THE DEFINITIVE ACHE BOG (BOARD OF GOVERNORS) EXAM
PREPARATION BANK: 200 FREQUENTLY TESTED QUESTIONS &
ANSWERS WITH RATIONALES
1. A hospital's governing board is considering a major capital
expansion. What is the board's PRIMARY fiduciary duty in this
decision?
A) Maximize return on investment for shareholders
B) Ensure the expansion aligns with the community benefit mission
C) Approve the expansion without financial analysis to expedite
construction
D) Defer the decision entirely to the medical staff
Correct Answer: B
Rationale: The board's fiduciary duty includes both duty of obedience
(to the mission) and duty of care. For not-for-profit healthcare
organizations, the primary duty is to ensure decisions align with the
community benefit mission while also exercising financial prudence.
Option A applies to for-profit entities. Option C violates duty of care.
Option D abdicates board responsibility.
2. Which of the following is the BEST description of capitation in
healthcare reimbursement?
A) A payment model where providers are paid for each service rendered
B) A fixed per-member per-month payment to providers regardless of
services used
,C) A payment system based on diagnosis-related groups
D) A fee-for-service model with quality bonuses
Correct Answer: B
Rationale: Capitation is a fixed payment per enrollee per month to a
provider, regardless of whether the enrollee seeks care. Option A
describes fee-for-service. Option C describes DRGs. Option D describes
value-based models.
3. Under EMTALA (Emergency Medical Treatment and Active Labor
Act), a hospital with an emergency department MUST:
A) Provide stabilizing treatment to any patient who presents, regardless
of ability to pay
B) Transfer any uninsured patient to a public hospital
C) Require pre-authorization before treating emergency patients
D) Limit emergency services to established patients only
Correct Answer: A
Rationale: EMTALA requires hospitals with EDs to provide a medical
screening examination and stabilizing treatment to anyone who
presents, regardless of insurance status or ability to pay. Options B, C,
and D violate EMTALA provisions.
4. A healthcare executive discovers a subordinate has been falsifying
quality reports. According to the ACHE Code of Ethics, the executive
should FIRST:
A) Terminate the subordinate immediately without investigation
B) Ignore the issue to avoid workplace conflict
,C) Investigate the matter and take appropriate corrective action
D) Report the subordinate to the board without discussing it with them
Correct Answer: C
Rationale: The ACHE Code of Ethics requires executives to investigate
potential violations and take appropriate corrective action. Immediate
termination without investigation (A) may be premature, ignoring (B)
violates ethical duty, and reporting without discussion (D) bypasses due
process.
5. What is the PRIMARY purpose of a healthcare organization's
strategic plan?
A) To satisfy regulatory requirements
B) To provide a roadmap for achieving the organization's mission and
vision
C) To increase the CEO's compensation
D) To document past performance
Correct Answer: B
Rationale: Strategic planning provides direction for achieving mission
and vision. It is not primarily for regulation (A), CEO compensation (C),
or historical documentation (D).
6. Which ratio measures an organization's ability to meet its short-
term obligations?
A) Debt-to-equity ratio
B) Current ratio
, C) Operating margin
D) Days in accounts receivable
Correct Answer: B
Rationale: The current ratio (current assets/current liabilities) measures
short-term liquidity. Debt-to-equity (A) measures leverage. Operating
margin (C) measures profitability. Days in AR (D) measures collection
efficiency.
7. The medical staff bylaws of a healthcare organization MUST be
approved by:
A) The medical staff only
B) The governing board
C) The state department of health
D) The hospital CEO
Correct Answer: B
Rationale: The governing board has ultimate authority and
responsibility for the quality of care and must approve medical staff
bylaws. While medical staff participates in development, final approval
rests with the board.
8. Which of the following is an example of a healthcare organization's
internal stakeholder?
A) Patients
B) Government regulators
C) Employees
D) Insurance companies
PREPARATION BANK: 200 FREQUENTLY TESTED QUESTIONS &
ANSWERS WITH RATIONALES
1. A hospital's governing board is considering a major capital
expansion. What is the board's PRIMARY fiduciary duty in this
decision?
A) Maximize return on investment for shareholders
B) Ensure the expansion aligns with the community benefit mission
C) Approve the expansion without financial analysis to expedite
construction
D) Defer the decision entirely to the medical staff
Correct Answer: B
Rationale: The board's fiduciary duty includes both duty of obedience
(to the mission) and duty of care. For not-for-profit healthcare
organizations, the primary duty is to ensure decisions align with the
community benefit mission while also exercising financial prudence.
Option A applies to for-profit entities. Option C violates duty of care.
Option D abdicates board responsibility.
2. Which of the following is the BEST description of capitation in
healthcare reimbursement?
A) A payment model where providers are paid for each service rendered
B) A fixed per-member per-month payment to providers regardless of
services used
,C) A payment system based on diagnosis-related groups
D) A fee-for-service model with quality bonuses
Correct Answer: B
Rationale: Capitation is a fixed payment per enrollee per month to a
provider, regardless of whether the enrollee seeks care. Option A
describes fee-for-service. Option C describes DRGs. Option D describes
value-based models.
3. Under EMTALA (Emergency Medical Treatment and Active Labor
Act), a hospital with an emergency department MUST:
A) Provide stabilizing treatment to any patient who presents, regardless
of ability to pay
B) Transfer any uninsured patient to a public hospital
C) Require pre-authorization before treating emergency patients
D) Limit emergency services to established patients only
Correct Answer: A
Rationale: EMTALA requires hospitals with EDs to provide a medical
screening examination and stabilizing treatment to anyone who
presents, regardless of insurance status or ability to pay. Options B, C,
and D violate EMTALA provisions.
4. A healthcare executive discovers a subordinate has been falsifying
quality reports. According to the ACHE Code of Ethics, the executive
should FIRST:
A) Terminate the subordinate immediately without investigation
B) Ignore the issue to avoid workplace conflict
,C) Investigate the matter and take appropriate corrective action
D) Report the subordinate to the board without discussing it with them
Correct Answer: C
Rationale: The ACHE Code of Ethics requires executives to investigate
potential violations and take appropriate corrective action. Immediate
termination without investigation (A) may be premature, ignoring (B)
violates ethical duty, and reporting without discussion (D) bypasses due
process.
5. What is the PRIMARY purpose of a healthcare organization's
strategic plan?
A) To satisfy regulatory requirements
B) To provide a roadmap for achieving the organization's mission and
vision
C) To increase the CEO's compensation
D) To document past performance
Correct Answer: B
Rationale: Strategic planning provides direction for achieving mission
and vision. It is not primarily for regulation (A), CEO compensation (C),
or historical documentation (D).
6. Which ratio measures an organization's ability to meet its short-
term obligations?
A) Debt-to-equity ratio
B) Current ratio
, C) Operating margin
D) Days in accounts receivable
Correct Answer: B
Rationale: The current ratio (current assets/current liabilities) measures
short-term liquidity. Debt-to-equity (A) measures leverage. Operating
margin (C) measures profitability. Days in AR (D) measures collection
efficiency.
7. The medical staff bylaws of a healthcare organization MUST be
approved by:
A) The medical staff only
B) The governing board
C) The state department of health
D) The hospital CEO
Correct Answer: B
Rationale: The governing board has ultimate authority and
responsibility for the quality of care and must approve medical staff
bylaws. While medical staff participates in development, final approval
rests with the board.
8. Which of the following is an example of a healthcare organization's
internal stakeholder?
A) Patients
B) Government regulators
C) Employees
D) Insurance companies
