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Which entity is responsible for federal oversight of Medicare Advantage and Part D plans?

Centers for Medicare & Medicaid Services (CMS)

Internal Revenue Service

Department of Defense

Office of Personnel Management

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2026 Statistics

Key Facts: PAHM Exam

100

Multiple-Choice Questions

AHIP AHM250 course exam

70%

Typical Passing Score

AHIP course exam policy

$220-$280

Course + Exam Fee (member vs non-member)

AHIP course catalog 2026

180 days

Course Completion Window

AHIP AHM250 enrollment terms

$2,000

Part D OOP Cap (IRA, 2025+)

Inflation Reduction Act 2022

80%/85%

ACA MLR Floors (individual or small / large group)

Affordable Care Act

PAHM is AHIP's entry-level Academy for Healthcare Management designation, earned by completing the AHM250 self-paced online course and passing the proctored final. The 2026 course/exam bundle costs about $220 for AHIP members or $280 for non-members. Students have up to 180 days to complete the course and typically need 70% to pass the final. The syllabus covers the evolution of US health care delivery, health plan types (HMO/PPO/POS/EPO/indemnity), consumer-directed plans, network management basics, claims and underwriting, government programs (Medicare, Medicaid, TRICARE, FEHB), the regulatory environment (ACA, ERISA, HIPAA, MHPAEA), and managed-care ethics.

Sample PAHM Practice Questions

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

1Which feature is most characteristic of a traditional Health Maintenance Organization (HMO)?

A.Members select a primary care physician (PCP) who coordinates referrals to specialists

B.Members are reimbursed on a pure fee-for-service basis with no network

C.Out-of-network services are always covered at the same cost as in-network

D.Members pay no premium because the federal government funds the plan

Explanation: An HMO requires members to choose a PCP who serves as a gatekeeper, coordinating care and authorizing referrals to in-network specialists. Out-of-network care is generally not covered except in emergencies.

2In a staff-model HMO, how are primary care physicians typically paid?

A.Salary as employees of the HMO

B.Per-member-per-month capitation paid to an independent group

C.Fee-for-service at billed charges

D.Bundled DRG payments for inpatient stays

Explanation: In a staff-model HMO, physicians are employed directly by the HMO and paid a salary. In contrast, group-model HMOs contract with a single multispecialty group, network-model HMOs contract with multiple groups, and IPA-model HMOs contract with independent physicians.

3Which HMO model contracts with multiple independent multispecialty groups to provide care?

A.Network model

B.Staff model

C.Group model

D.Indemnity model

Explanation: A network-model HMO contracts with two or more independent multispecialty groups. A staff model employs physicians directly, a group model contracts with one exclusive group, and indemnity is not an HMO model at all.

4An Independent Practice Association (IPA) HMO contracts with:

A.Independent physicians who practice in their own offices

B.A single multispecialty group practice exclusively

C.Physicians who are employees of the HMO

D.Only hospital-based physicians

Explanation: An IPA-model HMO contracts with an association of independent physicians who maintain their own private practices and typically see non-HMO patients as well. The IPA negotiates capitation or fee schedules with the HMO on behalf of its physicians.

5How does a Preferred Provider Organization (PPO) primarily differ from an HMO?

A.A PPO covers out-of-network care at reduced benefits and does not require a PCP referral

B.A PPO uses capitation, while an HMO uses fee-for-service

C.A PPO requires members to choose a PCP gatekeeper

D.A PPO is only available through Medicare Advantage

Explanation: PPO members can self-refer to specialists and use out-of-network providers at higher cost-sharing. HMOs typically use a closed network with a PCP gatekeeper. Capitation is more common in HMOs, and PPOs exist in commercial, MA, and other markets.

6Which plan type combines HMO-style in-network rules with PPO-style out-of-network coverage?

A.Point of Service (POS)

B.Exclusive Provider Organization (EPO)

C.High-Deductible Health Plan (HDHP)

D.Indemnity

Explanation: A POS plan typically requires the member to select a PCP and obtain referrals like an HMO for in-network care, but allows out-of-network access at higher cost-sharing like a PPO. It is essentially a hybrid product.

