CPHRM Practice Test – Healthcare Risk
Management, Patient Safety, Legal Issues, Claims
and Regulatory Compliance
1. A risk manager is leading a Root Cause Analysis (RCA) after a wrong-site surgery. To ensure
the most effective process, who should be excluded from the core investigative team?
A. A quality improvement specialist
B. The surgeon who performed the procedure
C. The Chief Medical Officer
D. A nurse from a different surgical unit
Correct Answer: B
Explanation: While the surgeon involved must be interviewed, including them in the core
RCA investigative team can create bias and stifle open communication due to fear of blame.
The goal of an RCA is to identify system-wide failures rather than individual culpability,
aligning with the ‘Just Culture’ framework. A common trap is assuming all stakeholders in
the event must sit on the analysis team, but neutrality is essential for a credible finding.
2. An uninsured patient arrives at the Emergency Department with severe chest pain but is
hemodynamically stable. The hospital wants to transfer the patient to a county facility.
According to EMTALA, what is the first requirement?
A. Provide a Medical Screening Examination (MSE)
B. Verify the patient’s insurance status
,C. Contact the receiving facility for acceptance
D. Obtain the patient’s written consent for transfer
Correct Answer: A
Explanation: EMTALA mandates that any individual who comes to the emergency
department must receive a Medical Screening Examination (MSE) to determine if an
emergency medical condition exists, regardless of their ability to pay. Transferring a
patient before stabilizing them or providing a full MSE is a ‘patient dumping’ violation.
Candidates often mistake administrative tasks, like contacting the receiving hospital, as the
first step, but the clinical screening is the non-negotiable legal priority.
3. A healthcare organization is transitioning from a ‘claims-made’ professional liability policy
to an ‘occurrence’ policy. What must the risk manager purchase to ensure there is no gap in
coverage for prior incidents?
A. A self-insured retention (SIR) package
B. Tail coverage (Extended Reporting Period)
C. A reinsurance treaty
D. An umbrella policy
Correct Answer: B
Explanation: Claims-made policies only cover claims that are both made and reported
during the policy period; therefore, tail coverage is necessary to cover future claims arising
from incidents that happened while the claims-made policy was active. Without this, the
,organization faces a significant ‘nose’ gap when switching to an occurrence-based model. A
common exam trap is confusing an umbrella policy, which provides excess limits, with tail
coverage, which provides extended time for reporting.
4. A physician wants to refer Medicare patients to an imaging center in which his wife holds a
20% ownership interest. Which law is most likely to be violated by this arrangement?
A. The Sherman Antitrust Act
B. The False Claims Act
C. The Anti-Kickback Statute
D. The Stark Law (Physician Self-Referral Law)
Correct Answer: D
Explanation: The Stark Law prohibits physicians from referring Medicare patients for
‘designated health services’ (like imaging) to entities with which the physician or an
immediate family member has a financial relationship, unless an exception applies. Unlike
the Anti-Kickback Statute, Stark Law is a strict liability statute, meaning intent does not
need to be proven to establish a violation. Many students confuse this with the Anti-
Kickback Statute, which covers a broader range of referrals but requires proof of
‘remuneration’ to induce business.
, 5. A hospital is conducting a Failure Mode and Effects Analysis (FMEA) on a new robotic
pharmacy dispensing system. What is the primary advantage of using FMEA over RCA in this
scenario?
A. FMEA identifies why an event occurred after the fact
B. FMEA is less time-consuming than a Root Cause Analysis
C. FMEA is a proactive tool used to prevent errors before they happen
D. FMEA focuses solely on human error and disciplinary action
Correct Answer: C
Explanation: FMEA is a prospective risk assessment tool used to identify potential failure
points in a process before a product or system is implemented. In contrast, RCA is reactive,
occurring after an adverse event has already taken place. The trap is thinking FMEA and
RCA are interchangeable; however, FMEA calculates a Risk Priority Number (RPN) to rank
risks by severity, occurrence, and detectability.
6. During a deposition, a risk manager is asked to produce a peer review report concerning a
specific physician’s performance. Why would the risk manager typically object to this
request?
