Chapters 19 and 7

"Piercing the corporate veil" enables the owners of a corporation to be shielded from liability for wrongdoing committed through the corporation.

False

A breach of contract judgment always requires monetary compensation.

False

A healthcare organization may not form as a partnership.

False

A not-for-profit corporation is prohibited from making money.

False

Antitrust claims are valid only if they relate to an entire group of individuals who have been denied privileges at a healthcare organization.

False

Antitrust violations are generally governed by individual state laws.

False

Courts uphold all noncompete agreements in order to protect the livelihood of organizations that have had an employee or a contractor leave for other opportunities.

False

Economic credentialing is the granting of medical staff privileges based on quality of care indicators.

False

If a practitioner is assigned a medical staff category of "associate," he or she can chair the medical staff executive committee.

False

Joint ventures to offer specialized services will often be challenged as antitrust violations.

False

The executive committee of the medical staff does not have to follow the medical staff bylaws.

False

The medical staff has the ultimate responsibility for the quality and financial well-being of the health organization.

False

To be valid, a contract must be in writing.

False

A hold harmless clause may provide for compensation by one individual to another.

True

An acceptance of an offer reflects a meeting of the minds regarding the contract terms.

True

Bylaws should include a mechanism to request and hold a fair hearing in the event a physician wishes to challenge an adverse decision.

True

Fiduciary duty includes the duty of loyalty and the duty of responsibility.

True

Governing body members are protected from personal liability associated with the decisions they make on behalf of the corporation

True

Medical staff bylaws are considered a contract and are legally binding in most states

True

Mistake of fact is a potential defense for nonperformance of a contract.

True

The Federal Trade Commission allows hospitals to offer misleading prices on their services in order to be competitive with others in their geographic area.

True

The Sherman Act is the oldest of the three major federal antitrust statutes.

True

The classification of medical staff membership impacts a provider's ability to admit patients to a healthcare facility.

True

The number of procedures performed by a provider may be linked to clinical performance and quality issues when determining medical staff privileges.

True

There are nine safety zones in healthcare that the federal government will generally not challenge as antitrust violations.

True

Which of the following describes a responsibility of corporation's governing board members? (Bloom's Level: 3) a. Appointing medical staff members b. Operating the corporation on a day-to-day basis c. Serving as agents of the corporation d. Becoming employees of the corporation

a. Appointing medical staff members

A physician has been found to have breached his contract with a patient through abandonment. As a remedy, the court may order __________. (Bloom's Level: 3) a. Compensatory damages b. Boilerplate c. A warranty d. All of the above

a. Compensatory damages

Ultra vires acts are those that __________. (Bloom's Level: 2) a. Exceed a corporation's powers b. Are within a corporation's powers c. Bolster a corporation financially d. Cause a corporation to suffer financially

a. Exceed a corporation's powers

Which of the following is not a federal antitrust law? (Bloom's Level: 2) a. HIPAA b. Sherman Act c. Clayton Act d. Federal Trade Commission Act

a. HIPAA

Which of the following statements is not true regarding the National Practitioner Data Bank? a. It discloses information related to the professional competence of physicians, dentists, and other healthcare practitioners based on authorization from practitioner. b. A healthcare organization must query the databank every two years for all providers on staff. c. It receives information related to the professional competence of physicians, dentists, and other healthcare practitioners. d. A healthcare organization queries the databank as part of its credentialing process.

a. It discloses information related to the professional competence of physicians, dentists, and other healthcare practitioners based on authorization from practitioner.

Noncompete agreements __________. (Bloom's Level: 3) a. Might violate antitrust law b. Represent a horizontal restraint of trade c. Are exculpatory contracts d. Are invalid if they are not in writing

a. Might violate antitrust law

Which group recommends review criteria for medical staff membership? Bloom's Level: 2 a. National Association of Medical Staff Services (NAMSS) b. Accreditation Board of Medical Specialties (ABMS) c. National Committee on Quality Assurance (NCQA) d. Comprehensive Accreditation Manual for Hospitals (CAMH)

a. National Association of Medical Staff Services (NAMSS)

Which of the following offers both civil and criminal penalties? (Bloom's Level: 1) a. Sherman Act b. Clayton Act c. Federal Trade Commission Act d. None of the above

a. Sherman Act

Bylaws __________. (Bloom's Level: 1) Bloom's: Level 1 a. are the internal rules of an organization. b. are the regulations of government agencies. c. cannot be modified once they are created. d. are none of the above

a. are the internal rules of an organization.

