HEALTH CARE ACCOUNTING

Question 7(1 point)

Which of the following measures is not used directly as one of the means of determining the reasonableness of a hospitals charges?

Question 7 options:

A)

return on investment (ROI)

B)

costs

C)

investment level

D)

prices of peer hospitals

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Question 8(1 point)

What contract provision will best protect a hospital being paid on a DRG basis for inpatient services from a catastrophic patient?

Question 8 options:

A)

Most favored nation clause

B)

Stop loss provision

C)

Rate increase limit

D)

None of the above

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Question 9(1 point)

Suppose that HCA and Tenet were to merge. Ignoring potential antitrust problems, this merger would be classified as a:

Question 9 options:

A)

Cross-border merger

B)

Horizontal merger

C)

Conglomerate merger

D)

Vertical merger

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Question 10(1 point)

The following reasons are good motives for mergers except:

Question 10 options:

A)

Economies of scale

B)

Increased purchasing power

C)

Increased value for acquiring companys shareholders

D)

Unused tax shields

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Question 11(1 point)

If the total book value of the assets of the accounting entity is $4,350,000, and the total liabilities of the accounting entity are $1,235,000, the stockholder's equity in the accounting entity is:

Question 11 options:

A)

$5,585,000

B)

$3,115,000

C)

$2,470,000

D)

None of the Above

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Question 12(1 point)

If an organizations Board of Directors were to set aside assets to be used for replacement of plant and equipment, where would this be reflected on the balance sheet?

Question 12 options:

A)

Assets Limited as to Use

B)

Temporarily Restricted Net Assets

C)

Permanently Restricted Net Assets

D)

Liability

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Question 13(1 point)

Which of the following reflects the fundamental accounting equation (or balance sheet equation) in a not-for-profit, business-oriented healthcare organization?

Question 13 options:

A)

Equity = Liabilities + Assets

B)

Assets = Long-term Debt + Equity

C)

Assets = Liabilities + Net Assets

D)

Net Assets = Liabilities + Assets

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Question 14(1 point)

Which of the following best describes days in accounts receivable?

Question 14 options:

A)

a profitability ratio that measures how quickly an organization generates revenue

B)

a liquidity ratio that estimates how quickly an organization converts receivables to cash

C)

a liquidity ratio that measures how long it takes an organization to pay its bills

D)

a profitability ratio that evaluates credit and collection policies

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Question 15(1 point)

The _____ is a way for organizations to improve the collection and communication of financial and operating information.

Question 15 options:

A)

Performance dashboard

B)

Financial bottom-line

C)

Holistic perspective

D)

Performance perspective

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reasonableness of a hospitals charges?

Question 7 options:

A)

return on investment (ROI)

B)

costs

C)

investment level

D)

prices of peer hospitals

16(1 point)

An HMO has just proposed an offer to promote your facility as the region's Center of Excellence for obstetrical deliveries. The HMO covers 700,000 lives in the community served by your facility. The HMO has provided the following information for your consideration: the hospital cost for a normal uncomplicated delivery is $1,800 and for a complicated cesarean delivery is $3,500. Furthermore, the annual rate per 100,000 lives for a normal uncomplicated delivery is 6.0 while for a complicated Cesarean delivery is 1.5. The HMO proposes a capitated per member per month (PMPM) premium to the hospital to provide obstetrical services to their members. What would the break-even premium be?

Question 16 options:

A)

$0.01783 PMPM

B)

$0.01830 PMPM

C)

$0.01336 PMPM

D)

$0.016050 PMPM

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Question 17(1 point)

Calculate the breakeven price from the following information.

quantity of services = $3,000

fixed costs = $45,000

average cost per unit = $150.00

required profit = $30,000

Question 17 options:

A)

$175.00

B)

$300.00

C)

$160.00

D)

$310.00

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Question 18(1 point)

When considering how changes in volume affect total fixed costs, it is important to consider:

Question 18 options:

A)

the relevant range

B)

the variable cost per unit

C)

price

D)

All of the Above

Which of the following is the first step in any budgetary process?

Question 19 options:

A)

Define standard treatment protocols

B)

Define required departmental volumes

C)

Define standard cost profiles

D)

Define volumes of patients