HealthCare Finance Test 1 2025

Which of the following statements about finance, accounting, and financial management is most correct? - Correct Ans-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? - Correct Ans-facilities management which of the following statements about the finance departments of large healthcare organizations are most correct? - Correct Ans-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? - Correct Ans-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? - Correct Ans-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 - Correct Ans-hospital care which of the following statements about regulatory and legal issues is most correct - Correct Ans-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? - Correct Ans-- 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 - Correct Ans-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 - Correct Ans-true NURSING NURSING 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 - Correct Ans-false which of the following activities are characteristic of businesses? - Correct Ans--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? - Correct Ans-corporations have the advantage of limited liability to owners which of the following statements about investor-owned (for-profit) corporations is incorrect? - Correct Ans-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? - Correct Ans-they can issue tax-exempt (municipal) debt which of the following individuals are not stakeholders in not-for-profit corporations - Correct Ans-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? - Correct Ans-$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? - Correct Ans-7.1 percent Which of the following statements about benefit corporations (B corporations) is most correct? - Correct Ans-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? - Correct Ans-460,000 From a financial perspective, businesses and pure charities are identical (i.e., they operate in a similar fashion). - Correct Ans-false NURSING NURSING The primary goal of not-for-profit corporations is expressed in a mission statement and often involves service to the community. - Correct Ans-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 - Correct Ans-false Form 990 is a report filed with state regulators that is used to rank hospitals on the basis of patient satisfaction - Correct Ans-false To be workable, insurance must have which of the following characteristics - Correct Ans-- 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? - Correct Ans-e. Health insurers have unlimited power to set underwriting provisions Which of the following statements about fee-for-service reimbursement is incorrect - Correct Ans-payment may be based on the number of covered lives Pay-for-performance plans typically - Correct Ans-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? - Correct Ans-- 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 - Correct Ans-capitation which of the following statements about Medicare reimbursement of physicians is most correct? - Correct Ans-the payment is based on relative value units Which of the following statements about coding is incorrect? - Correct Ans-coders typically are registered nurses who receive special training NURSING NURSING Which of the following statements about accountable care organizations (ACOs) is most correct? - Correct Ans-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? - Correct Ans 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 - Correct Ans-false There are several types of managed care organizations (MCOs). Regardless of type, all MCOs have an incentive to reduce utilization - Correct Ans-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. - Correct Ans-true a business's set of financial statements includes which of the following items? - Correct Ans-- 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? - Correct Ans-in cash accounting, an event is recognized when a cash transaction occurs which of the following statements about the income statements is most correct? - Correct Ans-- it reports the economic profitability of an organization which of the following statements about revenues is (are) most correct? - Correct Ans 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? - Correct Ans--answers (b) and (c) are correct. - supplies are expensed (shown) on the income statement when consumed (used to