture the overall performance of the enterprise | 2. measure owner's value through valuation models

Question 34

concept of the discounted future cash flow model

Answer 34

The value of the company is determined by the amount & timing of distributable cash (dividends)

Question 35

measured value of stock companies

Answer 35

stock price

Question 36

The main types of administrative service agreements

Answer 36

1. self-administration 2. 3rd party administrators 3. funds held by the insurer 4. funds held by the policyholder 5. premium billing

Question 37

Provider Reporting (Canada)

Answer 37

No reporting requirement to providers since they don't take any insurance risk or shar in any insurance profit

Question 38

``` Provider Reporting (U.S.) -provides info for 2 purposes ```

Answer 38

1. provider risk sharing arrangements | 2. medical management reporting

Question 39

``` policyholder reporting (U.S.) -provides info for 3 purposes: ```

Answer 39

1. assessing the results of risk-sharing arrangements 2. fulfilling government reporting requirements (such as ERISA) 3. enabling policyholders to complete their own financial reports (such as actuarial reserves for self-funded policies)

Question 40

Assuris Reporting (Canada)

Answer 40

Consumer protection pans that indemnifies (within limits) the policyholders of life insurance companies that become insolvent.

Question 41

The DCAT tests the company's financial position over a 5-year projection period under "stress" from plausible adverse scenarios of:

Answer 41

1. external environment (economic, government actions, legal) 2. business experience (claims, productivity, sales, surrenders) 3. business planning (investment, products, bonus, capital)

Question 42

Medicaid is the main source of coverage & financing for ____ which are generally not covered by Medicare private insurance

Answer 42

LTSS long term service & supports ex. HCBS & NH

Question 43

For every 1% increase in the unemployment rate, Medicaid enrollment grows by _______

Answer 43

about 1 million enrollees

Question 44

for Medicaid ACA expansion groups, FMAP =

Answer 44

100% in 2014-2016 phases down to 80% in 2020

Question 45

federal share of Medicaid is based on ____

Answer 45

FMAP (federal Medicaid Assistance Percentages) - provides higher reimbursement to states with lower per capita income - min = 50% - max - 83%

Question 46

Medicaid cost-sharing exemptions

Answer 46

1. children under 18 2. preventative services 3. pregnancy-related services 4. emergency services 5. adults with family incomes at or below 100% FPL may only be charged nominal copays 6. aggregate cost sharing < 5% families income

Question 47

new Medicaid eligible adults due to ACA expansions coverage will be provided through a benchmark plan such as

Answer 47

1. BCBS standard plan under the Federal Employer Health Benefits Program 2. a plan offered to state employees 3. largest HMO in the state 4. other coverage approved by the secretary of the Department of Health & Human Services (HHS)

Question 48

Medicaid eligible groups

Answer 48

1. low income families 2. pregnant women 3. people with disabilities 4. people age 65 & older 5. additional populations @ state descretion

Question 49

Medicare plan performance data

Answer 49

1. operational data 2. active monitoring 3. audits 4. prevention & detection of fraud, waste, & abuse 5. compliance program

Question 50

TEFRA

Answer 50

Tax Equity & Fiscal Responsibility Act of 1982

Question 51

MTM (Medicare)

Answer 51

Medication Therapy Management - target beneficiaries with multiple chronic diseases & >= $3K annual drug costs

Question 52

Formula for Net Level Premium (P) used to measure adjustment for interest & policy reserve to compare actual loss ratio to expected loss ratio

Answer 52

P = (policy reserve change plus incurred claims)/ (1+i) - [i / (1+i)*(Beginning Reserve - 50% of incurred claims]

Question 53

LTC profit criteria

Answer 53

1. pre-tax profits 2. post-tax profits 3. return on investments 4. return on equity NOT LOSS RATIOS

Question 54

MLR of individual market before the ACA

Answer 54

43%