Deck 6: Financial Management

Question 1

The 82-year-old patient presented in the physician's office for a routine physical examination. He gave the receptionist two cards, evidencing his primary, government-funded insurance plan that pays for most of the bill and an additional, private plan that covers the remaining charges. The patient's secondary insurance is called:

A) TRICARE.
B) supplemental.
C) Medicare.
D) capitation.

Answer 1

supplemental.

Question 2

The physician charged the patient $75 for an office visit. The patient paid the physician $15 and the patient's insurance company paid the physician $60. The patient's portion of the payment is called a:

A) premium.
B) deductible.
C) coinsurance.
D) copayment.

Answer 2

copayment.

Question 3

Which is a way the Affordable Care Act aimed to lower health insurance premiums?

A) increasing the number of healthier covered lives in the risk pool
B) underwriting individuals based on biometrics and health status
C) allowing insurance to be sold across state lines
D) requiring insurance companies to cover pre-existing conditions

Answer 3

increasing the number of healthier covered lives in the risk pool

Question 4

Some employers offer a ____________________ toward which employees can contribute money tax-free, which may then be used for health care and child care expenses.

A) indemnity plan
B) flexible spending account (FSA)
C) minimum essential coverage plan
D) health maintenance organization (HMO) $\degree$

Question 5

Before his insurer will pay for a visit to a dermatologist, it requires Mr. Akers to visit his primary care provider (PCP) and obtain a referral to an in-network dermatologist. Mr. Akers' insurance plan is most likely a(n):

A) indemnity plan.
B) preferred provider organization
C) Medicare wraparound policy
D) health maintenance organization (HMO) $\degree$

Question 6

Which payment model features unlimited access to an independent primary care physician in exchange for a monthly fee?

A) concierge medicine
B) preferred provider organization
C) health sharing plan
D) Medicaid

Question 7

In the ________________, the organization owns the facilities, employs the physicians, and provides essentially all health care services.

A) staff model health maintenance organization (HMO)
B) preferred provider organization (PPO)
C) indemnity company
D) health sharing plan

Question 8

Medicare claims are processed by:

A) the Centers for Medicare and Medicaid Services (CMS)
B) Quality Improvement Organizations (QIOs)
C) Medicare Administrative Contractors (MACs)
D) individual states

Question 9

Which of the following is NOT a way in which managed care organizations may influence and/or control the patient's choices in selecting health care services?

A) The patient must select a primary care provider.
B) Only approved services are reimbursed.
C) The managed care organization decides what services are "medically necessary."
D) The managed care organization only pays for primary care services.

Question 10

How did the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 change health care reimbursement?

A) it required insurers to cover dependents of subscribers up to age 26
B) it offered tax breaks to employers who offered health insurance coverage
C) it required Medicare to adopt a prospective payment system (PPS) for inpatients
D) it required emergency department to treat all patients regardless of their ability to pay

Question 11

A contractor who manages health care claims for Medicare is a:

A) Blue Cross/Blue Shield organization.
B) Medicare Administrative Contractor (MAC)
C) preferred provider organization (PPO).
D) recovery audit contractor (RAC).

Question 12

What is the fixed amount a health insurance policyholder pays each month?

A) deductible
B) coinsurance
C) copay
D) premium

Question 13

When is a claim usually submitted?

A) during the patient's visit or stay
B) after treatment
C) once a month
D) after the admitting diagnosis is assigned

Question 14

Which type of health insurance is obtained through an employer?

A) group plan
B) indemnity plan
C) Marketplace plan
D) health maintenance organization (HMO) plan

Question 15

A family pays a monthly premium of $1,000 for a health insurance plan with a $2,000 deductible, a 10% coinsurance for inpatient stays, and a yearly out-of-pocket maximum for $6,000 per family member. The first medical event of the year was a family member having gallbladder surgery, which was a covered procedure. The charges from the hospital are $26,000, the charges from the surgeon are $1,500, and the charges from the anesthesiologist are $900. For what amount will the family pay out-of-pocket?

A) $6,000
B) $1,000
C) $4,600
D) $2,000

Question 16

Which part of Medicare covers hospital, nursing home, and home health visits?

A) Part A
B) Part B
C) Part C
D) Part D

Question 17

Which program pays for the care of a veteran's spouse and dependents?

