MHA 706 MIDTERM - LORD

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MHA 706 MIDTERM - LORD

UPDATED ACTUAL EXAM WITH

CORRECT SOLUTIONS.

Proprietorships & Partnerships: Pros & Cons - correct answer-

Pros: Ease of Information, Subject to a few regulations, no

corporation income taxes.

Cons: Limited life, difficult to transfer, unlimited life, difficult to

raise capital.

Corporations: Pros & Cons - correct answer- Pros: Unlimited life, easy transfer of ownership, limited liability, ease of raising capital.

Cons: Cost of formation and reporting, double or triple taxes

must be paid.

Non-profit Organization - correct answer- Exempt from taxes.Goal is to improve community.

For-profit Organizations - correct answer- (Investor Owned) Goal is to maximize shareholder return. Owe taxes.

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Agency Problem - correct answer- the possibility of conflict of interest between the stockholders and management of a firm.

Example: Hire someone to carry out a job function, but they go

out of their interests instead of best interests of company/organization.

Third-party payor system in the US (i.e. private vs public) -

correct answer- Private: Blue Cross Blue Shield, Commercial

Insurers, Self-Insurers. (AETNA)

Public: Medicare and Medicaid-both offer services to different

levels. "Safety net" Lowest reimbursement rates.

Reimbursement methods (fee-for-service vs. capitation) -

correct answer- Fee for Service: payment is tied to amount of

services provided. (Decades ago) *Dental industry*

Capitation: payment is tied to the size of the covered population

(number of enrollees) Payment is based on per # per month.*Decreasing utilization* Population is healthier.

Medicare reimbursement for different types of providers - correct answer- Medicare parts A, B & C.

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Medicare Part A (aka Hospital Insurance or HI) - correct answer- Provides hospital insurance automatically at age 65 (if FICA qualified) at no fee but may have deductible & co-pay.

Medicare Part B - correct answer- The part of the Medicare program that pays for physician services, outpatient hospital services, durable medical equipment, and other services and supplies.

Medicare Part C (Medicare Advantage) - correct answer- •Replaces and covers expenses found in Part A and B •Medicare private fee-for-service plans (PFFS) •Medicare managed care plans (HMOs and PPOs) •Medicare specialty plans

Medicare—Part D Prescription Drug Coverage - correct answer- a United States federal-government program to subsidize the costs of prescription drugs and prescription drug insurance premiums for Medicare beneficiaries.

Impact of the Affordable Care Act (what the bill changed about the healthcare environment) - correct answer- Created new

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