Managed Care Organizations: An Overview for Juris Doctor Students

Question 1

Which of the following is NOT a common type of managed care organization?

Accepted Answer

Direct Primary Care (DPC)

Answer

Health Maintenance Organization (HMO)

Answer

Preferred Provider Organization (PPO)

Answer

Point-of-Service (POS)

Question 2

Provider networks in managed care plans are typically characterized by:

Accepted Answer

Narrow networks with a limited number of participating providers

Answer

Broad networks with a wide range of providers

Answer

Flexible networks that can vary depending on the patient's location

Answer

No provider networks, as patients have access to any provider they choose

Question 3

Utilization review in managed care primarily aims to:

Accepted Answer

Control healthcare costs by assessing the necessity and appropriateness of medical care

Answer

Improve patient experience by reducing wait times for appointments

Answer

Ensure that patients receive the highest quality of care by monitoring provider performance

Answer

Identify and prevent fraud or abuse in the healthcare system

Question 4

Which of the following is a potential advantage of managed care organizations for patients?

Accepted Answer

Reduced healthcare costs compared to traditional insurance plans

Answer

Broad access to a wide range of healthcare providers

Answer

Unrestricted flexibility in choosing medical treatments

Answer

Ability to self-refer to specialists without consulting a primary care physician

Question 5

What is the key objective of utilization review in managed care?

Accepted Answer

Verifying medical necessity of healthcare services

Answer

Containing healthcare costs

Answer

Enhancing healthcare quality

Answer

Protecting patients from excessive treatment

Question 6

What is a "capitation payment" in managed care?

Accepted Answer

A monthly payment per patient from an MCO to a provider

Answer

A per-service charge for each healthcare service delivered

Answer

A performance-based bonus for providers meeting quality metrics

Answer

A variable payment based on the volume of patients treated

Question 7

What does the "prudent layperson standard" in managed care entail?

Accepted Answer

MCOs must base decisions on what a reasonable layperson would deem appropriate

Answer

MCOs must rely on the advice of licensed physicians when making decisions

Answer

MCOs are required to prioritize the patient's best interests in decision-making

Answer

MCOs must make decisions based on cost-effectiveness

Question 8

Which of the following is a primary feature of a Preferred Provider Organization (PPO)?

Accepted Answer

Extensive network of healthcare providers

Answer

Closed network of healthcare providers

Answer

Reimbursement of healthcare providers based on a set fee schedule

Answer

Primary care physician serving as a gatekeeper

Question 9

The systematic assessment of the medical necessity, appropriateness, and efficiency of healthcare services provided by a managed care organization is known as:

Accepted Answer

Utilization review

Answer

Peer review

Answer

Case management

Answer

Quality assurance

Question 10

In which type of managed care plan is a primary care physician required to approve referrals to specialists?

Accepted Answer

Health Maintenance Organization (HMO)

Answer

Exclusive Provider Organization (EPO)

Answer

Point-of-Service (POS) Plan

Answer

Indemnity Plan

Question 11

Risk adjustment in managed care refers to the practice of:

Accepted Answer

Adjusting payments to providers based on the health status of their patients

Answer

Transferring financial risks from the managed care organization to providers

Answer

Using financial incentives to encourage providers to reduce healthcare costs

Answer

Stratifying patients into risk categories for targeted interventions

Question 12

Which of the following is NOT a recognized capitation model in managed care?

Accepted Answer

Fee-for-service

Answer

Flat capitation

Answer

Per-member-per-month (PMPM)

Answer

Risk-adjusted capitation

Question 13

The process of negotiating contracts and determining the reimbursement rates for healthcare providers is referred to as:

Accepted Answer

Provider contracting

Answer

Credentialing

Answer

Utilization review

Answer

Quality assurance

Question 14

The process by which a managed care organization assesses the necessity and appropriateness of healthcare services is termed:

Accepted Answer

Utilization review

Answer

Peer review

Answer

Quality assurance

Answer

Risk management

Question 15

A managed care organization that pays providers a set amount per member per month is using a:

Accepted Answer

Capitation model

Answer

Fee-for-service model

Answer

Salary model

Answer

Percentage-of-premium model

Question 16

A provider network that includes only a limited number of healthcare providers is referred to as a:

Accepted Answer

Closed network

Answer

Open network

Answer

Mixed network

Answer

Tiered network

Question 17

A managed care organization that contracts with a group of independent physicians to provide services to members is known as an:

Accepted Answer

IPA-model HMO

Answer

Staff-model HMO

Answer

Network-model HMO

Answer

Point-of-service plan

Question 18

Which of the following is a common concern raised about managed care organizations?

Accepted Answer

Limited patient choice

Answer

Increased administrative costs

Answer

Higher quality of care

Answer

Greater transparency

Question 19

Which of the following is NOT a managed care organization structure?

