MHA 706 MIDTERM LORD 104 QUESTIONS AND ANSWERS
2026/2027. HEALTHCARE MANAGEMENT FUNDAMENTALS
VERIFIED QUESTIONS & ACCURATE ANSWERS || GRADED
A+
104 QUESTIONS AND ANSWERS
Proprietorships & Partnerships: Pros & Cons - CORRECT ANSWER - Pros:
Ease of Information, Subject to a few regulations, no corporation income taxes.
Cons: Limited life, difficult to transfer, unlimited life, difficult to raise capital.
Corporations: Pros & Cons - CORRECT ANSWER - Pros: Unlimited life,
easy transfer of ownership, limited liability, ease of raising capital.
Cons: Cost of formation and reporting, double or triple taxes must be paid.
Non-profit Organization - CORRECT ANSWER - Exempt from taxes. Goal is
to improve community.
For-profit Organizations - CORRECT ANSWER - (Investor Owned) Goal is
to maximize shareholder return. Owe taxes.
Agency Problem - CORRECT ANSWER - the possibility of conflict of
interest between the stockholders and management of a firm.
Example: Hire someone to carry out a job function, but they go out of their
interests instead of best interests of company/organization.
,Third-party payor system in the US (i.e. private vs public) - CORRECT
ANSWER - Private: Blue Cross Blue Shield, Commercial Insurers, Self-Insurers.
(AETNA)
Public: Medicare and Medicaid-both offer services to different levels. "Safety net"
Lowest reimbursement rates.
Reimbursement methods (fee-for-service vs. capitation) - CORRECT
ANSWER - Fee for Service: payment is tied to amount of services provided.
(Decades ago) *Dental industry*
Capitation: payment is tied to the size of the covered population (number of
enrollees) Payment is based on per # per month. *Decreasing utilization*
Population is healthier.
Medicare reimbursement for different types of providers - CORRECT
ANSWER - Medicare parts A, B & C.
Medicare Part A (aka Hospital Insurance or HI) - CORRECT ANSWER -
Provides hospital insurance automatically at age 65 (if FICA qualified) at no fee
but may have deductible & co-pay.
Medicare Part B - CORRECT ANSWER - The part of the Medicare program
that pays for physician services, outpatient hospital services, durable medical
equipment, and other services and supplies.
, Medicare Part C (Medicare Advantage) - CORRECT ANSWER - •Replaces
and covers expenses found in Part A and B
•Medicare private fee-for-service plans (PFFS)
•Medicare managed care plans (HMOs and PPOs)
•Medicare specialty plans
Medicare—Part D Prescription Drug Coverage - CORRECT ANSWER - a
United States federal-government program to subsidize the costs of prescription
drugs and prescription drug insurance premiums for Medicare beneficiaries.
Impact of the Affordable Care Act (what the bill changed about the healthcare
environment) - CORRECT ANSWER - Created new standards, individual
mandates, exchanges, and Medicaid expansion.
Focused on quality through clinical compensation, bundled payment, value-based
purchasing.
Regulations and standards of financial accounting (e.g. SEC, GAAP, FASB) -
CORRECT ANSWER - -Securities and Exchange Commission (SEC): has the
legal authority to regulate the form and content of financial statements.
-Financial Accounting Standards Board (FASB)
-Generally Accepted Accounting Principles (GAAP): the conventions that have
evolved from the pronouncements and rulings of the implementing organizations
constitute a set of guidelines for the preparation of financial accounting statements.
-ONLY applies only to financial accounting statements. Does NOT remain
STATIC.
2026/2027. HEALTHCARE MANAGEMENT FUNDAMENTALS
VERIFIED QUESTIONS & ACCURATE ANSWERS || GRADED
A+
104 QUESTIONS AND ANSWERS
Proprietorships & Partnerships: Pros & Cons - CORRECT ANSWER - Pros:
Ease of Information, Subject to a few regulations, no corporation income taxes.
Cons: Limited life, difficult to transfer, unlimited life, difficult to raise capital.
Corporations: Pros & Cons - CORRECT ANSWER - Pros: Unlimited life,
easy transfer of ownership, limited liability, ease of raising capital.
Cons: Cost of formation and reporting, double or triple taxes must be paid.
Non-profit Organization - CORRECT ANSWER - Exempt from taxes. Goal is
to improve community.
For-profit Organizations - CORRECT ANSWER - (Investor Owned) Goal is
to maximize shareholder return. Owe taxes.
Agency Problem - CORRECT ANSWER - the possibility of conflict of
interest between the stockholders and management of a firm.
Example: Hire someone to carry out a job function, but they go out of their
interests instead of best interests of company/organization.
,Third-party payor system in the US (i.e. private vs public) - CORRECT
ANSWER - Private: Blue Cross Blue Shield, Commercial Insurers, Self-Insurers.
(AETNA)
Public: Medicare and Medicaid-both offer services to different levels. "Safety net"
Lowest reimbursement rates.
Reimbursement methods (fee-for-service vs. capitation) - CORRECT
ANSWER - Fee for Service: payment is tied to amount of services provided.
(Decades ago) *Dental industry*
Capitation: payment is tied to the size of the covered population (number of
enrollees) Payment is based on per # per month. *Decreasing utilization*
Population is healthier.
Medicare reimbursement for different types of providers - CORRECT
ANSWER - Medicare parts A, B & C.
Medicare Part A (aka Hospital Insurance or HI) - CORRECT ANSWER -
Provides hospital insurance automatically at age 65 (if FICA qualified) at no fee
but may have deductible & co-pay.
Medicare Part B - CORRECT ANSWER - The part of the Medicare program
that pays for physician services, outpatient hospital services, durable medical
equipment, and other services and supplies.
, Medicare Part C (Medicare Advantage) - CORRECT ANSWER - •Replaces
and covers expenses found in Part A and B
•Medicare private fee-for-service plans (PFFS)
•Medicare managed care plans (HMOs and PPOs)
•Medicare specialty plans
Medicare—Part D Prescription Drug Coverage - CORRECT ANSWER - a
United States federal-government program to subsidize the costs of prescription
drugs and prescription drug insurance premiums for Medicare beneficiaries.
Impact of the Affordable Care Act (what the bill changed about the healthcare
environment) - CORRECT ANSWER - Created new standards, individual
mandates, exchanges, and Medicaid expansion.
Focused on quality through clinical compensation, bundled payment, value-based
purchasing.
Regulations and standards of financial accounting (e.g. SEC, GAAP, FASB) -
CORRECT ANSWER - -Securities and Exchange Commission (SEC): has the
legal authority to regulate the form and content of financial statements.
-Financial Accounting Standards Board (FASB)
-Generally Accepted Accounting Principles (GAAP): the conventions that have
evolved from the pronouncements and rulings of the implementing organizations
constitute a set of guidelines for the preparation of financial accounting statements.
-ONLY applies only to financial accounting statements. Does NOT remain
STATIC.
