Health Finance ACTUAL EXAM
2026/2027 | 100 Verified Q&A | A+
Graded | Pass Guaranteed - A+ Graded
Domain 1: Healthcare Reimbursement & Payment Models (Questions 1–20)
Q1: A hospital admits a 72-year-old Medicare patient for hip replacement surgery. The patient has
Medicare Part A and Part B coverage. Which part covers the inpatient hospital stay?
A. Medicare Part A. [CORRECT]
B. Medicare Part B
C. Medicare Part C
D. Medicare Part D
Correct Answer: A
Rationale: Medicare Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and
some home health services. Part B covers outpatient services and physician fees.
Q2: A physician practice is considering joining an Accountable Care Organization (ACO). Under the
Medicare Shared Savings Program, what is the primary financial incentive?
A. Guaranteed bonus payments regardless of performance
B. Shared savings if the ACO meets quality benchmarks and reduces costs below a spending target.
[CORRECT]
C. Higher fee-for-service reimbursement rates
D. Exemption from all Medicare regulations
Correct Answer: B
Rationale: ACOs earn shared savings by delivering high-quality care at costs below Medicare's
established spending benchmark. Savings are shared between Medicare and the ACO based on quality
performance metrics.
Q3: A hospital is paid $28,000 for a cardiac bypass surgery under a bundled payment model. The
hospital's actual cost for the episode of care is $32,000. What is the financial outcome?
,A. The hospital receives additional payment to cover the $4,000 loss
B. The hospital absorbs the $4,000 loss. [CORRECT]
C. Medicare reimburses the actual cost of $32,000
D. The hospital can bill the patient for the difference
Correct Answer: B
Rationale: Bundled payment models transfer financial risk to the provider. The hospital receives the
fixed bundled amount regardless of actual costs, incentivizing efficiency and care coordination to
manage expenses within the payment.
Q4: A Medicaid patient is admitted to the hospital. The state Medicaid program pays 60% of the
allowable cost, and the federal government pays the remaining 40% through FMAP. If the allowable cost
is $10,000, what is the federal share?
A. $4,000. [CORRECT]
B. $6,000
C. $10,000
D. $2,500
Correct Answer: A
Rationale: The Federal Medical Assistance Percentage (FMAP) represents the federal government's
share of Medicaid costs. At 40% FMAP, the federal share of a $10,000 allowable cost is $4,000.
Q5: A health system is negotiating a capitation contract with a commercial payer for 10,000 covered
lives. The capitation rate is $450 per member per month (PMPM). What is the annual revenue from this
contract?
A. $45 million
B. $54 million. [CORRECT]
C. $60 million
D. $72 million
Correct Answer: B
Rationale: Annual revenue = 10,000 members × $450 PMPM × 12 months = $54,000,000. Capitation
provides predictable revenue but requires effective cost management to maintain profitability.
Q6: Under the Resource-Based Relative Value Scale (RBRVS), a physician procedure has 2.5 work RVUs,
1.8 practice expense RVUs, and 0.4 malpractice RVUs. The conversion factor is $36.00. What is the
Medicare payment?
, A. $133.20
B. $169.20. [CORRECT]
C. $198.00
D. $216.00
Correct Answer: B
Rationale: Total RVUs = 2.5 + 1.8 + 0.4 = 4.7. Medicare payment = 4.7 × $36.00 = $169.20. RBRVS
standardizes physician payment based on resource intensity rather than historical charges.
Q7: A hospital submits a claim for an outpatient surgical procedure. Medicare reimburses under the
Ambulatory Payment Classification (APC) system. How is the payment determined?
A. Based on the patient's diagnosis
B. Based on the procedure performed and any packaged services. [CORRECT]
C. Based on the length of stay
D. Based on the physician's charges
Correct Answer: B
Rationale: APCs group outpatient procedures into payment categories based on clinical similarity and
resource use. Each APC has a fixed payment rate that includes the procedure and certain packaged
ancillary services.
Q8: A patient with a Medicare Advantage plan (Part C) is admitted to the hospital. How does the
hospital typically receive payment?
A. Directly from Medicare fee-for-service
B. From the Medicare Advantage plan under a contracted rate (per diem, case rate, or DRG-based).
[CORRECT]
C. From the patient out-of-pocket only
D. From Medicaid as secondary payer
Correct Answer: B
Rationale: Medicare Advantage plans (Part C) are managed by private insurers that contract with
providers. Payment follows the plan's contracted terms rather than traditional Medicare fee-for-service
rates.
Q9: A hospital's MS-DRG weight for a pneumonia case is 1.2456. The hospital's base payment rate is
$6,500. What is the approximate Medicare payment?
