MHA 706 Midterm- Lord questions with
complete solutions rated
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.
Impact of the Affordable Care Act (what the bill changed about the healthcare environment) - correct
answer ✔✔Created new standards, individual mandates, exchanges, and Medicaid expansion.
Focused on quality through clinical compensation, bundled payment, value-based purchasing.
Regulations and standards of financial accounting (e.g. SEC, GAAP, FASB) - correct answer ✔✔-Securities
and Exchange Commission (SEC): has the legal authority to regulate the form and content of financial
statements.
-Financial Accounting Standards Board (FASB)
-Generally Accepted Accounting Principles (GAAP): the conventions that have evolved from the
pronouncements and rulings of the implementing organizations constitute a set of guidelines for the
complete solutions rated
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.
Impact of the Affordable Care Act (what the bill changed about the healthcare environment) - correct
answer ✔✔Created new standards, individual mandates, exchanges, and Medicaid expansion.
Focused on quality through clinical compensation, bundled payment, value-based purchasing.
Regulations and standards of financial accounting (e.g. SEC, GAAP, FASB) - correct answer ✔✔-Securities
and Exchange Commission (SEC): has the legal authority to regulate the form and content of financial
statements.
-Financial Accounting Standards Board (FASB)
-Generally Accepted Accounting Principles (GAAP): the conventions that have evolved from the
pronouncements and rulings of the implementing organizations constitute a set of guidelines for the
