AHIP Exam AHM-520 Topic 2 Question 107 Discussion

Actual exam question for AHIP's AHM-520 exam

Question #: 107
Topic #: 2

A health plan may experience negative working capital whenever healthcare expenses generated by plan members exceed the premium income the health plan receives.

Ways in which a health plan can manage the volatility in claims payments, and therefore reduce the risk of negative working capital, include:

1. Accurately estimating incurred but not reported (IBNR) claims

2. Using capitation contracts for provider reimbursement

ABoth 1 and 2

B1 only

C2 only

DNeither 1 nor 2

Show Suggested Answer

Suggested Answer: A

by Viva at Feb 11, 2025, 02:17 PM

Limited Time Offer

25%

Off

Get Premium AHM-520 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Brett

1 months ago

Using capitation contracts for provider reimbursement can also help in managing volatility in claims payments.

upvoted 0 times

...

Matthew

1 months ago

I'm going with option A. Combining both strategies is the way to go. It's like using both belt and suspenders - double the protection!

upvoted 0 times

...

Melodie

1 months ago

I agree, accurately estimating IBNR claims can help reduce the risk of negative working capital.

upvoted 0 times

...

Marta

1 months ago

This is a classic case of 'why not both?' Both options are effective in managing claims volatility and working capital risks.

upvoted 0 times

...

Staci

1 months ago

I agree with both options. Capitation contracts can help smooth out the cash flow, and IBNR estimation is essential for financial planning.

upvoted 0 times

Vanesa

11 days ago

A) Both 1 and 2

upvoted 0 times

...

Trinidad

1 months ago

Accurately estimating IBNR claims is crucial for managing claims volatility. But using capitation contracts is also a great way to reduce the risk of negative working capital.

upvoted 0 times

Genevive

24 days ago

Accurately estimating IBNR claims is important, but capitation contracts can also help manage claims volatility.

upvoted 0 times

...

Ludivina

27 days ago

A) Both 1 and 2

upvoted 0 times

...

Scarlet

2 months ago

I think managing claims payments is crucial for a health plan.

upvoted 0 times

...