7An Exclusive Provider Organization (EPO) plan generally:

A.Pays for no out-of-network care except true emergencies

B.Requires PCP referrals for every specialist visit

C.Reimburses providers using DRGs

D.Covers only preventive services

Explanation: An EPO restricts coverage to its contracted network and pays nothing toward non-emergency out-of-network care. Unlike most HMOs, EPOs typically do not require a PCP referral to see in-network specialists.

8Which arrangement best describes an integrated delivery system (IDS)?

A.A network of provider organizations under common ownership or contract that offers a coordinated continuum of care

B.A standalone solo physician practice

C.A federally funded community health center

D.A pharmacy benefit manager

Explanation: An IDS links hospitals, physician groups, ambulatory facilities, and sometimes a health plan under common ownership or contract so that care across settings is coordinated. The structure is intended to align incentives and improve outcomes.

9A Physician-Hospital Organization (PHO) is best described as:

A.A joint venture between a hospital and its medical staff that contracts with payers

B.A federal agency that licenses hospitals

C.A state insurance regulator

D.A consumer-directed health account

Explanation: A PHO is a contracting entity formed by a hospital and members of its medical staff to negotiate jointly with managed care plans. It allows physicians and the hospital to present a unified network proposal.

10An Accountable Care Organization (ACO) is primarily designed to:

A.Make a group of providers jointly accountable for the cost and quality of care for a defined population

B.Replace state insurance departments

C.Operate exclusively as a Medicaid PBM

D.Take over claims adjudication from health plans

Explanation: An ACO is a group of doctors, hospitals, and other providers who voluntarily come together to give coordinated care to a defined patient population. They share in savings (or losses) tied to total cost of care and quality benchmarks, originally under the Medicare Shared Savings Program.

About the PAHM Exam

The PAHM (Professional, Academy for Healthcare Management) is AHIP's foundational health-plan operations credential. It is earned by completing the AHM250 Healthcare Management: An Introduction self-paced course and passing the proctored online final exam. PAHM covers the evolution of US health care delivery, health plan types (HMO/PPO/POS/EPO/indemnity), consumer-directed plans (HSA, HRA, FSA), provider networks, claims administration, underwriting and rating, government programs (Medicare, Medicaid, TRICARE, FEHB), the regulatory environment (ACA, ERISA, HIPAA, MHPAEA, 21st Century Cures), and the ethics of managed care. PAHM is also the prerequisite foundation for the advanced FAHM designation.

Questions

100 scored questions

Time Limit

2 hours (online proctored)

Passing Score

70%

Exam Fee

$220 (member) / $280 (non-member) (AHIP (America's Health Insurance Plans))

PAHM Exam Content Outline

20%

Health Plan Types & Evolution of Delivery

Pre-paid plans, ACOs, HMO models (staff, group, network, IPA), PPO, POS, EPO, managed indemnity, integrated delivery systems, and PHO/MSO structures

15%

Regulatory Environment

ACA essential health benefits and marketplace, ERISA preemption for self-funded plans, HIPAA privacy/security/portability, MHPAEA parity, NAIC model laws, McCarran-Ferguson, and 21st Century Cures Act interoperability

15%

Government Programs

Medicare Parts A (hospital), B (medical), C (Medicare Advantage), and D (Part D), dual-eligible SNPs, IRA $2,000 Part D OOP cap, Medicaid eligibility and waivers, CHIP, TRICARE, and FEHB

10%

Network Management Basics

Provider contracting, credentialing, network adequacy, PCP gatekeeping and referrals, capitation versus FFS, withholds, primary care versus specialist tiers

10%

Reimbursement & Claims Administration

Fee-for-service, capitation, DRGs (inpatient), APCs (outpatient), RBRVS, COB, claims adjudication, EOB, prompt-pay rules, and clean claim turnaround

