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AHIP Exam AHM-520 Topic 5 Question 109 Discussion

Actual exam question for AHIP's AHM-520 exam
Question #: 109
Topic #: 5
[All AHM-520 Questions]

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

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Suggested Answer: A

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Tawna
2 days ago
Accurately estimating IBNR claims is crucial to managing volatility in claims payments. Capitation contracts can also help, but I'm not sure if that's the only way to reduce the risk of negative working capital.
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