CNML TEST
QUESTIONS WITH VERIFIED ANSWERS LATEST UPDATE
Question 1.
DRGs
ANSWER
Diagnostic-Related Groups: payment rate based on specific diagnoses
Question 2.
Prospective Payment System
ANSWER
Used by Medicare-participating hospitals: pretreatment diagnosis billings based on DRGs; rate
decided ahead of time between insurance companies and hospitals
Question 3.
Exclusive Provider
ANSWER
Used by HMO's: insurance coverage for contracted providers or institutions
Question 4.
HMOs
ANSWER
Health maintenance organizations: comprehensive healthcare to people who pay a fee for a
fixed period of time
Question 5.
Capitation
ANSWER
Fixed rate paid to provider per member per month for healthcare services; set fee paid by
insurance company per month for all the patient needs
,Question 6.
PPOs
ANSWER
Preferred provider organizations: special reduced rate for services when customers use certain
providers approved by the insurance company; usually fee-for-service
Question 7.
IPAs
ANSWER
Individual provider arrangements: provide care in their offices for prepaid plans; coalition of
physicians who serve HMO patients and third-party patients
Question 8.
Fulltime FTE Hours
ANSWER
2080 hours (1.0 @ 40 hours per week)
Question 9.
Capital Expenses
ANSWER
Long-term equipment or physical purchases: usually over $500-$1000 that will last years and
depreciate over time and be used multiple times
Question 10.
Zero-Based Budget
ANSWER
With each new budget (i.e. fiscal year), it is determined which programs/areas get money; no
historical context is used; may rank packages and then only fund top-ranked ones; can be
time-consuming way to create a budget
,Question 11.
Variance Calculation & Reminders
ANSWER
Variance $ /Budgeted $ X 100 = % difference; contract staff on separate line of budget; many
staff sick costs more than a few staff on LOA
Question 12.
Cost of Nursing Services Calculation
ANSWER
Nurse Time X (Avg. RN Hourly Rate + Benefits + Indirects) = Total Nursing Cost per DRG
Question 13.
General Nurse Staffing Calculation
ANSWER
# of RNs needed X days open / # days worked per RN
Question 14.
FTE Definition & Calculation
ANSWER
Full-time equivalent = full-time employee paid for 1 year
FTE = (Hours per shift X # of days worked) / 40 hours
Question 15.
Fixed Costs
ANSWER
Stay the same no matter the census: manager salaries, keeping phones on, rent, etc.
Question 16.
Variable Costs
ANSWER
Change with census and how much staffing is used
, Question 17.
Net Revenue Calculation
ANSWER
Gross Revenue - Deductions from Revenue (DRGs and the Contractual allowances paid by
insurance companies)
Question 18.
UAP
ANSWER
Unlicensed assistive personnel (CNA's)
Question 19.
ADC
ANSWER
Average daily census (patients in a bed at midnight)
Question 20.
Total Patient Days Calculation
ANSWER
ADC X Days open per year (for SCH - ADC X 365)
Question 21.
Nurse Hours
Per Patient Day (HPPD) Calculation
ANSWER
Total Direct Care Hours / Total Patient Days = # of RN hours needed to provide care for a pt. for
24 hours.
For example - for 12 hour staff and 12 workers each shift you multiply 12 staff X 2 shifts = 24
staff X 12 hours each = 288 divided by midnight census of 31 = NHPPD
QUESTIONS WITH VERIFIED ANSWERS LATEST UPDATE
Question 1.
DRGs
ANSWER
Diagnostic-Related Groups: payment rate based on specific diagnoses
Question 2.
Prospective Payment System
ANSWER
Used by Medicare-participating hospitals: pretreatment diagnosis billings based on DRGs; rate
decided ahead of time between insurance companies and hospitals
Question 3.
Exclusive Provider
ANSWER
Used by HMO's: insurance coverage for contracted providers or institutions
Question 4.
HMOs
ANSWER
Health maintenance organizations: comprehensive healthcare to people who pay a fee for a
fixed period of time
Question 5.
Capitation
ANSWER
Fixed rate paid to provider per member per month for healthcare services; set fee paid by
insurance company per month for all the patient needs
,Question 6.
PPOs
ANSWER
Preferred provider organizations: special reduced rate for services when customers use certain
providers approved by the insurance company; usually fee-for-service
Question 7.
IPAs
ANSWER
Individual provider arrangements: provide care in their offices for prepaid plans; coalition of
physicians who serve HMO patients and third-party patients
Question 8.
Fulltime FTE Hours
ANSWER
2080 hours (1.0 @ 40 hours per week)
Question 9.
Capital Expenses
ANSWER
Long-term equipment or physical purchases: usually over $500-$1000 that will last years and
depreciate over time and be used multiple times
Question 10.
Zero-Based Budget
ANSWER
With each new budget (i.e. fiscal year), it is determined which programs/areas get money; no
historical context is used; may rank packages and then only fund top-ranked ones; can be
time-consuming way to create a budget
,Question 11.
Variance Calculation & Reminders
ANSWER
Variance $ /Budgeted $ X 100 = % difference; contract staff on separate line of budget; many
staff sick costs more than a few staff on LOA
Question 12.
Cost of Nursing Services Calculation
ANSWER
Nurse Time X (Avg. RN Hourly Rate + Benefits + Indirects) = Total Nursing Cost per DRG
Question 13.
General Nurse Staffing Calculation
ANSWER
# of RNs needed X days open / # days worked per RN
Question 14.
FTE Definition & Calculation
ANSWER
Full-time equivalent = full-time employee paid for 1 year
FTE = (Hours per shift X # of days worked) / 40 hours
Question 15.
Fixed Costs
ANSWER
Stay the same no matter the census: manager salaries, keeping phones on, rent, etc.
Question 16.
Variable Costs
ANSWER
Change with census and how much staffing is used
, Question 17.
Net Revenue Calculation
ANSWER
Gross Revenue - Deductions from Revenue (DRGs and the Contractual allowances paid by
insurance companies)
Question 18.
UAP
ANSWER
Unlicensed assistive personnel (CNA's)
Question 19.
ADC
ANSWER
Average daily census (patients in a bed at midnight)
Question 20.
Total Patient Days Calculation
ANSWER
ADC X Days open per year (for SCH - ADC X 365)
Question 21.
Nurse Hours
Per Patient Day (HPPD) Calculation
ANSWER
Total Direct Care Hours / Total Patient Days = # of RN hours needed to provide care for a pt. for
24 hours.
For example - for 12 hour staff and 12 workers each shift you multiply 12 staff X 2 shifts = 24
staff X 12 hours each = 288 divided by midnight census of 31 = NHPPD