10%

Underwriting & Rating

Community rating, modified community rating, experience rating, ACA 3:1 age rating band, guaranteed issue, risk pools, and the underwriting cycle

10%

Consumer-Directed Health Plans

HSA-qualified HDHP IRS deductible and OOP thresholds, HRA design (employer-funded), FSA use-it-or-lose-it, QSEHRA/ICHRA, and price-transparency tools

10%

Quality, Member Services, Pharmacy & Specialty Benefits

NCQA HEDIS, URAC, AAAHC, CMS Star Ratings, member rights, grievances and appeals, formulary tiers, mail-order pharmacy, specialty pharmacy, and dental/vision plan design (HMO vs PPO)

How to Pass the PAHM Exam

What You Need to Know

Passing score: 70%
Exam length: 100 questions
Time limit: 2 hours (online proctored)
Exam fee: $220 (member) / $280 (non-member)

Keys to Passing

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

PAHM Study Tips from Top Performers

1Memorize HMO model variants — staff, group, network, and IPA — and how each compensates physicians (salary vs capitation vs FFS)

2Lock down ACA basics: 10 essential health benefits, 3:1 age rating band, MLR (80% individual/small group, 85% large group), and metal tiers

3Know Medicare Parts A-D and how Medicare Advantage (Part C) bundles A, B, and usually D into a single private plan

4Distinguish ERISA self-funded plans (preempt state law) from fully insured plans (state-regulated) — a recurring PAHM exam theme

5Drill the difference between an HSA (employee-owned, HDHP-required, rolls over) and an FSA (employer-owned, use-it-or-lose-it)

Frequently Asked Questions

What is the AHIP PAHM designation?

The Professional, Academy for Healthcare Management (PAHM) is AHIP's foundational credential for people entering health plan operations. It is awarded after completing the self-paced AHM250 Healthcare Management: An Introduction course and passing the proctored online final exam. PAHM signals working knowledge of health plan types, government programs, networks, claims, regulation, and consumer-directed plans.

How much does PAHM cost in 2026?

The AHM250 course (which includes the PAHM exam) costs approximately $220 for AHIP members and $280 for non-members in 2026. The fee bundles the self-paced course materials and the proctored online final exam. Confirm current pricing on the AHIP InsuranceEducation portal before enrolling, since AHIP adjusts pricing periodically.

What is the format of the PAHM exam?

The PAHM final exam is delivered through AHIP's online platform with a remote proctor. It typically contains around 100 multiple-choice questions, with some true/false and fill-in-the-blank items, runs about 2 hours, and generally requires 70% to pass. Candidates have up to 180 days from enrollment to complete the course and sit the exam.

What topics are tested on PAHM?

PAHM covers the evolution of US health care delivery, the main health plan types (HMO models, PPO, POS, EPO, indemnity), consumer-directed plans (HSA, HRA, FSA), provider networks and contracting, claims administration, underwriting and rating, government programs (Medicare, Medicaid, TRICARE, FEHB), the regulatory environment (ACA, ERISA, HIPAA, MHPAEA, 21st Century Cures), and quality and member services.

Do I need prerequisites to take PAHM?

No. PAHM is an entry-level designation with no formal degree, license, or work experience requirement. Anyone interested in health insurance plan operations can enroll directly in the AHM250 course. PAHM is also the foundation for the more advanced FAHM designation, which adds the AHM510, AHM520, AHM530, and AHM540 courses.

How long does it take to earn the PAHM?

AHIP allows up to 180 days to complete AHM250 from the date of enrollment. Most candidates finish in 6 to 12 weeks, investing roughly 40 to 80 hours of study time. The course is self-paced and mobile-friendly, so working professionals often complete it alongside a full-time job.

Is PAHM a prerequisite for FAHM?

AHIP positions PAHM (AHM250) as the foundation course before pursuing the Fellow, Academy for Healthcare Management (FAHM). While not always a strict bar to enrolling in the higher AHM510-540 courses, FAHM coursework assumes the introductory content from AHM250, so most candidates complete PAHM first. Verify current eligibility on the AHIP designation page.