1.An HMO has a Point of Service (POS) option for its members, but will pay only
ID: 2632371 • Letter: 1
Question
1.An HMO has a Point of Service (POS) option for its members, but will pay only 80
percent of approved charges. If a member goes out of network for a medical
procedure with a charge of $2,000, of which $1,200 is approved, how much must the
member pay?
2. A nursing home contracts with an HMO for skilled nursing care at $2.00 PMPM. If
costs are expected to average $120 per day, what is the maximum utilization of days
per 1,000 members that the nursing home can experience before it begins to lose
money?
Explanation / Answer
1. Payment of a member is 80% on the approved charge.
Therefore, the payment is $1,200 * 80% = $960 (since $1,200 is approved out of total $2,000)
The answer is $960.
2. Total cost per month is the multiplication of $2 and 1,000 members. $2 * 1,000 = $2,000
Since the cost per day is $120, the total cost should be divided by $120 to get approximate days.
Days = $2,000 / $120 = 16.66 = 17 days (Answer)
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