Questions and Answers of Health Care Finance

Define Gross Domestic Product(GDP).
If Medicare were to be included as a legitimate area of community benefit, what percentage of Dignity’s total expenses would be allocated to community benefit activities?
Why is Medicare not listed as a community benefit?
What is the total dollar amount of community benefit provided by Dignity Health?
What is the single largest area of community benefit provided by Dignity Health and what dollar amount of benefit was provided?
Develop a methodology for estimating financial benefits provided by not-for-profit healthcare firms.
Develop a methodology for estimating financial benefits received by not-for-profit healthcare firms.
Assess the relative community benefits provided by proprietary and not-for-profit hospitals.
Describe the elements of community benefit listed by key policy groups.
Describe the current basis for tax exemption of not-for-profit healthcare firms.
What are the four operational requirements for a § 501(c)(3) tax-exempt organization?
Discuss the various types of third-party payers.
Compare and contrast Medicare and Medicaid.
Describe how new payment models are blurring the distinction between payers and providers.
What federal law would be most implicated by CIO Tiffany Technophile’s proposal? Are there safeguards available to ensure that one or both of the proposals remain compliant with this federal law?
If SSRH implemented a policy that the hospital’s emergency department could not receive heart failure patients unless the patient had first contacted a CCI cardiologist, would EMTALA be implicated?
What suggestions would you have to improve SSRH’s corporate compliance program given that Devine’s proposal may never have been reviewed by legal counsel before going to the SSRH board?
Based on his legal concerns about the proposed restructuring, Bravo believes that SSRH would be on firmer legal ground if the relationship with CCI was limited to private pay patients only and if
If Bravo wanted to see for himself whether SSRH’s cardiovascular program was in fact at risk of being found out of compliance with Medicare’s conditions of participation, how should he go about
How has the ACA reshaped financial arrangements among hospitals, physicians, and other providers if Medicare makes a single payment for all care received by a beneficiary from 72 hours before
How much reliance should a CFO place upon a CEO’s assertion that a novel physician–hospital relationship has been approved by DHHS-OIG? How can a CFO be sure that a particular proposal is legally
Identify at least three federal statutes that may be implicated by the proposed restructuring of SSRH’s cardiovascular service line.
Be prepared to respond to a compliance audit or investigation, particularly when the subject of that inquiry includes financial records.
Identify the most common federal regulatory issues, such as fraud and abuse, Stark Law, HIPAA, EMTALA, and IRS requirements for tax-exempt organizations, as well as less common concerns that arise
Be aware of the most important aspects of the Patient Protection and Affordable Care Act of 2010 (Affordable Care Act, or ACA)1 as it relates to financial management in the post-reform environment.
Recognize when and how to involve legal counsel on a Medicare or Medicaid reimbursement issue or other financial matter that has regulatory compliance implications or would otherwise require you to
Identify the major components of a corporate compliance plan, including the establishment of internal controls relating to the finances of an organization.
Appreciate the consequences of failing to manage the finances of an HCO with regard for the complex and everchanging array of laws and regulations that are unique to this industry.
Understand how legal and regulatory issues shape and define good financial management of an HCO.
Your hospital is reviewing its DRG coding patterns for Medicare. It has focused on two DRGs: 640 (Misc disorders of nutrition, metabolism, fluids/electrolytes w MCC) and 641 (Misc disorders of
Discussions with a group of physicians regarding employment status of your hospital are taking place. If the physicians were employed by your hospital, they would be performing all surgical
Medicare currently reimburses hospitals for 65% of bad debts written off on Medicare patients, copayments, and deductibles. If a hospital had $1,000,000 in Medicare deductibles and copayments, what
Calculate the RBRVS rate for CPT 33426, repair of mitral valve for a physician in Chicago, Illinois. Assume the conversion factor is 40.7986. TABLE 3-14 provides relevant values to complete this
Using the data from Problem 1, calculate the impact of a 10% reduction in operating expenses, that is, down to$5,400,000, on the required revenue and rate structure. Discuss the implications of your
Depreciation expense is recognized as a reimbursable cost by a number of payers who pay prospective rates for operating costs. Would you prefer accelerated depreciation (sum of the year’s digits)
Teaching hospitals receive an additional payment to recognize the indirect costs of medical education. What rationale might be used to justify this extra payment?
Why is the accumulation of funded reserves for capital replacement more critical for nonprofit healthcare entities than for investor-owned healthcare facilities?
