NAB Practice EXAM LATEST 2026-2027
QUESTIONS AND 100% Verified ANSWERS
A RUG is a?
1. category in a resident classification system
2. standardized resident assessment form
3. cost report form
4. billing form - answer>>1. A "RUG" (resource utilizaiton group) is one category in a 53-category
resident classification scheme used in the Medicare Prospective Payment System for skilled nursing
facilities. The per diem reimbursement rate that the SNF receives depends on which RUG the Medicare
beneficiary on Part A covered stay was assigned to for that day. The assignment to a RUG is made on
the basis of information from a standardized resident assessment form called the MDS.
Completion of the medicare cost report requires carrying out all except which one of the following
tasks?
1. cost finding
2. apportioning the costs for caring for medicare residents from the costs for caring for non-medicare
residents
3. aging of accounts receivable
4. determination of allowable costs - answer>>3. Aging of accounts receivable is a useful tool for
tracking outstanding bills but it is not required to complete the medicare cost report
The term for unintentional improper or excessive use of benefits of a health insurance program is?
1. fraud
2. abuse
3. kickback
4. grossing up - answer>>2
,The process by which an individual becomes eligible for medicaid by incurring medical expenses until
personal resources fall below a specified ceiling is called?
1. indemnity
2. personal needs allowance
3. spend down
4. swapping - answer>>3
Which of the following statements regarding budgeting procedure is correct?
1. An operating budget projects only revenues from providing resident services?
2. the operating budget includes planned expenditures for major building renovations
3. a cash budget may provide advance warning of months when cash outlays fall short of cash receipts
4. the capital budget includes epxenses for all routine maintenance of equipment - answer>>3. The
anser is not 1: the revenue budget part of an operating budget will include operating revenues in
addition to patient-service revenues. The answer is not 2: plans for major capital expenditures go into
the capital budget, not the operating budget. The answer is not 4: routine maintenance expense and
repairs that do not increase the value of an asset or extend its useful life are expense items that go in
the operating budget.
An example of a variable cost is
1. real estate taxes
2. nursing supplies
3. rent
4. mortgage loan payments - answer>>2. The cost of nursing supplies can be expected to increase in
direct proportion to the number of resident-days, census, occupancy rate or other measure of the
facility's business activity. THe answer is not 1, 3, or 4; taxes, rent, and mortgage loan payments are
fixed costs. THis is true even of payments for variable-rate mortage loans. Such loans may vary over
time with changes in the wider economy, but not with any measure of the facility's activity.
,If the facility's occupancy increases from 94% to 98%, the fixed cost per resident:
1. decreases slightly
2. remains the same
3. increases slightly
4. increases slightly - answer>>1. Fixed cost per resident is calculated by dividing total fixed costs by
number of residents (currently-occupided beds). If the occupancy rate increases slightly, fixed costs do
not change (by definition), and number of residents increase, resulting in a decreased fixed cost per
resident. Another way of saying this is that the fixed costs are spread over a larger number of
residents.
a nursing home is considering the purchase of a new dish-washing machine that costs $6000 and has a
useful life of 10 years. It is estimated that the machine will reduce annual operating costs by $800 over
each of the next ten years. What is the payback period?
1. 0.75 years
2. 1.33 years
3. 7.5 years
4. 10 years - answer>>3. Calculate the payback period by dividing the $6,000 cost of the item by the
expected annual reduction in operating costs of $800. THis gives 7.5 as the payback period in years.
The type of insurance that would cover the facility if it were sued by a resident who was injured as the
result of a medication error by a nurse employee is
1. patients compensation
2. health insurance
3. general liability
4. professional liability - answer>>4. Professional liability (or malpractice) insurance covers losses due
to negligence by an employed nurse. (note that there is no such thing as option 1 "patients insurance".
, business interruption insurance covers
1. losses resulting from employee dishonesty
2. repair of wind damage to the building
3. loss of revenue from having to keep beds empty while a unit undergoes repairs due to wind damage
to a building
4. claims resulting from negligence in the rendering of care to a resident - answer>>3. Business
interruption insurance covers loss of income resulting from a reduction or stoppage of operations
caused by an insured peril like wind or fire damage
a W-4 form shows each employee's
1. number of claimed exemptions for withholding purposes
2. gross earnings
3. number of overtime hours
4. FICA tax withheld - answer>>1
To obtain maximum reimbursement under the medicare prospective payment system, a skilled nursing
facility should do all except which one of the following?
1. record on the MDS all the information about the resident that can determine assignment to a RUG
2. Have physical therapists who serve part A covered residents bill medicare directly
3. track costs by RUG categories
4. collect MDS information more frequently part A covered residents than for other residents -
answer>>2. The consolidated billing rules prohibit separate billing for physical therapy (and
occupational and speech therapy) provided to a medicare beneficiary on a part A covered stay
Which of the following practices is illegal for a medicaid certified facility?
