Updated 2026
DRGsM-MAnswerMDiagnostic-RelatedMGroups:MpaymentMrateMbasedMonMspecificMdiagnoses
ProspectiveMPaymentMSystemM-MAnswerMUsedMbyMMedicare-
participatingMhospitals:MpretreatmentMdiagnosisMbillingsMbasedMonMDRGs;MrateMdecidedMa
headMofMtimeMbetweenMinsuranceMcompaniesMandMhospitals
ExclusiveMProviderM-
MAnswerMUsedMbyMHMO's:MinsuranceMcoverageMforMcontractedMprovidersMorMinstitution
s
HMOsM-
MAnswerMHealthMmaintenanceMorganizations:McomprehensiveMhealthcareMtoMpeopleMwho
MpayMaMfeeMforMaMfixedMperiodMofMtime
CapitationM-
MAnswerMFixedMrateMpaidMtoMproviderMperMmemberMperMmonthMforMhealthcareMservic
es;MsetMfeeMpaidMbyMinsuranceMcompanyMperMmonthMforMallMtheMpatientMneeds
PPOsM-
MAnswerMPreferredMproviderMorganizations:MspecialMreducedMrateMforMservicesMwhenMcu
stomersMuseMcertainMprovidersMapprovedMbyMtheMinsuranceMcompany;MusuallyMfee-for-
service
IPAsM-
MAnswerMIndividualMproviderMarrangements:MprovideMcareMinMtheirMofficesMforMprepaid
Mplans;McoalitionMofMphysiciansMwhoMserveMHMOMpatientsMandMthird-partyMpatients
FulltimeMFTEMHoursM-MAnswerM2080MhoursM(1.0M@M40MhoursMperMweek)
CapitalMExpensesM-MAnswerMLong-
termMequipmentMorMphysicalMpurchases:MusuallyMoverM$500-
$1000MthatMwillMlastMyearsMandMdepreciateMoverMtimeMandMbeMusedMmultipleMtimes
,Zero-BasedMBudgetM-
MAnswerMWithMeachMnewMbudgetM(i.e.MfiscalMyear),MitMisMdeterminedMwhichMprograms
/areasMgetMmoney;MnoMhistoricalMcontextMisMused;MmayMrankMpackagesMandMthenMonl
yMfundMtop-rankedMones;McanMbeMtime-consumingMwayMtoMcreateMaMbudget
VarianceMCalculationM&MRemindersM-
MAnswerMVarianceM$M/BudgetedM$MXM100M=M%Mdifference;McontractMstaffMonMseparat
eMlineMofMbudget;MmanyMstaffMsickMcostsMmoreMthanMaMfewMstaffMonMLOA
CostMofMNursingMServicesMCalculationM-
MAnswerMNurseMTimeMXM(Avg.MRNMHourlyMRateM+MBenefitsM+MIndirects)M=MTotalMNur
singMCostMperMDRG
GeneralMNurseMStaffingMCalculationM-
MAnswerM#MofMRNsMneededMXMdaysMopenM/M#MdaysMworkedMperMRN
FTEMDefinitionM&MCalculationM-MAnswerMFull-timeMequivalentM=Mfull-
timeMemployeeMpaidMforM1Myear
FTEM=M(HoursMperMshiftMXM#MofMdaysMworked)M/M40Mhours
FixedMCostsM-
MAnswerMStayMtheMsameMnoMmatterMtheMcensus:MmanagerMsalaries,MkeepingMphonesM
on,Mrent,Metc.
VariableMCostsM-MAnswerMChangeMwithMcensusMandMhowMmuchMstaffingMisMused
NetMRevenueMCalculationM-MAnswerMGrossMRevenueM-
MDeductionsMfromMRevenueM(DRGsMandMtheMContractualMallowancesMpaidMbyMinsurance
Mcompanies)
UAPM-MAnswerMUnlicensedMassistiveMpersonnelM(CNA's)
ADCM-MAnswerMAverageMdailyMcensusM(patientsMinMaMbedMatMmidnight)
, TotalMPatientMDaysMCalculationM-MAnswerMADCMXMDaysMopenMperMyearM(forMSCHM-
MADCMXM365)
NurseMHoursMPerMPatientMDayM(HPPD)MCalculationM-
MAnswerMTotalMDirectMCareMHoursM/MTotalMPatientMDaysM=M#MofMRNMhoursMneeded
MtoMprovideMcareMforMaMpt.MforM24Mhours.M
ForMexampleM-
MforM12MhourMstaffMandM12MworkersMeachMshiftMyouMmultiplyM12MstaffMXM2MshiftsM
=M24MstaffMXM12MhoursMeachM=M288MdividedMbyMmidnightMcensusMofM31M=MNHPPD
VBPM-MAnswerMValue-
basedMpurchasing:MhowMCMSMdeterminesMhowMmuchMtoMreimburseMaMhospitalMforMcar
eM(benchmarkedMstandardsMandMhowMtheyMareMmeetingMit);MqualityMofMcareM&Mfollow
ingMbestMpracticeM&MpatientMexperience
PerMDiemMRateM-
MAnswerMNegotiatedMpayMforMservicesMbyMinsuranceMcompaniesMregardlessMofMwhatMse
rvicesMwereMactuallyMcompleted;MperMdayMadmitted
UOSM-
MAnswerMUnitMofMservice:MpatientMdaysMforMinpatientMnursingMbutMcouldMbeMvisitsMor
M#MofMproceduresMorMwhateverMthatMhealthcareMorganizationMcounts
RVUM-
MAnswerMRelativeMvalueMunit:MwhatMancillaryMservicesMmightMuseMtoMaddMupMtheirMU
OS;M#MofMhi-flowsMhookedMupMorMventsMstartedMforMRT.,MforMexample
ALOSMCalculationM-
MAnswerMAverageMlengthMofMstayM=M#MofMpt.MdaysM/M#MofMdischargesM(inMsameMti
meMperiod)
CPUOSM-MAnswerMCostMperMunitMofMserviceM=MsalariesM/MUOS
ProductivityM-MAnswerM#MofMstaffMhoursMorM$'sM/M#MofMUOSM
RNMhoursM/MpatientsMinMbedsM@MmidnightM(HOC)