HealthCare Finance Test 1 Questions with Complete Answers Already Passed

HealthCare Finance Test 1 Questions with Complete Answers Already Passed Which of the following statements about finance, accounting, and financial management is most correct? - Answers the primary role of finance is to plan for, acquire, and use resources to maximize the efficiency (and value) of the enterprise which of the following is not a finance activity? - Answers facilities management which of the following statements about the finance departments of large healthcare organizations are most correct? - Answers all of the statements are correct - the department is headed by the chief financial officer - the CFO typically reports directly to the CEO - the CFO usually is assisted by a comptroller and a treasurer - the comptroller and treasure often have managers under the responsible for specific functions, such as patient accounts management and cash management which of the following statements about hospitals is most correct? - Answers the majority of hospitals are public or not for profit (as opposed to investor owned) Which of the following statements about healthcare providers is incorrect? - Answers there are many more hospitals than there are nursing homes, but nursing homes tend to have a greater number of beds in the united states, the highest proportion of healthcare expenditures is for - Answers hospital care which of the following statements about regulatory and legal issues is most correct - Answers most providers primary legal concern is professional liability recent surveys of members of the American College of Healthcare Executives and Healthcare Financial Management Association indicate several critical concerns and challenges, Which of the following concerns did they identify? - Answers - answers a & b - adequate reimbursement from government payers - balancing clinical and financial issues The four Cs (character, capability, charisma, and courtesy) as described in the textbook summarize the attributes needed to be a good financial manager - Answers false The role of finance in healthcare organizations has increased in importance over time because the finance function must support a multitude of activities, such as cost containment, payer negotiations, and joint venture activities - Answers true many studies have demonstrated the integrated delivery systems are able to provide higher-quality care at lower cost than can stand-alone specialized provided organizations - Answers false which of the following activities are characteristic of businesses? - Answers -all of the above -raising money in the capital markets -using money raised to purchase assets, such as land, buildings, and equipment - using the purchased assets to create goods or services - sustaining themselves financially by selling their goods or services which of the following statements about the legal forms of for-profit business organization is most correct? - Answers corporations have the advantage of limited liability to owners which of the following statements about investor-owned (for-profit) corporations is incorrect? - Answers when an individual sells his stock, the company receives the proceeds from the sale which of the following statements about not-for-profit corporations is most correct? - Answers they can issue tax-exempt (municipal) debt which of the following individuals are not stakeholders in not-for-profit corporations - Answers stockholders assume that jane adams pays income taxes at a 35 percent rate. What would be the after-tax amount on $100 of interest income she receives? - Answers $65 Assume that John Richards pays income taxes at a 30percent rate. He currently owns a not-for-profit (municipal) bond that pays 5 percent interest. What interest rate would have to be set on a for-profit (corporate) bond to produce the same amount of usable (after-tax) income? - Answers 7.1 percent Which of the following statements about benefit corporations (B corporations) is most correct? - Answers they allow corporate boards and managers to sacrifice shareholder value for the greater good Assume that Reginald Worthington, who pays 40 percent in income taxes, plans to contribute 100,000 to not-for-profit Ravenswood Community Hospital. Without contribution, his tax bill would be 500,000.. What would be his tax bill if he makes the contribution? - Answers 460,000 From a financial perspective, businesses and pure charities are identical (i.e., they operate in a similar fashion). - Answers false The primary goal of not-for-profit corporations is expressed in a mission statement and often involves service to the community. - Answers true Because the organizational and financial goals of for-profit and not-for-profit provider organizations differ, their financial decision-making processes lead to different decisions - Answers false Form 990 is a report filed with state regulators that is used to rank hospitals on the basis of patient satisfaction - Answers false To be workable, insurance must have which of the following characteristics - Answers - all of the above - pooling of losses -payment only for random losses - risk transfer -indemnification Which of the following statements about adverse selection and underwriting is incorrect? - Answers e. Health insurers have unlimited power to set underwriting provisions Which of the following statements about fee-for-service reimbursement is incorrect - Answers payment may be based on the number of covered lives Pay-for-performance plans typically - Answers a. reward providers for meeting specified quality (and sometimes cost) standard Which of the following statements about the Medicare payment system for hospital inpatient care (IPPS) is(are) most correct? - Answers - all of the above are correct a. The basis for payment is the patient's diagnosis as specified by diagnosis-related group (DRG). b. The DRG payment is adjusted for severity. c. Payments are increased for patients with very high costs (outliers). d. Payments are adjusted for the hospital's local conditions (wage rates). From a provider's perspective, which of the following third-party payment methods has utilization risk - Answers capitation which of the following statements about Medicare reimbursement of physicians is most correct? - Answers the payment is based on relative value units Which of the following statements about coding is incorrect? - Answers coders typically are registered nurses who receive special training Which of the following statements about accountable care organizations (ACOs) is most correct? - Answers ACOs can distribute bonuses when targets are met and impose penalties when targets are missed Which of the following statements about healthcare reform is incorrect? - Answers Although reform provisions affect private insurers, they do not affect the major government programs of Medicare and Medicaid Moral hazard is the risk that a health insurer will not pay for covered services - Answers false There are several types of managed care organizations (MCOs). Regardless of type, all MCOs have an incentive to reduce utilization - Answers true A medical home (patient-centered medical home) is a team-based model of care led by a personal physician who works collaboratively with the team's other healthcare professionals to provide continuous, coordinated, and integrated care throughout a patient's lifetime. - Answers true a business's set of financial statements includes which of the following items? - Answers - answers (a),(b), and (c) -income statement -balance sheet -statement of cash flows which of the following statements about cash versus actual accounting is most correct? - Answers in cash accounting, an event is recognized when a cash transaction occurs which of the following statements about the income statements is most correct? - Answers - it reports the economic profitability of an organization which of the following statements about revenues is (are) most correct? - Answers net patient revenue equals patient service revenue less provision for bad debts which of the following statements about income statement expenses is (are) most correct? - Answers -answers (b) and (c) are correct. - supplies are expensed (shown) on the income statement when consumed (used to provide patient services) - all lease expense is reported on the income statement which of the following statements concerning depreciation expense is most correct? - Answers depreciation expense accounts for the loss of value of fixed assets (plant and equipment)