100+ Free FAHM Practice Questions

Pass your AHIP Fellow, Academy for Healthcare Management (FAHM) exam on the first try — instant access, no signup required.

✓ No registration✓ No credit card✓ No hidden fees✓ Start practicing immediately

Not published Pass Rate

100+ Questions

100% Free

1 / 100

Question 1

Score: 0/0

A health plan's appeals and grievances function differs because:

Both are the same process

Grievances always go to the state insurance commissioner

Appeals are filed by providers only; grievances are filed by members only

Appeals contest an adverse benefit determination; grievances concern dissatisfaction not involving an adverse determination

to track

Same family resources

Explore More AHIP Health Insurance Designations

Continue into nearby exams from the same family. Each card keeps practice questions, study guides, flashcards, videos, and articles in one place.

2026 Statistics

Key Facts: FAHM Exam

Courses Required After PAHM

AHIP FAHM designation page

$220-$280

Cost Per Course

AHIP course catalog 2026

70%

Typical Passing Score Per Course

AHIP course exam policy

2 hours

Proctored Exam Time Per Course

AHIP course exam policy

85%

MLR Floor for Large Group and Medicaid MCOs

ACA and CMS 2016 Medicaid managed care rule

$2,000

Part D OOP Cap (IRA, 2025+)

Inflation Reduction Act 2022

FAHM is AHIP's advanced post-PAHM designation. Each of the four required courses (AHM510, AHM520, AHM530, AHM540) ends with a proctored online exam, typically 2 hours and 70% to pass. Each course costs $220 for AHIP members or $280 for non-members; total program cost is roughly $880-$1,120. Most candidates complete the program in 9-18 months. The 2026 syllabus reflects the IRA Part D redesign with the $2,000 out-of-pocket cap, the CMS-HCC v28 risk model phase-in, the No Surprises Act, MHPAEA NQTL comparative analysis, and the CY2025 MA and Part D Final Rule on broker compensation and in-home risk assessments.

Sample FAHM Practice Questions

Try these sample questions to test your FAHM exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1What is the primary purpose of a Medical Loss Ratio (MLR) requirement under the Affordable Care Act?

A.Cap the share of premium dollars an insurer can spend on administration and profit

B.Mandate a minimum premium amount per enrollee

C.Require insurers to pay providers fee-for-service

D.Set a floor on agent commission percentages

Explanation: The ACA MLR rule requires insurers to spend at least 80% (individual/small group) or 85% (large group) of premium revenue on claims and quality improvement. Insurers that fall below the threshold owe rebates to enrollees. The MLR effectively caps the share of premium spent on administration, marketing, and profit.

2Under ACA MLR rules, what minimum MLR must individual and small-group health plans achieve before owing rebates?

A.80%

B.75%

C.85%

D.90%

Explanation: Individual and small-group insurers must achieve at least an 80% MLR; large-group insurers must achieve 85%. Insurers below the threshold pay rebates to enrollees by September 30 of the following year, calculated on a three-year rolling average.

3Which expense category is generally INCLUDED in the numerator of the ACA MLR calculation?

A.Quality improvement activities (QIA)

B.Broker and agent commissions

C.Federal income taxes

D.Premium taxes

Explanation: Quality improvement activities are added to incurred claims in the MLR numerator because they are considered to benefit enrollees. Broker commissions, federal income tax, and premium taxes are excluded from premium in the denominator but are not counted as claims in the numerator.

4An actuary estimates Incurred But Not Reported (IBNR) reserves for a health plan. Which method projects ultimate claims by applying historical development factors to paid claims by service month?

A.Chain ladder (loss development) method

B.Bornhuetter-Ferguson method

C.Expected loss ratio method

D.Frequency-severity method

Explanation: The chain ladder method uses historical age-to-age development factors applied to cumulative paid claims by service month to project ultimate claims; IBNR equals projected ultimate minus paid. Bornhuetter-Ferguson blends a chain ladder estimate with an a priori expected loss estimate, which is useful in immature months.

5Why is the Bornhuetter-Ferguson method often preferred over the pure chain ladder method for the most recent two or three months of incurred claims?

