MHA 706 Midterm- Lord With Best Solutions
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.
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.