1. Offering a resident staff assistance in applying for medicaid
QUESTIONS AND 100% Verified ANSWERS
A RUG is a?
1. category in a resident classification system
2. standardized resident assessment form
3. cost report form
4. billing form - answer>>1. A "RUG" (resource utilizaiton group) is one category in a 53-category
resident classification scheme used in the Medicare Prospective Payment System for skilled nursing
facilities. The per diem reimbursement rate that the SNF receives depends on which RUG the Medicare
beneficiary on Part A covered stay was assigned to for that day. The assignment to a RUG is made on
the basis of information from a standardized resident assessment form called the MDS.
Completion of the medicare cost report requires carrying out all except which one of the following
tasks?
1. cost finding
2. apportioning the costs for caring for medicare residents from the costs for caring for non-medicare
residents
3. aging of accounts receivable
4. determination of allowable costs - answer>>3. Aging of accounts receivable is a useful tool for
tracking outstanding bills but it is not required to complete the medicare cost report
The term for unintentional improper or excessive use of benefits of a health insurance program is?
1. fraud
2. abuse
3. kickback
4. grossing up - answer>>2
,The process by which an individual becomes eligible for medicaid by incurring medical expenses until
personal resources fall below a specified ceiling is called?
1. indemnity
2. personal needs allowance
3. spend down
4. swapping - answer>>3
Which of the following statements regarding budgeting procedure is correct?
1. An operating budget projects only revenues from providing resident services?
2. the operating budget includes planned expenditures for major building renovations
3. a cash budget may provide advance warning of months when cash outlays fall short of cash receipts
4. the capital budget includes epxenses for all routine maintenance of equipment - answer>>3. The
anser is not 1: the revenue budget part of an operating budget will include operating revenues in
addition to patient-service revenues. The answer is not 2: plans for major capital expenditures go into
the capital budget, not the operating budget. The answer is not 4: routine maintenance expense and
repairs that do not increase the value of an asset or extend its useful life are expense items that go in
the operating budget.
An example of a variable cost is
1. real estate taxes
2. nursing supplies
3. rent
4. mortgage loan payments - answer>>2. The cost of nursing supplies can be expected to increase in
direct proportion to the number of resident-days, census, occupancy rate or other measure of the
facility's business activity. THe answer is not 1, 3, or 4; taxes, rent, and mortgage loan payments are
fixed costs. THis is true even of payments for variable-rate mortage loans. Such loans may vary over
time with changes in the wider economy, but not with any measure of the facility's activity.
,If the facility's occupancy increases from 94% to 98%, the fixed cost per resident:
1. decreases slightly
2. remains the same
3. increases slightly
4. increases slightly - answer>>1. Fixed cost per resident is calculated by dividing total fixed costs by
number of residents (currently-occupided beds). If the occupancy rate increases slightly, fixed costs do
not change (by definition), and number of residents increase, resulting in a decreased fixed cost per
resident. Another way of saying this is that the fixed costs are spread over a larger number of
residents.
a nursing home is considering the purchase of a new dish-washing machine that costs $6000 and has a
useful life of 10 years. It is estimated that the machine will reduce annual operating costs by $800 over
each of the next ten years. What is the payback period?
1. 0.75 years
2. 1.33 years
3. 7.5 years
4. 10 years - answer>>3. Calculate the payback period by dividing the $6,000 cost of the item by the
expected annual reduction in operating costs of $800. THis gives 7.5 as the payback period in years.
The type of insurance that would cover the facility if it were sued by a resident who was injured as the
result of a medication error by a nurse employee is
1. patients compensation
2. health insurance
3. general liability
4. professional liability - answer>>4. Professional liability (or malpractice) insurance covers losses due
to negligence by an employed nurse. (note that there is no such thing as option 1 "patients insurance".
, business interruption insurance covers
1. losses resulting from employee dishonesty
2. repair of wind damage to the building
3. loss of revenue from having to keep beds empty while a unit undergoes repairs due to wind damage
to a building
4. claims resulting from negligence in the rendering of care to a resident - answer>>3. Business
interruption insurance covers loss of income resulting from a reduction or stoppage of operations
caused by an insured peril like wind or fire damage
a W-4 form shows each employee's
1. number of claimed exemptions for withholding purposes
2. gross earnings
3. number of overtime hours
4. FICA tax withheld - answer>>1
To obtain maximum reimbursement under the medicare prospective payment system, a skilled nursing
facility should do all except which one of the following?
1. record on the MDS all the information about the resident that can determine assignment to a RUG
2. Have physical therapists who serve part A covered residents bill medicare directly
3. track costs by RUG categories
4. collect MDS information more frequently part A covered residents than for other residents -
answer>>2. The consolidated billing rules prohibit separate billing for physical therapy (and
occupational and speech therapy) provided to a medicare beneficiary on a part A covered stay
Which of the following practices is illegal for a medicaid certified facility?
1. Offering a resident staff assistance in applying for medicaid
