With Regard to the Laws and Regulations on Access and Adequacy

question 40

Multiple Choice

With regard to the laws and regulations on access and adequacy of provider networks, it can correctly be stated that:

• A) most access and adequacy guidelines relate to preferred provider organizations (PPOs) or managed indemnity products
• B) corporate practice of medicine laws require staff model HMOs to hire physicians directly, even if the physicians do not own the HMO
• C) any willing provider laws prevent a health plan from making exclusive or semi-exclusive arrangements with a provider or a group of providers
• D) the NAIC Managed Care Plan Network Adequacy Model Act requires states to use provider- enrollee ratios as the sole measure of network adequacy

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Definitions:

ATC

Average Total Cost, which is the sum of all production costs divided by the quantity of output produced, a critical factor in economic analysis of a company's efficiency.

Shut-down Point

The level of operation at which a firm's total revenue is equal to its total variable costs, below which it is more beneficial for a firm to cease production.

Average Variable Cost

The variable cost (cost that changes with production volume) divided by the quantity of output produced.

Profit-maximizing

Refers to the process by which a company determines the price and output level that returns the greatest profit.