General Hospital is a 1000-bed facility. Mercy Hospital is a 100-bed hospital. They join to form one corporation, which is named General Hospital. The restructuring that has most likely occurred is a _____. (Bloom's Level: 3) a. Merger b. Acquisition c. Consolidation d. None of the above

b. Acquisition

Which of the following is an artificial being created per state statutory authority? (Bloom's Level: 2) a. Sole proprietorship b. Corporation c. Joint venture d. Limited partnership

b. Corporation

"Piercing the corporate veil" refers to __________. (Bloom's Level: 2) a. Allowing owners to realize additional profits b. Holding corporation owners liable for bad acts c. Disclosing corporate secrets to the media d. Allowing a corporation to be taxed

b. Holding corporation owners liable for bad acts

In the "learned intermediary" defense used by HIT vendors, who is the learned intermediary? (Bloom's Level: 2) a. HIT vendor b. Physician c. Nursing staff d. Facility end-user

b. Physician

What classification of medical staff membership denies admitting privileges but recognizes the contributions and reputations of its members? a. active b. honorary c. courtesy d. affiliate

b. honorary

Which of the following govern(s) the operation of a hospital medical staff? a. medical staff classification b. medical staff bylaws c. medical staff credentialing d. medical staff committees

b. medical staff bylaws

Procedural due process includes which of the following elements? a. reasonable and non-arbitrary laws b. notice and an opportunity to be heard c. state action d. none of the above

b. notice and an opportunity to be heard

Fiduciary duty includes __________. (Bloom's Level: 2) a. Duty of loyalty b. Duty of responsibility c. Both a and b d. Neither a nor b

c. Both a and b

Which of the following characterizes a joint venture? (Bloom's Level: 2) a. Created for a specific purpose b. Designed to have a limited lifespan c. Both a and b d. Neither a nor b

c. Both a and b

Which of the following actions related to the medical staff might raise antitrust issues? (Bloom's Level: 3) a. Granting privileges to all practitioners who seek medical staff membership b. Using clinical performance issues to grant medical staff privileges c. Excluding entire classes of practitioners from medical staff membership d. Investigating all applicable qualifications to grant medical staff privileges

c. Excluding entire classes of practitioners from medical staff membership

A publicly held corporation __________. (Bloom's Level: 2) a. Has relatively few owners b. Does not protect its owners from personal liability c. Generally has thousands of shareholders d. None of the above

c. Generally has thousands of shareholders

A not-for-profit corporation that is formed for a charitable purpose __________. (Bloom's Level: 2) a. Is subject to federal and state taxes b. May distribute its income for individuals' private gain c. Must meet IRS-established criteria to be tax-exempt d. Must provide charity care to anyone who is unable to pay

c. Must meet IRS-established criteria to be tax-exempt

A not-for-profit corporation may __________. (Bloom's Level: 2) a. Not make a profit b. Not make a profit for five years in a row c. Pay reasonable salaries to its employees d. Distribute its income for individuals' private gain

c. Pay reasonable salaries to its employees

Which of the following is true of contracts? (Bloom's Level: 3) a. They must be in writing. b. They must be express. c. They must contain an offer and acceptance. d. All of the above

c. They must contain an offer and acceptance.

Procedural due process may apply to a. a physician's medical staff membership at a hospital b. disciplinary action taken against an HIM employee c. a and b d. none of the above

c. a and b

Which of the following is ultimately responsible for the quality of care in a hospital? a. administrator b. CEO c. governing board d. medical staff executive committee

c. governing board

The Joint Commission's requirements for the minimum contents of the medical staff bylaws include all but which of the following? a. fair hearing b. credentialing, privileging, and appointment c. medical staff infection control committee d. corrective actions

c. medical staff infection control committee

Challenges to tax-exempt corporations operating with a charitable purpose include __________. (Bloom's Level: 3) a. Aggressive billing practices b. Insufficient charity care provided c. Inflated billing practices toward the uninsured d. All of the above

d. All of the above

Economic credentialing __________. (Bloom's Level: 2) a. May be associated with physicians who have an ownership in competing hospitals b. May be based on a perceived loss of loyalty by a physician c. May be associated with a review of a physician's volume of cases d. All of the above

d. All of the above

Which of the following characterizes a corporation? (Bloom's Level: 3) a. It is separate from its owners or incorporators. b. It can sue or be sued. c. It can continue to exist despite an owner's death. d. All of the above

d. All of the above

Which category of medical staff would be allowed to perform surgery? Bloom's Level: 4 a. Affiliate b. Honorary c. Consulting d. Associate

d. Associate

A term used to describe standard contract terms is __________. (Bloom's Level: 1) a. Warranty b. Arbitration c. Rule of reason d. Boilerplate

d. Boilerplate

Which of the following is not a required element for piercing the corporate veil? (Bloom's Level: 3) a. Complete domination of the corporation by its owners b. Control by owners was used to perpetrate a wrongful act c. Corporate control was the proximate cause of injury d. Corporation is a not-for-profit entity

d. Corporation is a not-for-profit entity

Which of the following is not a defense for nonperformance of a contract? (Bloom's Level: 2) a. Fraud b. Mistake of fact c. Duress d. Specific performance

d. Specific performance

When two or more entities at different levels in a distribution chain act together to restrain trade, this is __________. (Bloom's Level: 2) Horizontal restraint of trade Misrepresentation c. Consolidation d. Vertical restraint of trade

d. Vertical restraint of trade

Medical staff bylaws are legally binding and any changes must be approved by a vote of which of the following? a. hospital staff b. administrative staff c. hospital attorney d. medical staff

d. medical staff

Through the establishment of the National Practitioner Data Bank, the federal government became involved in malpractice issues and what other issue? a. employment of physicians b. licensure of physician c. pay for performance d. quality of care

d. quality of care

Active physicians on a hospital medical staff have an obligation to perform which of the following duties? a. complete records in a timely manner b. take night call c. treat patients regardless of ability to pay d. serve on medical staff committees e. a and d f. a, c, and d g. all of the above

g. all of the above