HFMA
CHCRS
LATEST FINAL TEST REVIEW
Q&S
©2024/2025
,1. What is the primary purpose of hospital cost reporting?
A) To determine the profitability of the hospital
B) To fulfill regulatory requirements
C) To assist in the management of hospital resources
D) To provide data for public health research
Correct Answer: B) To fulfill regulatory requirements
Rationale: Hospital cost reporting primarily serves to meet the
regulatory requirements set by healthcare authorities, ensuring
transparency and accountability in the financial operations of
healthcare institutions.
2. Which of the following is a key component of the Medicare Cost
Report?
A) Executive compensation
B) Marketing expenses
C) Direct patient care costs
D) Philanthropic income
Correct Answer: C) Direct patient care costs
Rationale: Direct patient care costs are essential components of
the Medicare Cost Report as they directly relate to the
reimbursement process and reflect the actual expenses incurred in
providing care to patients.
©2024/2025
,3. In hospital cost reporting, what does the term 'cost-to-charge
ratio' refer to?
A) The ratio of total hospital expenses to total hospital revenue
B) The ratio of total hospital costs to total charges for services
C) The ratio of direct patient care costs to indirect care costs
D) The ratio of administrative costs to total hospital charges
Correct Answer: B) The ratio of total hospital costs to total
charges for services
Rationale: The cost-to-charge ratio is a measure used in hospital
cost reporting to determine the relationship between the costs
incurred by the hospital and the charges billed for services
provided.
4. What role does the cost report play in the determination of
hospital reimbursement rates?
A) It is used as a guide for setting competitive prices
B) It provides a historical account of hospital finances
C) It is a key document used by payers to set reimbursement
rates
D) It serves as a financial statement for investors
Correct Answer: C) It is a key document used by payers to set
reimbursement rates
©2024/2025
, Rationale: Hospital cost reports are critical in the determination
of reimbursement rates as they provide payers with detailed insights
into the costs associated with patient care, which are used to
establish fair and accurate reimbursement levels.
5. How does the allocation of overhead costs affect hospital cost
reporting?
A) It decreases the total cost reported
B) It has no effect on the cost report
C) It ensures that direct patient care costs are accurately reported
D) It distributes indirect costs across various departments and
services
Correct Answer: D) It distributes indirect costs across various
departments and services
Rationale: The allocation of overhead costs in hospital cost
reporting is crucial as it allows for the equitable distribution of
indirect costs, such as administration and facility maintenance,
across different departments and services, reflecting a more
accurate picture of the costs associated with each.
6. What is the significance of the Worksheet S-10 in hospital cost
reporting?
A) It details the hospital's ownership and management structure
B) It reports on the uncompensated care provided by the
hospital
©2024/2025
CHCRS
LATEST FINAL TEST REVIEW
Q&S
©2024/2025
,1. What is the primary purpose of hospital cost reporting?
A) To determine the profitability of the hospital
B) To fulfill regulatory requirements
C) To assist in the management of hospital resources
D) To provide data for public health research
Correct Answer: B) To fulfill regulatory requirements
Rationale: Hospital cost reporting primarily serves to meet the
regulatory requirements set by healthcare authorities, ensuring
transparency and accountability in the financial operations of
healthcare institutions.
2. Which of the following is a key component of the Medicare Cost
Report?
A) Executive compensation
B) Marketing expenses
C) Direct patient care costs
D) Philanthropic income
Correct Answer: C) Direct patient care costs
Rationale: Direct patient care costs are essential components of
the Medicare Cost Report as they directly relate to the
reimbursement process and reflect the actual expenses incurred in
providing care to patients.
©2024/2025
,3. In hospital cost reporting, what does the term 'cost-to-charge
ratio' refer to?
A) The ratio of total hospital expenses to total hospital revenue
B) The ratio of total hospital costs to total charges for services
C) The ratio of direct patient care costs to indirect care costs
D) The ratio of administrative costs to total hospital charges
Correct Answer: B) The ratio of total hospital costs to total
charges for services
Rationale: The cost-to-charge ratio is a measure used in hospital
cost reporting to determine the relationship between the costs
incurred by the hospital and the charges billed for services
provided.
4. What role does the cost report play in the determination of
hospital reimbursement rates?
A) It is used as a guide for setting competitive prices
B) It provides a historical account of hospital finances
C) It is a key document used by payers to set reimbursement
rates
D) It serves as a financial statement for investors
Correct Answer: C) It is a key document used by payers to set
reimbursement rates
©2024/2025
, Rationale: Hospital cost reports are critical in the determination
of reimbursement rates as they provide payers with detailed insights
into the costs associated with patient care, which are used to
establish fair and accurate reimbursement levels.
5. How does the allocation of overhead costs affect hospital cost
reporting?
A) It decreases the total cost reported
B) It has no effect on the cost report
C) It ensures that direct patient care costs are accurately reported
D) It distributes indirect costs across various departments and
services
Correct Answer: D) It distributes indirect costs across various
departments and services
Rationale: The allocation of overhead costs in hospital cost
reporting is crucial as it allows for the equitable distribution of
indirect costs, such as administration and facility maintenance,
across different departments and services, reflecting a more
accurate picture of the costs associated with each.
6. What is the significance of the Worksheet S-10 in hospital cost
reporting?
A) It details the hospital's ownership and management structure
B) It reports on the uncompensated care provided by the
hospital
©2024/2025