A) CHAMPVA
B) TRICARE
C) VHA
D) TEFRA

Question 18

A health plan will have lower monthly premiums if

A) the risk pool is smaller
B) the people in the risk pool are older
C) the deductible and co-insurance is higher
D) the network is larger

Question 19

A woman visits her nurse practitioner (NP) for sciatic nerve pain, called sciatica. After an examination, the provider recommends stretching exercises and prescribes ibuprofen, an NSAID. A few weeks later the woman receives an EOB from her insurance company denying coverage of the visit. She subsequently received a bill from the NP in the amount of $146.00. What is this amount called?

A) the copayment
B) the coinsurance
C) the charges
D) the cost

Question 20

A managed care insurer negotiates with a provider to pay 11% less than the provider's standard charge for a certain service. This reimbursement methodology is called:

A) discounted fee for service.
B) fee for service.
C) a prospective payment system.
D) capitation.

Question 21

Which statement is true about the Resident Assessment Instrument (RAI), used to collect data in skilled nursing facilities (SNFs)?

A) It is only performed at the end of a patient's stay.
B) It contains less data than either the uniform hospital discharge data set (UHDDS) or the uniform ambulatory care data set (UACDS).
C) It is used to populate the Minimum Data Set (MDS 3.0).
D) It is also used in behavioral health facilities.

Question 22

The term for the demands and costs associated with treating specific types of patients is

A) fees
B) charges
C) resource intensity
D) medical severity

Question 23

When hospitals began to be reimbursed based on diagnosis-related groups, the average patient length of stay decreased. Why?

A) Coding became timelier and more accurate.
B) A PPS implies a financial incentive to discharge patients sooner.
C) More patients were admitted with illnesses that did not require long stays.
D) Diagnoses became more accurate and therefore patients could be treated more quickly.

Question 24

A patient was admitted to an acute care facility for alcoholic liver disease. The patient stayed in the facility for 10 days. The actual charges incurred were $21,821. The PPS rate is $6,487.12. The per diem rate is $672.24 per day. For this case, Medicare will most likely pay:

A) $21,821.00.
B) $6,487.12.
C) $6, 722.40.
D) $672.24.

Question 25

What is the conceptual basis for the prospective payment system (PPS)?

A) certain diagnoses and procedures consume similar resources and warrant similar reimbursement
B) accurate reimbursement is best determined after services are rendered
C) physicians require payment before services can be rendered
D) monies are more efficiently spent when patients are treated on a case-by-case basis

Question 26

Which statement is a common criticism of the prospective payment system?

A) "The PPS makes it more difficult to treat patients on an individualized basis."
B) "The PPS makes it harder to budget."
C) "The PPS promotes inefficiencies among physicians."
D) "The PPS has disincentives for keeping costs down."

Question 27

The Medicare patient presented to the emergency department with chest pain and shortness of breath. The patient was treated and released. The emergency department charges were $430. The APC amount was $250. Two days later, the patient returned to the emergency department with congestive heart failure and was admitted to the hospital. The length of stay for the admission was 2 days. The inpatient charges were $4,700. The DRG amount was $3,500. What is the expected reimbursement for these visits?

A) $3,500.
B) $3,750.
C) $4,700.
D) $5,130.

Question 28

A hospital's case mix index is derived by:

A) organizing each DRG by rank, with the patients in the most frequently occurring DRG listed as 1, and so forth.
B) computing the average relative weight of all the cases discharged in a given period.
C) the cost of living, regional labor costs, and graduate medical education in the area.
D) the sum of gross revenue divided by the number of discharges for a time period.

Question 29

DRG 380 has a relative weight of 0.5143, while DRG 401 has a relative weight of 1.2343. From this information, which statement is true?

A) It takes more resources to treat DRG 380.
B) DRG 380 is being treated in a teaching hospital, or its labor costs are higher.
C) DRG 401 is being treated in a teaching hospital, or its labor costs are higher.
D) It takes more resources to treat DRG 401.

Question 30

DRG 299 has a relative weight of 0.5000. If Hospital A has a blended rate of $5000, how much money will the hospital receive for a case assigned to DRG 299?

A) $5,000
B) $299
C) $25,000
D) $2,500

Question 31

The hospital discharged 299 patients in February with a combined relative weight for all patients of 349.3522. What is the case mix index for February?

A) 148.3522
B) 0.8559
C) 1.1684
D) 104,456.3078

Question 32

What is the average reimbursement per patient for the facility in a month with a CMI of 1.1000 and a blended rate for $4,500?

A) $4,091
B) $4,500
C) $4,950
D) $5,600

Question 33

All of the following statements about ambulatory payment classifications (APCs) are true, EXCEPT:

A) patients may be assigned to more than one APC for an encounter.
B) APC assignment is based on ICD-10-PCS procedure codes.
C) there are approximately 2,000 APCs.
D) APCs apply only to ambulatory care.

