NEBC FINAL EXAM QUESTIONS AND
ALL CORRECT ANSWERS.
For Profit Organizations - Answer Can lawfully release a patient who does not have the ability to pay for
services (after EMTALA). Serve lower income populations. Owned by investors or shareholders. Large
portion of budget allocated to marketing and advertising.
not-for-profit organizations - Answer Must treat all conditions or people regardless of insurance or
ability to pay. Considered charities by IRS. Do not pay federal or state/local property taxes. Obligation to
the community.
Medicare - Answer National Health Insurance program for people 65 and older, disabled, and any age
with ESRD.
Medicare A - Answer Covers inpatient hospital stays, some hospice and home health care, no monthly
premium
Medicare B - Answer Medical insurance, pays for doctor services and outpatient services, PT/OT
services. Monthly premium.
Medicare C - Answer Often called the advantage plan or choice plan. Includes A and B, most include D.
May offer dental, vision, and wellness
Medicare D - Answer Prescription drug coverage. Monthly premium. Available to everyone, must join
Medicare plan that includes part D
Medicaid - Answer A federal and state assistance program that pays for health care services for people
who cannot afford them. Low-income children, pregnant women, and elderly. Pays long term care.
Affordable Care Act - Answer An expansion of medicaid, most of employers must provide health
insurance, have insurance or face surtax, prevents rejection based on pre-existing condition. Also
referred to as "Obamacare", signed into law in 2010. Make affordable health insurance available to more
people.
,Payors - Answer Employers, government, insurance companies, people who pay for healthcare services
Charity Pay - Answer Healthcare system received no reimbursement for services
Health Maintenance Organization (HMO) - Answer an organization that provides comprehensive
medical care to subscribers for a fixed fee. Cost effective care focused on preventative care. Network,
group, staff and independent practice associations.
Preferred Provider Organization (PPO) - Answer Group of healthcare providers that provide services to
a specific group, often at a reduced rate. Cost is higher to use out of network provider. Help negotiate
cost of services between the providers and purchasers.
Diagnosis Related Group (DRGs) - Answer classifies patients by age, diagnosis, surgical procedure, and
other information with hundreds of different categories to predict the use of hospital resources,
including length of stay, resulting in a fixed payment amount
Prospective Payment Systems (PPS) - Answer Required facilities providing services to Medicare clients
to be reimbursed using a fixed-rate system and included monetary incentives to reduce the length of
hospital stays.
(Based on diagnosis-related group (DRG) categories)
Social Health Maintenance Organization (SHMO) - Answer special type of health plan that provides the
full range of Medicare benefits offered by standard Medicare HMOs, plus other services that include the
following: prescription drug and chronic care benefits, respite care, and short-term nursing home care;
homemaker, personal care services, and medical transportation; eyeglasses, hearing aids, and dental
benefits
Pay for Performance (P4P) - Answer performance-oriented incentives for hospitals and physicians to
improve the quality of patient healthcare. 4 quality measures - performance, outcomes, patient
satisfaction/experience, structures and technologies (EHR)
, Value Based Purchasing - Answer A pay for performance methodology used to reimburse hospitals
based on outcomes. Provided by Centers for Medicare and Medicaid Services. Incentive payments to
acute-care hospitals yearly based on total performance score (TPS)
Budget Cycle - Answer Includes development, monitoring, reporting, justifying and variance analysis.
Four types of budget - revenue, expense, capital, and operating
Revenue - Answer anticipated amount of income during the budget period
Expense - Answer salary and nonsalary, fixed costs (remain constant such as rental fees and contract
fees) and variable costs (fluctuate based on unit activity such as census and acuity)
Capital - Answer equipment and renovation expenses. lifespan of 1 year of greater. consider cost of
item, installation, shipping or delivery charges, service contracts. Amortization (assigning cost of asset
over its lifetime) Depreciation (expensing fixed assets annually)
Operating Budget - Answer Annual budget. Based on past years unit activity predicting for next year.
Revenues and expenses for fiscal year.
How to create operating budget - Answer Need productivity goals, patient days, workload (HHPD -
hours per patient day), HPPD/shift and staffing needs, non-productive hours, productive/non-productive
hours over time, non-labor costs. SALARY is number one expense.
Patient Days - Answer Total inpatient days for a year. Calculated by adding together the daily patient
census for 365 days. Daily census is typically the unit census at midnight.
Average Daily Census (ADC) - Answer total patient days/number of calendar days. Total patient days
=3875. # of calendar days = 365. 3875/365 = 10.6 ADC.
Full Time Equivalency (FTE) - Answer Established by the health care reform law to aid in determining
tax credits for employees. Utilized by employer to determine staffing needs and cost-effectiveness. 2080
hours/year = 1.0 FTE
ALL CORRECT ANSWERS.
