MHA 706 FINANCIAL MANAGEMENT MIDTERM

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MHA 706 FINANCIAL MANAGEMENT MIDTERM

EXAM AND STUDY GUIDE NEWEST

ACTUAL EXAM 200 QUESTIONS AND CORRECT

DETAILED ANSWERS (VERIFIED ANSWERS )

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Which of the following statements about finance accounting, and financial management is most correct? - ANSWER- Financial management provides the theory, concepts, and tools necessary to help managers make better financial decisions.

External reporting - ANSWER- What is a DISADVANTAGE of being a corporation?

Facilities management - ANSWER- Which of the following are not finance activities?

What is NOT a advantage of proprietorship? - ANSWER- Unlimited liability

A not-for-profit corporation can also be called a 529(b). - ANSWER- False

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The primary goal of investor-owned corporations is shareholder wealth maximization. - ANSWER- True

Copayments - ANSWER- The fixed amount for a covered service that the insurer mandates that the patient pay to the provider before the patient receives service from the provider.

Coinsurance - ANSWER- Requires an individual to pay for a certain percentage of the eligible medical expenses.

Adverse selection - ANSWER- Individuals at greater risk of needing health care are more likely to purchase insurance.

Deductibles - ANSWER- The amount that must be paid out of pocket by the policyholder before an insurance provider will pay any expenses.

Moral hazard - ANSWER- The risk of overuse of health services because the insured does not bear the full cost of the consequences.

Medicare Part B - ANSWER- Covers physician services, ambulatory surgical services, outpatient services, and certain other miscellaneous services. 2 / 4

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Medicare Part A - ANSWER- Covers hospital and some skilled nursing coverage

Medicare Part D - ANSWER- Covers prescription drugs

Medicare Part C - ANSWER- Is often called Medicare Advantage

Charge-Based - ANSWER- Payers pay based off of pre- determined "chargemaster." These payments are usually discounted up to 20% to 50%.

Cost-Based - ANSWER- Providers were reimbursed for "actual" costs.

Capitation - ANSWER- Payment is (usually) made on a per member per month basis

Prospective Payment - ANSWER- Are use to pay for either a predefined procedure, diagnosis, per diem or bundled service

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Has potential to result in 'gamesmanship that can inflate healthcare charges - ANSWER- Charge-Based

May result in up-coding - ANSWER- Prospective Payment

No incentive to control costs - ANSWER- Cost-Based

Providers may have an incentive to reduce utilization - ANSWER- Capitation

Under the broad category of fee-for-service (FFS), what are the three main types of fee-for-service methodologies that were discussed in class? - ANSWER- -Cost-Based -Charge-Based -Prospective Payments

Select all of the TRUE statements about ICD Codes. - ANSWER- -The greater the number of digits in the code, the more detailed the disease.-The codes currently consist of 3, 4, 5, 6, or 7 digits/characters -ICD- stands for International Classification of Diseases -ICD-10 is the current standard

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