A. State statutes usually provide privilege and confidentiality for peer review activities
B. The report is considered attorney-client work product
C. The report is protected under HIPAA’s Privacy Rule
D. The physician has not yet been served with a formal complaint
Management, Patient Safety, Legal Issues, Claims
and Regulatory Compliance
1. A risk manager is leading a Root Cause Analysis (RCA) after a wrong-site surgery. To ensure
the most effective process, who should be excluded from the core investigative team?
A. A quality improvement specialist
B. The surgeon who performed the procedure
C. The Chief Medical Officer
D. A nurse from a different surgical unit
Correct Answer: B
Explanation: While the surgeon involved must be interviewed, including them in the core
RCA investigative team can create bias and stifle open communication due to fear of blame.
The goal of an RCA is to identify system-wide failures rather than individual culpability,
aligning with the ‘Just Culture’ framework. A common trap is assuming all stakeholders in
the event must sit on the analysis team, but neutrality is essential for a credible finding.
2. An uninsured patient arrives at the Emergency Department with severe chest pain but is
hemodynamically stable. The hospital wants to transfer the patient to a county facility.
According to EMTALA, what is the first requirement?
A. Provide a Medical Screening Examination (MSE)
B. Verify the patient’s insurance status
,C. Contact the receiving facility for acceptance
D. Obtain the patient’s written consent for transfer
Correct Answer: A
Explanation: EMTALA mandates that any individual who comes to the emergency
department must receive a Medical Screening Examination (MSE) to determine if an
emergency medical condition exists, regardless of their ability to pay. Transferring a
patient before stabilizing them or providing a full MSE is a ‘patient dumping’ violation.
Candidates often mistake administrative tasks, like contacting the receiving hospital, as the
first step, but the clinical screening is the non-negotiable legal priority.
3. A healthcare organization is transitioning from a ‘claims-made’ professional liability policy
to an ‘occurrence’ policy. What must the risk manager purchase to ensure there is no gap in
coverage for prior incidents?
A. A self-insured retention (SIR) package
B. Tail coverage (Extended Reporting Period)
C. A reinsurance treaty
D. An umbrella policy
Correct Answer: B
Explanation: Claims-made policies only cover claims that are both made and reported
during the policy period; therefore, tail coverage is necessary to cover future claims arising
from incidents that happened while the claims-made policy was active. Without this, the
,organization faces a significant ‘nose’ gap when switching to an occurrence-based model. A
common exam trap is confusing an umbrella policy, which provides excess limits, with tail
coverage, which provides extended time for reporting.
4. A physician wants to refer Medicare patients to an imaging center in which his wife holds a
20% ownership interest. Which law is most likely to be violated by this arrangement?
A. The Sherman Antitrust Act
B. The False Claims Act
C. The Anti-Kickback Statute
D. The Stark Law (Physician Self-Referral Law)
Correct Answer: D
Explanation: The Stark Law prohibits physicians from referring Medicare patients for
‘designated health services’ (like imaging) to entities with which the physician or an
immediate family member has a financial relationship, unless an exception applies. Unlike
the Anti-Kickback Statute, Stark Law is a strict liability statute, meaning intent does not
need to be proven to establish a violation. Many students confuse this with the Anti-
Kickback Statute, which covers a broader range of referrals but requires proof of
‘remuneration’ to induce business.
, 5. A hospital is conducting a Failure Mode and Effects Analysis (FMEA) on a new robotic
pharmacy dispensing system. What is the primary advantage of using FMEA over RCA in this
scenario?
A. FMEA identifies why an event occurred after the fact
B. FMEA is less time-consuming than a Root Cause Analysis
C. FMEA is a proactive tool used to prevent errors before they happen
D. FMEA focuses solely on human error and disciplinary action
Correct Answer: C
Explanation: FMEA is a prospective risk assessment tool used to identify potential failure
points in a process before a product or system is implemented. In contrast, RCA is reactive,
occurring after an adverse event has already taken place. The trap is thinking FMEA and
RCA are interchangeable; however, FMEA calculates a Risk Priority Number (RPN) to rank
risks by severity, occurrence, and detectability.
6. During a deposition, a risk manager is asked to produce a peer review report concerning a
specific physician’s performance. Why would the risk manager typically object to this
request?
A. State statutes usually provide privilege and confidentiality for peer review activities
B. The report is considered attorney-client work product
C. The report is protected under HIPAA’s Privacy Rule
D. The physician has not yet been served with a formal complaint