Accepted Answer

Indemnity plan

Answer

Health maintenance organization (HMO)

Answer

Preferred provider organization (PPO)

Answer

Point-of-service plan (POS)

Question 20

Regarding coverage denial appeals under managed care plans, patients have the right to:

Accepted Answer

External review by an independent entity

Answer

Internal plan appeals only

Answer

Appeals only for medical necessity denials

Answer

No appeal rights

Question 21

Analyze the advantages and disadvantages of managed care organizations, considering their impact on healthcare quality, cost, and accessibility.

Accepted Answer

Managed care organizations can enhance healthcare quality by optimizing care and minimizing unnecessary procedures.

Accepted Answer

Managed care organizations may not consistently lower healthcare costs for consumers.

Accepted Answer

Managed care organizations may restrict access to healthcare services for specific populations, such as those with low incomes or without insurance.

Question 22

Define utilization review and explain its primary objective in managed care.

Accepted Answer

Utilization review involves assessing the appropriateness, necessity, and efficiency of medical services in managed care to control healthcare costs.

Answer

Utilization review is a type of health insurance plan that covers a specific range of healthcare services.

Answer

Utilization review solely focuses on improving healthcare quality, disregarding cost implications.

Question 23

Which of the following is NOT a type of managed care plan?

Accepted Answer

Capitation plan

Answer

Health maintenance organization (HMO)

Answer

Preferred provider organization (PPO)

Answer

Point-of-service plan (POS)

Question 24

Which managed care organization (MCO) strategy encourages the efficient use of healthcare resources by incentivizing healthcare providers and engaging patients?

Accepted Answer

Disease management programs

Answer

Provider network design

Answer

Capitation

Question 25

What is the primary objective of utilization review in managed care organizations?

Accepted Answer

To assess the medical necessity and appropriateness of healthcare services for enrollees

Answer

To identify potential areas of cost savings within a healthcare system

Answer

To determine if a patient's condition qualifies as a disability

Answer

To compile data on healthcare utilization patterns

Question 26

Which of the following is NOT a distinguishing feature of a traditional HMO?

Accepted Answer

Allows enrollees to seek care from any provider in or out of network

Answer

Provides comprehensive coverage for a fixed monthly premium

Answer

Utilizes a gatekeeper system, typically a primary care physician

Answer

Emphasizes primary care and preventive services

Question 27

What legal standard is commonly applied to judicial reviews of managed care organizations' decisions regarding coverage and care?

Accepted Answer

Arbitrary and capricious review

Answer

Standard of care review

Answer

Summary judgment review

Answer

De novo review

Question 28

Which federal statute established comprehensive oversight of managed care organizations?

Accepted Answer

Health Maintenance Organization Act (HMO Act) of 1973

Answer

Affordable Care Act (ACA) of 2010

Answer

Medicare Access and CHIP Reauthorization Act (MACRA) of 2015

Answer

Health Insurance Portability and Accountability Act (HIPAA) of 1996

Question 29

What is the primary function of a provider network in a managed care organization?

Accepted Answer

To establish a group of healthcare providers from which enrollees can access care

Answer

To negotiate lower rates with providers on behalf of enrollees

Answer

To provide administrative support to the managed care organization

Answer

To monitor the quality of care provided to enrollees

Question 30

What term describes the process of evaluating the appropriateness and necessity of healthcare services received by enrollees?

Accepted Answer

Utilization review

Answer

Quality assurance

Answer

Cost-benefit analysis

Answer

Medical necessity determination

Question 31

Which type of managed care plan contracts with a network of providers and pays a flat fee per patient enrolled?

Accepted Answer

Health Maintenance Organization (HMO)

Answer

Exclusive Provider Organization (EPO)

Answer

Point-of-Service (POS) Plan

Answer

Preferred Provider Organization (PPO)

Question 32

What is the primary objective of utilization review in managed care?

Accepted Answer

To assess the necessity and appropriateness of medical services provided.

Answer

To solely reduce healthcare costs

Answer

To enhance patient satisfaction

Question 33

Which of the following is NOT a legal requirement for managed care organizations under the Health Maintenance Organization Act (1973)?

Accepted Answer

Providing unrestricted access to all licensed practitioners

Answer

Establishing a grievance procedure

Answer

Providing a comprehensive range of health services

Question 34

Identify a common criticism of managed care plans.

Accepted Answer

Limited access to specialist physicians

Answer

Increased patient autonomy

Answer

Lower premiums

Answer

Improved overall quality of care

Question 35

What is the essence of the ERISA preemption provision?

Accepted Answer

It exempts employer-sponsored health plans from most state laws and regulations.

Answer

It prohibits managed care organizations from implementing utilization review.

Answer

It mandates a minimum level of health coverage for all plans.

Question 36

Which of the following is a potential benefit of managed care?