2026/2027 | 100 Verified Q&A | A+
Graded | Pass Guaranteed - A+ Graded
Domain 1: Healthcare Reimbursement & Payment Models (Questions 1–20)
Q1: A hospital admits a 72-year-old Medicare patient for hip replacement surgery. The patient has
Medicare Part A and Part B coverage. Which part covers the inpatient hospital stay?
A. Medicare Part A. [CORRECT]
B. Medicare Part B
C. Medicare Part C
D. Medicare Part D
Correct Answer: A
Rationale: Medicare Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and
some home health services. Part B covers outpatient services and physician fees.
Q2: A physician practice is considering joining an Accountable Care Organization (ACO). Under the
Medicare Shared Savings Program, what is the primary financial incentive?
A. Guaranteed bonus payments regardless of performance
B. Shared savings if the ACO meets quality benchmarks and reduces costs below a spending target.
[CORRECT]
C. Higher fee-for-service reimbursement rates
D. Exemption from all Medicare regulations
Correct Answer: B
Rationale: ACOs earn shared savings by delivering high-quality care at costs below Medicare's
established spending benchmark. Savings are shared between Medicare and the ACO based on quality
performance metrics.
Q3: A hospital is paid $28,000 for a cardiac bypass surgery under a bundled payment model. The
hospital's actual cost for the episode of care is $32,000. What is the financial outcome?
,A. The hospital receives additional payment to cover the $4,000 loss
B. The hospital absorbs the $4,000 loss. [CORRECT]
C. Medicare reimburses the actual cost of $32,000
D. The hospital can bill the patient for the difference
Correct Answer: B
Rationale: Bundled payment models transfer financial risk to the provider. The hospital receives the
fixed bundled amount regardless of actual costs, incentivizing efficiency and care coordination to
manage expenses within the payment.
Q4: A Medicaid patient is admitted to the hospital. The state Medicaid program pays 60% of the
allowable cost, and the federal government pays the remaining 40% through FMAP. If the allowable cost
is $10,000, what is the federal share?
A. $4,000. [CORRECT]
B. $6,000
C. $10,000
D. $2,500
Correct Answer: A
Rationale: The Federal Medical Assistance Percentage (FMAP) represents the federal government's
share of Medicaid costs. At 40% FMAP, the federal share of a $10,000 allowable cost is $4,000.
Q5: A health system is negotiating a capitation contract with a commercial payer for 10,000 covered
lives. The capitation rate is $450 per member per month (PMPM). What is the annual revenue from this
contract?
A. $45 million
B. $54 million. [CORRECT]
C. $60 million
D. $72 million
Correct Answer: B
Rationale: Annual revenue = 10,000 members × $450 PMPM × 12 months = $54,000,000. Capitation
provides predictable revenue but requires effective cost management to maintain profitability.
Q6: Under the Resource-Based Relative Value Scale (RBRVS), a physician procedure has 2.5 work RVUs,
1.8 practice expense RVUs, and 0.4 malpractice RVUs. The conversion factor is $36.00. What is the
Medicare payment?
, A. $133.20
B. $169.20. [CORRECT]
C. $198.00
D. $216.00
Correct Answer: B
Rationale: Total RVUs = 2.5 + 1.8 + 0.4 = 4.7. Medicare payment = 4.7 × $36.00 = $169.20. RBRVS
standardizes physician payment based on resource intensity rather than historical charges.
Q7: A hospital submits a claim for an outpatient surgical procedure. Medicare reimburses under the
Ambulatory Payment Classification (APC) system. How is the payment determined?
A. Based on the patient's diagnosis
B. Based on the procedure performed and any packaged services. [CORRECT]
C. Based on the length of stay
D. Based on the physician's charges
Correct Answer: B
Rationale: APCs group outpatient procedures into payment categories based on clinical similarity and
resource use. Each APC has a fixed payment rate that includes the procedure and certain packaged
ancillary services.
Q8: A patient with a Medicare Advantage plan (Part C) is admitted to the hospital. How does the
hospital typically receive payment?
A. Directly from Medicare fee-for-service
B. From the Medicare Advantage plan under a contracted rate (per diem, case rate, or DRG-based).
[CORRECT]
C. From the patient out-of-pocket only
D. From Medicaid as secondary payer
Correct Answer: B
Rationale: Medicare Advantage plans (Part C) are managed by private insurers that contract with
providers. Payment follows the plan's contracted terms rather than traditional Medicare fee-for-service
rates.
Q9: A hospital's MS-DRG weight for a pneumonia case is 1.2456. The hospital's base payment rate is
$6,500. What is the approximate Medicare payment?
