NEBC EXAM QUESTIONS AND
ANSWERS
For Profit Organizations - Correct Answers -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 - Correct Answers -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 - Correct Answers -National Health Insurance program for people 65 and
older, disabled, and any age with ESRD.
Medicare A - Correct Answers -Covers inpatient hospital stays, some hospice and home
health care, no monthly premium
Medicare B - Correct Answers -Medical insurance, pays for doctor services and
outpatient services, PT/OT services. Monthly premium.
Medicare C - Correct Answers -Often called the advantage plan or choice plan. Includes
A and B, most include D. May offer dental, vision, and wellness
Medicare D - Correct Answers -Prescription drug coverage. Monthly premium. Available
to everyone, must join Medicare plan that includes part D
Medicaid - Correct Answers -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 - Correct Answers -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 - Correct Answers -Employers, government, insurance companies, people who
pay for healthcare services
Charity Pay - Correct Answers -Healthcare system received no reimbursement for
services
Health Maintenance Organization (HMO) - Correct Answers -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) - Correct Answers -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) - Correct Answers -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) - Correct Answers -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) - Correct Answers -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) - Correct Answers -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 - Correct Answers -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 - Correct Answers -Includes development, monitoring, reporting, justifying
and variance analysis. Four types of budget - revenue, expense, capital, and operating
, Revenue - Correct Answers -anticipated amount of income during the budget period
Expense - Correct Answers -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 - Correct Answers -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 - Correct Answers -Annual budget. Based on past years unit activity
predicting for next year. Revenues and expenses for fiscal year.
How to create operating budget - Correct Answers -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 - Correct Answers -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) - Correct Answers -total patient days/number of calendar
days. Total patient days =3875. # of calendar days = 365. 3875/365 = 10.6 ADC.
Full Time Equivalency (FTE) - Correct Answers -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
Hours Per Patient Day (HPPD) - Correct Answers -Calculates the amount of nursing
care necessary per patient in a 24-hour period. Total productive hours/Total volume
(ADC). 8-hour shifts, 5 RNs, 1 LVN, 1 CNA and ADC of 28. 7 staff x 8 hours = 56 hours
per shift. 56 hours x 3 shifts = 168 hours per day. 168/28 = 6 HPPD
Non-Productive Time - Correct Answers -varies by benefit package at each
organization. Average is 12-20%. Calculate non-productive time. FTE = 2080 hours
annually. 20% benefit time. 2080 x 0.8 = 1664 hours of productive time for patient care.
How many FTEs are needed to appropriately staff this unit? - Correct Answers -ADC =
10.
Non-productive time is 12%.
HPPD = 15.
Calculate productive time per day 15x10=150.
ANSWERS
For Profit Organizations - Correct Answers -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 - Correct Answers -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 - Correct Answers -National Health Insurance program for people 65 and
older, disabled, and any age with ESRD.
Medicare A - Correct Answers -Covers inpatient hospital stays, some hospice and home
health care, no monthly premium
Medicare B - Correct Answers -Medical insurance, pays for doctor services and
outpatient services, PT/OT services. Monthly premium.
Medicare C - Correct Answers -Often called the advantage plan or choice plan. Includes
A and B, most include D. May offer dental, vision, and wellness
Medicare D - Correct Answers -Prescription drug coverage. Monthly premium. Available
to everyone, must join Medicare plan that includes part D
Medicaid - Correct Answers -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 - Correct Answers -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 - Correct Answers -Employers, government, insurance companies, people who
pay for healthcare services
Charity Pay - Correct Answers -Healthcare system received no reimbursement for
services
Health Maintenance Organization (HMO) - Correct Answers -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) - Correct Answers -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) - Correct Answers -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) - Correct Answers -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) - Correct Answers -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) - Correct Answers -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 - Correct Answers -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 - Correct Answers -Includes development, monitoring, reporting, justifying
and variance analysis. Four types of budget - revenue, expense, capital, and operating
, Revenue - Correct Answers -anticipated amount of income during the budget period
Expense - Correct Answers -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 - Correct Answers -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 - Correct Answers -Annual budget. Based on past years unit activity
predicting for next year. Revenues and expenses for fiscal year.
How to create operating budget - Correct Answers -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 - Correct Answers -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) - Correct Answers -total patient days/number of calendar
days. Total patient days =3875. # of calendar days = 365. 3875/365 = 10.6 ADC.
Full Time Equivalency (FTE) - Correct Answers -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
Hours Per Patient Day (HPPD) - Correct Answers -Calculates the amount of nursing
care necessary per patient in a 24-hour period. Total productive hours/Total volume
(ADC). 8-hour shifts, 5 RNs, 1 LVN, 1 CNA and ADC of 28. 7 staff x 8 hours = 56 hours
per shift. 56 hours x 3 shifts = 168 hours per day. 168/28 = 6 HPPD
Non-Productive Time - Correct Answers -varies by benefit package at each
organization. Average is 12-20%. Calculate non-productive time. FTE = 2080 hours
annually. 20% benefit time. 2080 x 0.8 = 1664 hours of productive time for patient care.
How many FTEs are needed to appropriately staff this unit? - Correct Answers -ADC =
10.
Non-productive time is 12%.
HPPD = 15.
Calculate productive time per day 15x10=150.