Accepted Answer

Reduced healthcare costs

Answer

Increased patient autonomy

Answer

Guaranteed quality of care

Answer

Improved access to healthcare services

Question 37

What is the primary role of the National Committee for Quality Assurance (NCQA) in managed care?

Accepted Answer

To establish and implement quality standards for managed care organizations.

Answer

To regulate and enforce compliance for managed care organizations

Answer

To provide financial assistance to managed care organizations.

Question 38

Which method of provider payment is commonly used in managed care?

Accepted Answer

Capitation

Answer

Salary

Answer

Fee-for-service

Answer

Per diem

Question 39

What was the primary aim of the Patient Protection and Affordable Care Act (PPACA) in relation to managed care?

Accepted Answer

To expand access to managed care plans and enhance their quality.

Answer

To eliminate managed care plans.

Answer

To increase the regulation of managed care plans.

Question 40

Which characteristic is a defining feature of a Preferred Provider Organization (PPO)?

Accepted Answer

PPOs offer a network of contracted providers with discounted rates.

Answer

PPOs provide comprehensive coverage for all medical expenses.

Answer

PPOs mandate members to exclusively use in-network providers.

Question 41

What is the primary objective of utilization review in managed care systems?

Accepted Answer

To evaluate the medical necessity and cost-effectiveness of healthcare services.

Answer

To negotiate contracts and agreements with healthcare providers.

Answer

To determine patient eligibility for coverage under the plan.

Question 42

Which of the following is NOT considered a potential advantage of managed care systems?

Accepted Answer

Increased patient choice and flexibility

Answer

Improved quality of care

Answer

Reduced healthcare costs

Answer

Enhanced access to healthcare services

Question 43

In a managed care plan, what is the primary function of a gatekeeper?

Accepted Answer

To control and manage a patient's access to specialist care.

Answer

To conduct utilization reviews.

Answer

To provide financial counseling to patients.

Answer

To negotiate contracts with healthcare providers.

Question 44

Which type of managed care organization assumes full financial risk for providing healthcare services?

Accepted Answer

Health maintenance organization (HMO)

Answer

Point-of-service (POS) plan

Answer

Preferred provider organization (PPO)

Answer

Exclusive provider organization (EPO)

Question 45

What is the purpose of a formulary in a managed care plan?

Accepted Answer

To establish a list of approved medications covered by the plan.

Answer

To track medication usage and identify potential drug interactions.

Answer

To determine the patient's cost-sharing amount for prescription drugs.

Question 46

What is the primary objective of value-based purchasing (VBP) in managed care?

Accepted Answer

To incentivize healthcare providers for delivering high-quality, cost-effective care.

Answer

To increase patient satisfaction with healthcare services.

Answer

To reduce the number of unnecessary medical procedures performed.

Question 47

Which of the following is not a characteristic of managed care plans?

Accepted Answer

Unlimited choice of healthcare providers

Answer

Emphasize preventive care

Answer

Coordinate care among healthcare providers

Answer

Negotiate discounted rates for services

Question 48

Provider networks in managed care typically include:

Accepted Answer

Physicians and hospitals that have agreed to provide services at negotiated rates.

Answer

Only physicians who are employed by the managed care organization.

Answer

Hospitals that are exclusively owned by the managed care organization.

Question 49

Utilization review in managed care involves:

Accepted Answer

Assessing the medical necessity and appropriateness of healthcare services before they are provided.

Answer

Denying coverage for any services deemed experimental or investigational.

Answer

Setting strict limits on the number of visits or procedures a patient can receive.

Question 50

The Employee Retirement Income Security Act (ERISA) regulates:

Accepted Answer

Self-funded employer-sponsored health plans.

Answer

Only HMOs and PPOs.

Answer

All types of managed care plans, regardless of funding source.

Answer

Only POS plans and fee-for-service arrangements.

Question 51

Which of the following is a legal duty imposed on managed care organizations?

Accepted Answer

Fiduciary duty to act in the best interests of their enrollees.

Answer

Warranty of cure for all covered conditions.

Answer

Duty to defend their enrollees in malpractice lawsuits.

Question 52

Which of the following is a potential challenge to the effectiveness of managed care?

Accepted Answer

Balancing cost control with quality of care.

Answer

Improved coordination of care and reduced fragmentation.

Answer

Lower premiums and out-of-pocket costs for consumers.

Question 53

The future of managed care is likely to be influenced by:

Accepted Answer

Advancements in technology, data analytics, and personalized medicine.

Answer

An increase in the number of uninsured Americans.

Answer

A repeal of the ACA.

Answer

A decrease in the demand for healthcare services.

Question 54

Managed care has been credited with:

Accepted Answer

Reducing healthcare costs through efficient delivery of services.

Answer

Curing all major diseases.

Answer

Eliminating the need for health insurance.