Health Plan Finance and Risk Management (AHM-520) - AHIP Actual Exam Questions
Last updated on April 11, 2026
The traditional financial ratios that analysts use to study a health plan's GAAP-based financial statements include liquidity ratios, activity ratios, leverage ratios, and profitability ratios. Of these categories of ratios, analysts are most likely to use
Liquidity ratios to measure a health plan's ability to meet its current liabilities
Activity ratios relate the returns of a health plan to its sales, total revenues, assets, stockholders' equity, capital, surplus, or stock share price
Leverage ratios to measure how quickly a health plan converts specified financial statement items into premium income or cash
Profitability ratios to measure the effect that fixed costs have on magnifying a health plan's risk and return
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With regard to the Medicaid program in the United States, it can correctly be stated that
The federal government provides none of the funding for state Medicaid programs
Federal Medicaid law is different from Medicare law in that the federal government explicitly sets forth the methodology for payment of Medicaid-contracting plans but not Medicare-contracting plans
A state's payment to health plans for providing Medicaid services cannot be more than it would have cost the state to provide the services under Medicaid fee-for-service (FFS)
States are prohibited from carving out specific services from the capitation rate that health plans receive for providing Medicaid services
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This concept, which holds that a company should record the amounts associated with its business transactions in monetary terms, assumes that the value of money is stable over time. This concept provides objectivity and reliability, although its relevance may fluctuate. From the following answer choices, choose the name of the accounting concept that matches the description.
Measuring-unit concept
Full-disclosure concept
Cost concept
Time-period concept
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The following statements are about a health plan's capital budgeting process. Select the answer choice containing the correct statement.
Under sensitivity analysis, a health plan ranks all capital project proposals according to expected rates of return and accepts only those proposals with the highest rankings.
A project that has a profitability index of 0.0 has an NPV of zero.
An underlying assumption of capital budgeting is that a health plan should keep its investing decisions separate from its financing decisions.
Under the internal rate of return (IRR) method, if a project's IRR is less than a health plan's weighted average cost of capital (WACC), then the project's benefits should exceed its costs and the health plan should accept the project.
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Reconciliation is the process by which a health plan assesses providers' performance relative to contractual terms and reimbursement. With regard to this process, it can correctly be stated that
A reconciliation typically includes payment to the providers of any withholds or bonuses due to them
A health plan typically should conduct a reconciliation immediately after the evaluation period has ended
Most agreements between health plans and providers require reconciliations to be performed quarterly
A health plan typically should not conduct reconciliation for a provider until the plan has received all claims or other documentation of services that the physician provided during the evaluation period
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