A.Recent months have little paid data so development factors are highly leveraged and unstable

B.Bornhuetter-Ferguson does not require any historical data

C.Chain ladder cannot be used for medical claims

D.Bornhuetter-Ferguson always produces lower reserves

Explanation: For the most recent service months, very little paid data exists, so chain ladder development factors are extremely large and small fluctuations in paid claims produce large swings in projected ultimate. Bornhuetter-Ferguson stabilizes the estimate by anchoring to an a priori expected loss amount.

6A health plan's premium development includes a trend component. Medical trend captures which of the following?

A.The combined effect of unit cost inflation and utilization change between experience and projection periods

B.Only the change in administrative costs

C.The plan's expected investment yield

D.The taxes and fees included in premium

Explanation: Medical trend is the projected percentage change in claims cost from the experience period to the rating period, driven by unit cost inflation, mix of services, utilization change, leveraging of fixed copays, and new technology. It is one of the most material assumptions in premium development.

7Which NAIC framework requires US health insurers to maintain capital based on a formula reflecting underwriting, credit, market, and operational risk?

A.Risk-Based Capital (RBC)

B.Generally Accepted Accounting Principles (GAAP)

C.Solvency II

D.Statement of Statutory Accounting Principles 86

Explanation: The NAIC Risk-Based Capital formula calculates a minimum capital requirement reflecting asset, underwriting, credit, and operational risk. Regulators take action when the RBC ratio falls below certain thresholds (Company Action, Regulatory Action, Authorized Control, Mandatory Control).

8At what NAIC Risk-Based Capital level does the regulator place the insurer under mandatory regulatory control?

A.Below 70% of Authorized Control Level (Mandatory Control Level)

B.Below 200% of ACL (Company Action Level)

C.Below 150% of ACL (Regulatory Action Level)

D.Below 100% of ACL (Authorized Control Level)

Explanation: When Total Adjusted Capital falls below 70% of the Authorized Control Level (the Mandatory Control Level), the commissioner is required to place the insurer under regulatory control. The 200%, 150%, and 100% thresholds trigger progressively stronger interventions short of receivership.

9A provider is paid a fixed per-member per-month (PMPM) amount regardless of services delivered. This payment method is called:

A.Capitation

B.Fee-for-service

C.Diagnosis-related group payment

D.Per diem

Explanation: Capitation pays providers a fixed PMPM amount to deliver a defined set of services to assigned members, transferring utilization risk to the provider. Fee-for-service pays per service, DRGs bundle inpatient stays, and per diem pays per day of inpatient care.

10A primary care capitation arrangement uses a 20% withhold. What does the withhold mechanism do?

A.Retains 20% of each capitation payment to be paid back if utilization, quality, or budget targets are met

B.Reduces the PMPM by 20% permanently

C.Caps the provider's annual revenue at 20% of premium

D.Pays 20% more to specialists than to PCPs

Explanation: A withhold reserves a portion of capitation payments (commonly 10-20%) that the plan distributes back to providers at year-end based on meeting cost, utilization, and quality benchmarks. It creates shared accountability without converting the entire contract to risk.

About the FAHM Exam

The FAHM (Fellow, Academy for Healthcare Management) is the advanced AHIP designation taken after the PAHM. It is awarded after completing four additional self-paced courses with proctored exams: AHM510 Governance, Legal, Medicare & Medicaid; AHM520 Health Plan Finance and Risk Management; AHM530 Network Management; and AHM540 Medical Management. FAHM tests deeper insight into healthcare delivery systems, managed care financial operations, network strategy, regulation, and care management.

Questions

50 scored questions

Time Limit

2 hours per course exam (online proctored)

Passing Score

70% per course

Exam Fee

$220-$280 per course x 4 courses (AHIP (America's Health Insurance Plans))

FAHM Exam Content Outline

25%

Health Plan Finance (AHM520)

Premium development, medical trend, IBNR reserves (chain ladder, Bornhuetter-Ferguson), MLR 80/85%, RBC ratios, underwriting cycle, ASO and self-funding, stop-loss, level-funded plans, and PBM spread pricing

20%

Network Management (AHM530)

Narrow and tiered networks, network adequacy, COE, IDS/PHO structures, provider contracting (capitation, withholds, DRGs, percentage-of-charges, reference-based pricing), credentialing, and delegation oversight