From the data in TABLE 3-13, determine the amount of revenue that needs to be generated to meet hospital financial requirements.
Describe how Medicare reimburses the major types of providers, and discuss the implications of these methods for an organization’s resource management.
Discuss the major aspects of Medicare benefits.
Discuss the major reimbursement methods used in health care.
Describe the financial environment of the largest segments of the healthcare industry.
Describe factors that influence the financial viability of a healthcare organization.
The Medicare intermediary has returned a claim to a hospital because of OCE violation #1: invalid diagnosis code.This would imply that the procedure performed is not supported by the diagnosis code.
A payer may delay or deny payment because of inaccurate or missing information in a submitted claim. Many contracts require payment within a specified period of time (e.g., 30 days) from submission
Many DRGs are in “families” that differ by severity. There are three levels of severity: (1) MCC—Major Complication/Comorbidity, which reflects the highest level of severity; (2)
Including an HCPCS/CPT code directly in the charge master is called what?
From what types of coding information must the following codes be derived:• H00.11, Chalazion right upper eyelid• 0D160ZA, Open gastric bypass surgery to jejunum• 69090 Ear Piercing• G0283
Elective procedures often require prior approval from the patient’s insurance company. What is this approval process often called?
A hospital submitting an outpatient claim would use a UB-04 claim form. What source of coding information is used to report diagnosis codes? What source of coding information is used to report
Appreciate the role of claims editing in the bill submission process.
Define the two major bill types used in healthcare firms.
Define the basic characteristics of charge masters.
Understand the role of coding information in healthcare organizations in claim generation.
Describe the revenue cycle for healthcare firms.
What type of financial information should be routinely provided to board members?
Your hospital has been approached by a major employer in your market area to negotiate a preferred provider arrangement. The employer is seeking a 25% discount from your current charges. Describe a
Only in recent years have hospitals begun to develop meaningful systems of cost accounting. Why did they not begin such development sooner?
Determining the compliance of operation with directives
Assessing the effectiveness of operations
Assessing the efficiency of operations
Evaluating stewardship within an entity
Evaluating the financial condition of an entity
Discuss the common ownership forms of healthcare organizations, along with their advantages and disadvantages.
Describe the financial functions within an organization.
List the users of financial information and their uses for it.
Discuss the uses of financial information.
Describe the importance of financial information in healthcare organizations.
Do you get a chance to review financial statements at your place of work? Would you like to? Why?LO.1
Are you familiar with the current maturity of long-term debt? What example of it can you give in your own life (either at work or at home)?LO.1
Does the concept of revenue less expense equaling an increase in equity or fund balance make sense to you? If not, why not?LO.1
Can you give an example of an asset? A liability?LO.1
Did the current year result in an excess of revenue over expense? Is it as much as the prior year?LO.1
Are there unusual nonoperating gains or losses?LO.1
Did income from operations increase, decrease, or stay about the same?LO.1
Did total operating expenses increase, decrease, or stay about the same? Is any particular line item unusually large or small?LO.1
Did total operating revenue increase over the prior year?LO.1
Are there large discrepancies in balances between the prior year operations and the current year operations?LO.1
Is it one year or a shorter period? If it is a shorter period, why is that?LO.1
What is the period reported on the statement of revenue and expense?LO.1
Did long-term debt increase or decrease significantly over the prior year?LO.1
Did land, plant, and equipment increase or decrease significantly over the prior year?LO.1
Did current liabilities increase, decrease, or stay about the same?LO.1
Did current assets increase, decrease, or stay about the same?LO.1
Did total assets increase over the prior year?LO.1
Are there large discrepancies in balances between the prior year and the current year?LO.1
What is the date on the balance sheet?LO.1
Know what a subsidiary report is.LO.1
Understand the basic concept of cash flows.LO.1
Review a statement of revenue and expense and understand its components.LO.1
Review a balance sheet and understand its components.LO.1
If not, do you believe it should? What do you believe the benefits would be?LO.1
Does your organization report time as “productive” and “nonproductive”?LO.1
If so, do you use a computerized program?LO.1
Are you or your immediate supervisor responsible for staffing?LO.1
Tie cost to staffing.LO.1
Understand computing fulltime equivalents to fill a scheduled position.LO.1
Understand computing fulltime equivalents to annualize staff positions.LO.1
Understand the difference between productive time and nonproductive time.LO.1
Have you ever had to compute depreciation expense? If so, please describe the circumstances.LO.1

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