GBA 1 - Study Guide Exam 2026
Questions and Answers
What was the purpose of the Health Maintenance Organization Act of 1973? -
Correct answer-The health maintenance organization action of 1973 provided
federal initiatives - consisted of federal grants and loans to organizations wishing
to investigate the feasibility of "federally qualified HMO"
How did the passage of the Health Maintenance Organization Act of 1973 affect
the growth of HMOs? - Correct answer-The government began to withdraw its
funding during the Reagan administration. Smaller plans did not survive.
Briefly explain why the preferred provider organization (PPO) concept was
developed? - Correct answer-PPO was sponsored by national insurance companies,
third party administrators, BCBS plans, and hotel organizations. PPO gained quick
popularity with employers that wanted cost savings but were unwilling to reduce
provider choice as much that required HMOs
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, Why didnt many employers realize long-term costs savings with PPO? - Correct
answer-Because they were primarily discounted fee-for-service arrangements with
little focus on utilization control.
What steps did PPO companies take to correct this problem? - Correct answer-
Increase the monitoring of utilization, implementing quality control and surveying
member satisfaction.
What do opponents of the PPO approach argue is the reason they are more
expensive than HMOs? - Correct answer-They argue that PPOs are weak form of
managed care with rich benefits, making them more expensive than HMOs.
Is there a universally accepted and used definition of managed care? - Correct
answer-There is no specific and uniformly accepted definition of the term
"managed care"
What is the definition of managed care provided in the text to include the broad
range of managed indemnity plans, HMOs, PPOs, and PO plans? - Correct answer-
Managed care includes those programs intended to influence and direct the
delivery of health care through: 1) plan design failure 2) Restricted access to a
specified group of preselected providers 3) Utilization management programs
Define the concept of steerage - Correct answer-Is the managed care company's
way of directing members to in-network providers. Commonly accomplished
©COPYRIGHT 2025, ALL RIGHTS RESERVE 2
Questions and Answers
What was the purpose of the Health Maintenance Organization Act of 1973? -
Correct answer-The health maintenance organization action of 1973 provided
federal initiatives - consisted of federal grants and loans to organizations wishing
to investigate the feasibility of "federally qualified HMO"
How did the passage of the Health Maintenance Organization Act of 1973 affect
the growth of HMOs? - Correct answer-The government began to withdraw its
funding during the Reagan administration. Smaller plans did not survive.
Briefly explain why the preferred provider organization (PPO) concept was
developed? - Correct answer-PPO was sponsored by national insurance companies,
third party administrators, BCBS plans, and hotel organizations. PPO gained quick
popularity with employers that wanted cost savings but were unwilling to reduce
provider choice as much that required HMOs
©COPYRIGHT 2025, ALL RIGHTS RESERVE 1
, Why didnt many employers realize long-term costs savings with PPO? - Correct
answer-Because they were primarily discounted fee-for-service arrangements with
little focus on utilization control.
What steps did PPO companies take to correct this problem? - Correct answer-
Increase the monitoring of utilization, implementing quality control and surveying
member satisfaction.
What do opponents of the PPO approach argue is the reason they are more
expensive than HMOs? - Correct answer-They argue that PPOs are weak form of
managed care with rich benefits, making them more expensive than HMOs.
Is there a universally accepted and used definition of managed care? - Correct
answer-There is no specific and uniformly accepted definition of the term
"managed care"
What is the definition of managed care provided in the text to include the broad
range of managed indemnity plans, HMOs, PPOs, and PO plans? - Correct answer-
Managed care includes those programs intended to influence and direct the
delivery of health care through: 1) plan design failure 2) Restricted access to a
specified group of preselected providers 3) Utilization management programs
Define the concept of steerage - Correct answer-Is the managed care company's
way of directing members to in-network providers. Commonly accomplished
©COPYRIGHT 2025, ALL RIGHTS RESERVE 2