25%

Governance & Regulation (AHM510)

Medicare Advantage bid process and benchmarks, Star Ratings and QBP, Part D bid and IRA $2,000 OOP cap, SNPs, Medicaid waivers (1115, 1915(b)/(c)), Stark Law, AKS, False Claims Act, HIPAA, MHPAEA, No Surprises Act, and EMTALA

20%

Medical Management (AHM540)

Utilization management, concurrent review, population health, SDOH, predictive modeling, formulary design, HEDIS, CAHPS, NCQA accreditation, ROI evaluation, and quality improvement programs (CCIP/QIP)

10%

Strategic Plan Operations & Compliance

SWOT analysis, Porter's Five Forces, Balanced Scorecard, operating budget, ERM, OIG 7 compliance program elements, SIU, RADV, CERT/PERM, EQRO, and ACA risk-adjustment / 3 Rs

How to Pass the FAHM Exam

What You Need to Know

Passing score: 70% per course
Exam length: 50 questions
Time limit: 2 hours per course exam (online proctored)
Exam fee: $220-$280 per course x 4 courses

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

FAHM Study Tips from Top Performers

1Drill MLR math: ACA requires 80% for individual/small group and 85% for large group and Medicaid MCO contracts

2Memorize the OIG 7 compliance program elements and the Stark vs Anti-Kickback distinction (strict liability vs intent)

3Understand the Medicare Advantage flow: bid vs benchmark, rebate percentage by Star Rating, and CMS-HCC v28 phase-in

4Practice IBNR reasoning: chain ladder versus Bornhuetter-Ferguson and why BF is preferred for the most recent service months

5Know the IRA Part D redesign: $2,000 OOP cap starting 2025 and the resulting plan and manufacturer liability shifts

Frequently Asked Questions

What is the AHIP FAHM designation?

The Fellow, Academy for Healthcare Management (FAHM) is AHIP's advanced credential in managed care administration. It builds on the PAHM (AHM250) and is earned by completing four additional self-paced courses with proctored exams: AHM510, AHM520, AHM530, and AHM540. FAHM signals deeper expertise in health plan finance, networks, regulation, and medical management.

How much does FAHM cost in 2026?

Each FAHM course costs approximately $220 for AHIP members or $280 for non-members. Because the FAHM requires four courses on top of the PAHM, total course fees run about $880-$1,120 for members and non-members respectively. Confirm the current fees on the AHIP InsuranceEducation portal before enrolling, since AHIP adjusts pricing periodically.

What is the format of each FAHM course exam?

Each FAHM course ends with an online proctored exam. The exam is typically 2 hours, contains multiple choice, true/false, and fill-in-the-blank questions, and requires roughly 70% to pass. The exam is administered through AHIP's online platform with a remote proctor monitoring the session.

Do I need to pass the PAHM before pursuing FAHM?

AHIP positions the PAHM (AHM250 Healthcare Management: An Introduction) as the foundation before pursuing the FAHM. While not always a strict bar to enrollment in higher courses, candidates are strongly encouraged to earn PAHM first because FAHM courses assume the introductory content. Verify current eligibility on the AHIP designation page.

How long does it take to earn the FAHM?

Most candidates complete FAHM in 9-18 months. AHIP courses are self-paced with a 90-180 day completion window per course; the four-course program plus exam preparation typically takes 200-400 study hours total. Working professionals often complete one course per quarter while continuing full-time work.

What topics are tested on FAHM?

FAHM covers health plan finance and risk management (AHM520), network management (AHM530), governance and legal including Medicare and Medicaid (AHM510), and medical management (AHM540). Expect questions on MLR, IBNR reserves, RBC, MA bid process and Star Ratings, ACA marketplace, Stark/AKS/FCA, narrow networks, capitation contracting, utilization management, and population health ROI.

Is the FAHM exam open book?

AHIP course exams are proctored online and generally do not permit open reference materials during the exam session. Candidates may study the AHIP course textbooks and quizzes ahead of the exam window, but the proctored final must be taken independently within the time limit. Confirm the latest exam rules in your AHIP course portal before testing.