For Profit Organizations - Answer Can lawfully release a patient who does not have the ability to pay for
services (after EMTALA). Serve lower income populations. Owned by investors or shareholders. Large
portion of budget allocated to marketing and advertising.
not-for-profit organizations - Answer Must treat all conditions or people regardless of insurance or
ability to pay. Considered charities by IRS. Do not pay federal or state/local property taxes. Obligation to
the community.
Medicare - Answer National Health Insurance program for people 65 and older, disabled, and any age
with ESRD.
Medicare A - Answer Covers inpatient hospital stays, some hospice and home health care, no monthly
premium
Medicare B - Answer Medical insurance, pays for doctor services and outpatient services, PT/OT
services. Monthly premium.
Medicare C - Answer Often called the advantage plan or choice plan. Includes A and B, most include D.
May offer dental, vision, and wellness
Medicare D - Answer Prescription drug coverage. Monthly premium. Available to everyone, must join
Medicare plan that includes part D
Medicaid - Answer A federal and state assistance program that pays for health care services for people
who cannot afford them. Low-income children, pregnant women, and elderly. Pays long term care.
Affordable Care Act - Answer An expansion of medicaid, most of employers must provide health
insurance, have insurance or face surtax, prevents rejection based on pre-existing condition. Also
referred to as "Obamacare", signed into law in 2010. Make affordable health insurance available to more
people.
,Payors - Answer Employers, government, insurance companies, people who pay for healthcare services
Charity Pay - Answer Healthcare system received no reimbursement for services
Health Maintenance Organization (HMO) - Answer an organization that provides comprehensive
medical care to subscribers for a fixed fee. Cost effective care focused on preventative care. Network,
group, staff and independent practice associations.
Preferred Provider Organization (PPO) - Answer Group of healthcare providers that provide services to
a specific group, often at a reduced rate. Cost is higher to use out of network provider. Help negotiate
cost of services between the providers and purchasers.
Diagnosis Related Group (DRGs) - Answer classifies patients by age, diagnosis, surgical procedure, and
other information with hundreds of different categories to predict the use of hospital resources,
including length of stay, resulting in a fixed payment amount
Prospective Payment Systems (PPS) - Answer Required facilities providing services to Medicare clients
to be reimbursed using a fixed-rate system and included monetary incentives to reduce the length of
hospital stays.
(Based on diagnosis-related group (DRG) categories)
Social Health Maintenance Organization (SHMO) - Answer special type of health plan that provides the
full range of Medicare benefits offered by standard Medicare HMOs, plus other services that include the
following: prescription drug and chronic care benefits, respite care, and short-term nursing home care;
homemaker, personal care services, and medical transportation; eyeglasses, hearing aids, and dental
benefits
Pay for Performance (P4P) - Answer performance-oriented incentives for hospitals and physicians to
improve the quality of patient healthcare. 4 quality measures - performance, outcomes, patient
satisfaction/experience, structures and technologies (EHR)
, Value Based Purchasing - Answer A pay for performance methodology used to reimburse hospitals
based on outcomes. Provided by Centers for Medicare and Medicaid Services. Incentive payments to
acute-care hospitals yearly based on total performance score (TPS)
Budget Cycle - Answer Includes development, monitoring, reporting, justifying and variance analysis.
Four types of budget - revenue, expense, capital, and operating
Revenue - Answer anticipated amount of income during the budget period
Expense - Answer salary and nonsalary, fixed costs (remain constant such as rental fees and contract
fees) and variable costs (fluctuate based on unit activity such as census and acuity)
Capital - Answer equipment and renovation expenses. lifespan of 1 year of greater. consider cost of
item, installation, shipping or delivery charges, service contracts. Amortization (assigning cost of asset
over its lifetime) Depreciation (expensing fixed assets annually)
Operating Budget - Answer Annual budget. Based on past years unit activity predicting for next year.
Revenues and expenses for fiscal year.
How to create operating budget - Answer Need productivity goals, patient days, workload (HHPD -
hours per patient day), HPPD/shift and staffing needs, non-productive hours, productive/non-productive
hours over time, non-labor costs. SALARY is number one expense.
Patient Days - Answer Total inpatient days for a year. Calculated by adding together the daily patient
census for 365 days. Daily census is typically the unit census at midnight.
Average Daily Census (ADC) - Answer total patient days/number of calendar days. Total patient days
=3875. # of calendar days = 365. 3875/365 = 10.6 ADC.
Full Time Equivalency (FTE) - Answer Established by the health care reform law to aid in determining
tax credits for employees. Utilized by employer to determine staffing needs and cost-effectiveness. 2080
hours/year = 1.0 FTE
