CPHRM CPHRM Enterprise Risk Management 1 — Questions and Answers
Question 1: Which framework is most commonly referenced in healthcare enterprise risk management (ERM) programs in the US?
- COSO ERM Framework (Correct answer)
- ISO 14001
- PMBOK Guide
- Six Sigma DMAIC
Correct answer: COSO ERM Framework
The COSO ERM Framework is the most widely adopted standard for enterprise risk management in US healthcare organizations.
Question 2: In ERM, what does the term 'risk appetite' refer to?
- The total cost of risk retained by an organization
- The amount of risk an organization is willing to accept in pursuit of its objectives (Correct answer)
- The frequency of risk assessments conducted annually
- The minimum threshold for reporting adverse events
Correct answer: The amount of risk an organization is willing to accept in pursuit of its objectives
Risk appetite is the amount and type of risk an organization is willing to accept while pursuing its strategic objectives.
Question 3: Which of the following best describes 'residual risk' in an ERM program?
- Risk identified but not yet assessed
- Risk that remains after controls and mitigation strategies are applied (Correct answer)
- Risk transferred entirely to a third party
- Risk that only affects clinical departments
Correct answer: Risk that remains after controls and mitigation strategies are applied
Residual risk is the level of risk remaining after an organization has implemented its risk response and control measures.
Question 4: A healthcare risk manager is creating a risk register. Which component is essential for each identified risk entry?
- Employee names associated with the risk
- Likelihood, impact, and assigned owner (Correct answer)
- Budget allocation per risk
- Historical claims data only
Correct answer: Likelihood, impact, and assigned owner
A risk register entry must include the likelihood of occurrence, potential impact, and an assigned owner responsible for managing that risk.
Question 5: Which ERM risk response strategy involves shifting the financial consequence of a risk to a third party?
- Risk avoidance
- Risk reduction
- Risk transfer (Correct answer)
- Risk acceptance
Correct answer: Risk transfer
Risk transfer shifts the financial burden of a risk to another party, most commonly through insurance or contractual agreements.
Question 6: In a healthcare ERM program, 'strategic risk' most likely includes which of the following?
- A nurse's failure to follow hand hygiene protocol
- A competitor opening a new facility in the service area (Correct answer)
- A slip-and-fall incident in the cafeteria
- A billing error on a single claim
Correct answer: A competitor opening a new facility in the service area
Strategic risk involves threats to an organization's ability to achieve its long-term goals, such as competitive market changes.
CPHRM CPHRM Enterprise Risk Management 1
Which framework is most commonly referenced in healthcare enterprise risk management (ERM) programs in the US?