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# A government agency that reimburses its clients for bills

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Manager
Joined: 05 Apr 2007
Posts: 235
A government agency that reimburses its clients for bills [#permalink]

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10 Jul 2009, 04:34
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A government agency that reimburses its clients for bills they have paid for medical care has had this year’s budget cut. To save money without cutting reimbursements or otherwise harming clients financially, it plans to delay reimbursements to clients for forty days, thereby earning \$180 million per year in interest on the reimbursement money.

Which of the following, if true, is the best criticism of the agency’s plan?
(A) Hospitals and physicians typically hold patients responsible for the ultimate payment of their bills.
(B) The agency cannot save money by cutting staff because it is already understaffed.
(C) Some clients borrow money to pay their medical bills; they will pay forty extra days of interest on these loans.
(D) Some clients pay their medical bills immediately, but they often take more than forty days to file with the agency for reimbursement.
(E) The agency’s budget was cut by more than \$180 million last year.

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Director
Joined: 05 Jun 2009
Posts: 687
WE 1: 7years (Financial Services - Consultant, BA)

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10 Jul 2009, 05:04
IMO C
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Manager
Joined: 05 Apr 2007
Posts: 235

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10 Jul 2009, 05:43
sudeep wrote:
IMO C

any reasons???
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Director
Joined: 01 Apr 2008
Posts: 831
Name: Ronak Amin
Schools: IIM Lucknow (IPMX) - Class of 2014

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10 Jul 2009, 06:08
"or otherwise harming clients financially" is the catch.

C will harm clients financially, because they will have to pay interest.

trainspotting wrote:
A government agency that reimburses its clients for bills they have paid for medical care has had this year’s budget cut. To save money without cutting reimbursements or otherwise harming clients financially, it plans to delay reimbursements to clients for forty days, thereby earning \$180 million per year in interest on the reimbursement money.

Which of the following, if true, is the best criticism of the agency’s plan?
(A) Hospitals and physicians typically hold patients responsible for the ultimate payment of their bills.
(B) The agency cannot save money by cutting staff because it is already understaffed.
(C) Some clients borrow money to pay their medical bills; they will pay forty extra days of interest on these loans.
(D) Some clients pay their medical bills immediately, but they often take more than forty days to file with the agency for reimbursement.
(E) The agency’s budget was cut by more than \$180 million last year.
Manager
Joined: 01 May 2009
Posts: 93

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10 Jul 2009, 07:20
trainspotting wrote:
A government agency that reimburses its clients for bills they have paid for medical care has had this year’s budget cut. To save money without cutting reimbursements or otherwise harming clients financially, it plans to delay reimbursements to clients for forty days, thereby earning \$180 million per year in interest on the reimbursement money.

Which of the following, if true, is the best criticism of the agency’s plan?
(A) Hospitals and physicians typically hold patients responsible for the ultimate payment of their bills. - this is neurtal to the argument.
(B) The agency cannot save money by cutting staff because it is already understaffed. - out of scope, no where there is a mention about staff cut.
(C) Some clients borrow money to pay their medical bills; they will pay forty extra days of interest on these loans. - this weakens the argument cause this would hurt the clients financially, which the company is trying to avoid by using the new plan.
(D) Some clients pay their medical bills immediately, but they often take more than forty days to file with the agency for reimbursement. - if clients take 40 days to file they will apply for reimbursement after 40 days but but again the delay by teh company to the client is 40 only.
(E) The agency’s budget was cut by more than \$180 million last year. - out of scope, we are talkig about current year, not last year.

is the OA C?
Senior Manager
Joined: 04 Jun 2008
Posts: 281

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10 Jul 2009, 08:14
Economist wrote:
"or otherwise harming clients financially" is the catch.

C will harm clients financially, because they will have to pay interest.

+1
Director
Joined: 01 Apr 2008
Posts: 831
Name: Ronak Amin
Schools: IIM Lucknow (IPMX) - Class of 2014

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10 Jul 2009, 08:34
Thanks
rashminet84 wrote:
Economist wrote:
"or otherwise harming clients financially" is the catch.

C will harm clients financially, because they will have to pay interest.

+1
Manager
Joined: 05 Apr 2007
Posts: 235

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10 Jul 2009, 08:38
Economist wrote:
Thanks
rashminet84 wrote:
Economist wrote:
"or otherwise harming clients financially" is the catch.

C will harm clients financially, because they will have to pay interest.

+1

OA IS C
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Manager
Joined: 27 Jun 2008
Posts: 141

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23 Jul 2009, 01:40
C it is.
Intern
Joined: 26 Jun 2009
Posts: 4

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23 Jul 2009, 01:51
yes, C for me as well

--== Message from GMAT Club Team ==--

This is not a quality discussion. It has been retired.

If you would like to discuss this question please re-post it in the respective forum. Thank you!

To review the GMAT Club's Forums Posting Guidelines, please follow these links: Quantitative | Verbal Please note - we may remove posts that do not follow our posting guidelines. Thank you.
Re: Reimbursements   [#permalink] 23 Jul 2009, 01:51
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# A government agency that reimburses its clients for bills

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