Question 34

The basis for payment for skilled nursing facility (SNF) services for Medicare patients is:

A) resource utilization groups (RUGs).
B) the resource-based relative value system (RBRVS).
C) the Minimum Data Set (MDS).
D) all-payer diagnosis resource groups (AP-DRGs).

Question 35

Which data element is collected differently on the CMS-1500 than on the UB-04?

A) Race
B) Diagnosis code
C) Reason for visit
D) Total charges

Question 36

The HIM department is allowed $250 per month for supplies. At the end of the third quarter, the department has spent $3,000 on supplies. This means that the HIM department is:

A) under budget YTD by $750.
B) over budget YTD by $2,750.
C) exactly as it should be on budget for supplies.
D) over budget by $750.

Question 37

What might explain a positive variance in budgeted salary expenses?

A) Salaries were frozen as planned.
B) An employee resigned and was not replaced.
C) There were merit raises.
D) Additional employees were hired to support a new service.

Question 38

Which accounting method recognizes additions of money when it is earned and subtractions of money when expenses are incurred, regardless of when the funds enter or leave the bank accounts?

A) accrual basis
B) cash basis
C) capital basis
D) balance basis

Question 39

A not-for-profit children's hospital has $100 million dollars in property, cash, inventory and monies it expects to receive. It has $50 million in debt. What is the term on the balance sheet for the $50 million in debt?

A) assets
B) liabilities
C) revenue
D) profit

Question 40

A not-for-profit children's hospital has $100 million dollars in property, cash, inventory and monies it expects to receive. It has $50 million in debt. What is the hospital's fund balance?

A) $1M
B) $50M
C) $100M
D) $150M

Question 41

A(n) __________________ is a summary of revenue and expense activity over a period.

A) balance sheet
B) budget
C) income statement
D) statement of change in financial position

Question 42

Large purchases that are expected to last for years are included in the _____________ budget.

A) capital
B) cash
C) operational
D) strategic

Question 43

A new computer costs $5,000 and is expected to save $500 per month in employee time because of its speed. It has an expected life of 3 years. What is the payback period for the computer?

A) 10 months
B) 1 year
C) 2 years
D) 3 years

Question 44

A new computer costs $5,000 and is expected to save $500 per month in employee time because of its speed. It has an expected life of 3 years. How much of the equipment cost is recovered per year?

A) 10%
B) 33%
C) 80%
D) 120%

Question 45

A new computer costs $5,000 and is expected to save $500 per month in employee time because of its speed. It has an expected life of 3 years. Using straight-line depreciation, how much is the computer worth at the beginning of the second year?

A) $500
B) $4,500
C) $3,333.34
D) $1,666.66

Question 46

How are variable expenses estimated in the operational budget?

A) by examining prior year activities and anticipating changes
B) by planning for capital expenses
C) by depreciating the prior year's assets
D) by totaling the payroll for the prior year and budgeting a % increase for raises

Question 47

Brett makes $60,000/year before getting a 3% raise in July. How much should the department manager budget for Brett's monthly salary from July through December?

A) $5,000
B) $5,150
C) $1,800
D) $6,180

Question 48

Two types of managed care organizations are health maintenance organizations and _________ provider organizations.

Question 49

______________ is a formal system of providing funding for health care for low-income populations.

Question 50

Federal health care for individuals with certain disabilities or with end-stage renal disease requiring dialysis or kidney transplantation is offered under the _________________ program.

Question 51

Paired with a high deductible health plan, a(n) _______________ account allows individuals to set aside funds for health expenses on a pre-tax basis.

Question 52

Medicare and Medicaid are called _____________ programs because eligibility for these programs is automatic, being based on age, condition, or employment status.

Question 53

The primary care system where a PCP limits access to other parts of the health care delivery system is called a ______________ model.

Question 54

A(n) _______________ assumes the risk of paying some or all of the cost of providing health care services in return for the payment of a premium.

Question 55

Co-______________ is a type of cost-sharing reduction in which an individual is responsible for a percentage of the amount owed to the provider.

Question 56

In the reimbursement methodology called ________________ payment, the amount of reimbursement is based on DRGs, a collection of health care descriptions organized into statistically similar categories.

Question 57

The Outpatient Prospective Payment System (OPPS) uses _______________ (APCs) to reimburse for Medicare outpatient services.