Direct Contracting and Third-Party Contracting in Healthcare: Q&A for Final Exam Review, Exams of Nursing

Download Direct Contracting and Third-Party Contracting in Healthcare: Q&A for Final Exam Review and more Exams Nursing in PDF only on Docsity! HFMA CSPR Course 10 Final Exam Review Q & A 2024 1. What is the primary difference between direct contracting and third- party contracting in the healthcare industry? A. Direct contracting involves an agreement between the payer and provider, while third-party contracting involves a third-party intermediary. B. Direct contracting involves a fixed fee schedule, while third-party contracting involves a negotiated fee-for-service arrangement. C. Direct contracting is limited to specific services, while third-party contracting covers a range of services. D. Direct contracting is more expensive than third-party contracting due to administrative costs. Answer: A - Direct contracting involves an agreement between the payer and provider, while third-party contracting involves a third-party intermediary. Rationale: Direct contracting allows for direct negotiation between the payer and provider, while third-party contracting involves a third-party intermediary, such as an insurance company or managed care organization. 2. What is a Silent PPO in the context of healthcare contracting? A. A type of PPO that doesn't require prior authorization for services. B. A PPO that operates without the knowledge or consent of the provider. C. A PPO that offers discounted rates to members but not to providers. D. A PPO that only covers services from out-of-network providers. Answer: B - A PPO that operates without the knowledge or consent of the provider. Rationale: A Silent PPO is a type of PPO that allows payers to access discounted rates without the knowledge or consent of the provider, often leading to lower reimbursement rates. 3. What is the main difference between a non-directed PPO and a traditional PPO? A. Non-directed PPOs require members to choose a primary care provider, while traditional PPOs do not. B. Non-directed PPOs prioritize cost savings over network choice, while traditional PPOs focus on provider network access. C. Non-directed PPOs only cover services from in-network providers, while traditional PPOs offer out-of-network coverage. D. Non-directed PPOs are typically more expensive for members Answer: B) Aligns incentives for cost control Rationale: Risk-sharing encourages both parties to work towards cost- effective care delivery. 1. What is the primary purpose of an indemnity clause in a contract? A) To provide insurance against potential losses B) To allocate risk between the contracting parties C) To establish the price of the contract D) To define the scope of services provided Answer: B) To allocate risk between the contracting parties Rationale: An indemnity clause is designed to allocate risk for losses that may arise from certain events or actions, typically by requiring one party to compensate the other. 2. Which clause would you examine to understand the actions that will lead to the termination of a contract? A) Force Majeure B) Termination Clause C) Confidentiality Clause D) Non-Compete Clause Answer: B) Termination Clause Rationale: The Termination Clause explicitly states the conditions under which the parties can terminate the contract, including the actions or failures to act that would lead to such a decision. 3. In the context of contract law, what does 'force majeure' refer to? A) A standard clause in employment contracts B) An unforeseeable circumstance that prevents someone from fulfilling a contract C) A breach of contract due to negligent behavior D) A mutual agreement to amend the contract terms Answer: B) An unforeseeable circumstance that prevents someone from fulfilling a contract Rationale: 'Force majeure' refers to extraordinary events or circumstances beyond the control of the parties, such as natural disasters or war, that prevent one or both parties from fulfilling their contractual obligations. 4. What is the function of a 'severability' clause in a contract? A) To ensure the entire contract is void if one part is invalid B) To allow the contract to continue in effect even if one part is found to be invalid C) To bind the parties to additional agreements not specified in the contract D) To outline the responsibilities of third-party beneficiaries Answer: B) To allow the contract to continue in effect even if one part is found to be invalid Rationale: A 'severability' clause allows the remaining parts of a contract to remain in effect even if one part is declared invalid or unenforceable, thus preserving the rest of the agreement. 5. What does a 'non-compete' clause in an employment contract typically restrict? A) The employer's right to hire competitors' employees B) The employee's ability to work in a similar profession or trade upon leaving the company C) The use of proprietary information after the employment ends D) The geographical area where the company can operate Answer: B) The employee's ability to work in a similar profession or trade upon leaving the company Rationale: A 'non-compete' clause restricts an employee's ability to work in a similar profession or trade, often within a certain geographic area and for a specified period, after leaving the company to prevent competition against the employer. 6. Which type of clause would you include in a contract to keep its terms confidential? A) Arbitration Clause B) Confidentiality Clause C) Liquidated Damages Clause D) Warranty Clause Answer: B) Confidentiality Clause Rationale: A Confidentiality Clause is included to ensure that the information about the contract's terms and any sensitive information exchanged during its execution remains confidential. 7. What is the main purpose of a 'liquidated damages' clause in a contract? A) To specify the amount of damages payable in the event of a breach B) To penalize the party that breaches the contract C) To cover the costs of legal action in case of a dispute D) To provide a warranty for goods or services Answer: A) To specify the amount of damages payable in the event of a breach Rationale: A 'liquidated damages' clause specifies a predetermined amount of money that must be paid as damages in the event of a contract breach, which is agreed upon by both parties at the time of contract formation. 8. What is typically the focus of a 'warranty' clause in a contract? A) Guaranteeing the quality of goods or services provided B) Ensuring timely payment C) Providing insurance coverage for the goods D) Outlining the procedure for contract termination Answer: A) Guaranteeing the quality of goods or services provided Rationale: A 'warranty' clause guarantees the condition of the goods or services provided and may outline the remedies available if the goods or services do not meet the specified standards. 9. In a contract, what is the purpose of an 'arbitration' clause? A) To determine the governing law of the contract B) To establish a method for resolving disputes outside of court C) To set the duration of the contract D) To define the payment terms Answer: B) To establish a method for resolving disputes outside of court Rationale: An 'arbitration' clause sets forth an agreement that disputes will be resolved through arbitration, which is a private, judicial determination of a dispute, by an independent third party. 10. What does a 'choice of law' clause in a contract determine? A) The penalties for breaching the contract B) The jurisdiction that will govern the contract's legal interpretations C) The method of payment for goods or services