LSUS MHA 706 Midterm Exam Questions with Complete Solutions Graded A+

1. The major provisions of the Patient Protection & Affordable Care Act of 2010 were?Answer: -Banning of preexisting condition coverage limitations -Free preventative care -Medicaid expansion 2. Which of the following statement(s) about the finance department a t large healthcare organizations is/are correct?Answer: -The CFO typically reports directly to the chief executive officer (CEO) -The CFO is usually assisted by a comptroller and treasurer -The department is headed by the chief financial officer (CFO) (sometimes called the vice president-finance) 3. In a not-for-profit hospital, the following are example(s) of a stakeholder.Answer: - -Vendor -Employee -Community 4. Stockholders have all of the following right(s)...Answer: -Claim on residual liquidation proceeds -Right of control -A possible dividend and/or capital gains 5. Which of the following statements about finance accounting, and financial management is most correct?Answer: Financial management provides the theory, con- cepts, and tools necessary to help managers make better financial decisions. 6. External reportingAnswer: What is a DISADVANTAGE of being a corporation? 7. Facilities managementAnswer: Which of the following are not finance activities? 8. What is NOT a advantage of proprietorship?Answer: Unlimited liability 9. A not-for-profit corporation can also be called a 529(b).Answer: False 10. The primary goal of investor-owned corporations is shareholder wealth maximization.Answer: True 11. CopaymentsAnswer: The fixed amount for a covered service that the insurer mandates that the patient pay to the provider before the patient receives service from the provider. 12. CoinsuranceAnswer: Requires an individual to pay for a certain percentage of the eligible medical expenses. 13. Adverse selectionAnswer: Individuals at greater risk of needing health care are more likely to purchase insurance. 14. DeductiblesAnswer: The amount that must be paid out of pocket by the policyholder before an insurance provider will pay any expenses. 15. Moral hazardAnswer: The risk of overuse of health services because the insured does not bear the full cost of the consequences. 16. Medicare Part BAnswer: Covers physician services, ambulatory surgical services, outpatient services, and certain other miscellaneous services. 17. Medicare Part AAnswer: Covers hospital and some skilled nursing coverage 18. Medicare Part DAnswer: Covers prescription drugs 19. Medicare Part CAnswer: Is often called Medicare Advantage 20. Charge-BasedAnswer: Payers pay based off of pre-determined "chargemaster." These payments are usually discounted up to 20% to 50%. 21. Cost-BasedAnswer: Providers were reimbursed for "actual" costs. 22. CapitationAnswer: Payment is (usually) made on a per member per month basis 23. Prospective PaymentAnswer: Are use to pay for either a predefined procedure, diag- nosis, per diem or bundled service 24. Has potential to result in 'gamesmanship that can inflate healthcare chargesAnswer: Charge-Based 25. May result in up-codingAnswer: Prospective Payment 26. No incentive to control costsAnswer: Cost-Based 27. Providers may have an incentive to reduce utilizationAnswer: Capitation 28. Under the broad category of fee-for-service (FFS), what are the three main types of fee-for-service methodologies that were discussed in class?- Answer: -Cost-Based -Charge-Based -Prospective Payments 29. Select all of the TRUE statements about ICD Codes.Answer: -The greater the number of digits in the code, the more detailed the disease. -The codes currently consist of 3, 4, 5, 6, or 7 digits/characters -ICD- stands for International Classification of Diseases -ICD-10 is the current standard 30. Identify all the different types of managed care insurance plans.Answer: -Health maintenance organizations (HMOs) -Point-of-Service (POS) plans -Preferred provider organizations (PPOs) 31. Relative Value (RVUs) are standards that are payment components con- sisting of the following.Answer: -Work Expense -Malpractice/Liability Expense -Practice Expenses 32. For insurance to "work," it must have these basic characteristics.Answer: -Pooling of losses -Payment only for random (unforeseen and unexpected losses) -Risk transfer