Question

Which of the following statements about provider cost structure and financial risk is false

a. A provider that is predominately capitated can reduce risk by increasing the proportion of fixed costs.
b. A provider’s cost structure has no impact on reimbursement risk.
c. A provider that is predominately fee-for-service can reduce risk by increasing the proportion of variable costs.
d. The risk under capitation can be reduced by increasing the number of capitated members (covered lives).
e. The risk under capitation can be reduced by increasing provider actuarial and costmeasurement expertise.

Answer 1

Answer to this Question is B): A provider’s cost structure has no impact on reimbursement risk.

(Its a false statement about cost structure and financial risk)

Explanation:

All of the given statements about cost structure and financial risk are true except the statement B. Provider can capitulate and reduce the expected risk by increasing the proportion of the fixed cost. Moreover, it can also reduce risk totally free of cost with the help of increasing the variable cost. The risk under capitation can be also reduced by increasing the number of capitulated members. Furthermore, the risk can also be reduced by increasing provider actuarial and cost measurement expertise. The only thing which is false here is that the provider's cost structure has no impact on the reimbursement risk at all in any way, that's why it should be the chosen answer.