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Question ID 17172

The Balanced Budget Act (BBA) of 1997 created the Medicare+Choice plan. One provision
of the BBA under Medicare+Choice is that the BBA

Option A

Requires health plans to qualify as either a competitive medical plan (CMP) or a federally qualified HMO in order to participate in the Medicare program

Option B

 Eliminates funding for demonstration projects such as the Medicare Enrollment Demonstration Project

Option C

Narrows the geographic variations in payments to Medicare health plans by lowering the growth rate of payments in high-payment counties and raising the rates in low-payment counties

Option D

 Increases Graduate Medical Education (GME) payments to hospitals for the training and cost of educating and training residents

Correct Answer C
Explanation


Question ID 17173

The Tidewater Life and Health Insurance Company is owned by its policy owners, who are
entitled to certain rights as owners of the company, and it issues both participating and
nonparticipating insurance policies. Tidewater is considering converting to the type of
company that is owned by individuals who purchase shares of the company's stock.
Tidewater is incorporated under the laws of Illinois, but it conducts business in the
Canadian provinces of Ontario and Manitoba.
Tidewater established the Diversified Corporation, which then acquired various subsidiary
firms that produce unrelated products and services. Tidewater remains an independent
corporation and continues to own Diversified and the subsidiaries. In order to create and
maintain a common vision and goals among the subsidiaries, the management of
Diversified makes decisions about strategic planning and budgeting for each of the
businesses.
In order to become the type of company that is owned by people who purchase shares of
the company's stock, Tidewater must undergo a process known as

Option A

 management buy-out

Option B

piercing the corporate veil

Option C

demutualization

Option D

mutualization

Correct Answer C
Explanation

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