Revenue Cycle Management
Information on risks obtained from professional organizations, publications, and risk managers at the other facilities allows a healthcare facilities risk management team to ___.
learn from the experiences and mistakes of others.
Which act established a Physician Quality Reporting System?
MIPAA
A hospital transporter accidently bumped into an elderly visitor with a gurney. She fell and broke her wrist, Which of the following will most reduce the risk of litigation by the injured woman?
Providing immediate orthopedic treatment at no charge
which healthcare insurance company action will result in the biggest cost savings?
Raising co-payments for name brand drugs
Which of the following is the best definition of the accounting term cash drawer?
A drawer containing a mix of bills and coins for receiving cash and making change.
When a $10000 loan is paid off, the balance in the Bank Loan liability account will be ___.
$0.00
A physician decides to radically change her practice. She now only provides services to patients who will pay her full charges at the time of service. she was able to lower her full charges because the new practice___.
Needs no billing staff
When a budget is balanced, expenditures equal borrowing plus
Net revenues
Johnson's Carpet Cleaning has completed their money cleaning at the medical office and submitted their billing for $200. Payment to Johnson's is made from the:
Operating checking account.
Which program provides federal funding for the automation of electronic medical records?
Recovery Audit Contractor Program
Which of the following is the most important reason for obtaining, reviewing, and saving incident reports?
Retaining information and evidence in case of litigation
Modern accounting software makes it relatively easy to correct transaction error. Minor errors discovered after the annual financial report is prepared are not corrected. Why not?
Retracting an annual report is not appropriate for minor errors
A plumber fixes a leaky pipe in a medical practice late at night on September 23rd. He mails an invoice for services rendered to the medical practice that is received on September 29th and is due by October 14th. A check is written to pay the invoice on October 2nd. Under the accrual accounting, what should be the posting date for the repair expense?
September 23rd
The outside auditor of a publicly held , for-profit pharmaceutical corporation believes that the corporate accountants should have handled research expenses differently. The most likely outcome is that
The auditor accepts the existing method because it meets standards
The RAC program detects approximately 3/4ths of the fraud and abuse in Medicare and Medicaid programs.
True
The widely used double entry accounting system was invented over 500 years ago.
True
An individual works at a business that covers half the cost of a group healthcare insurance plan with the other half paid by the employee. The individual quits his job but wishes to retain group healthcare insurance as per COBRA. How much will he pay for coverage?
Twice the amount he paid while employed plus an administrative fee
Joe Teen has a simple business: he does odd jobs for this neighbors for $10 per hour. Joe hopes to become an accountant and would like to use a double-entry bookkeeping system for his business. What is the smallest number of accounts he needs to create?
Two
A physician provides the same service to two patients with a charge of $80. One patient pays cash. The other patient has insurance coverage. Which is correct for a double entry system?
Two credit postings of $80 in the Medical Services Account
The net cash and cash equivalents from an end of fiscal year statement of cash flows should match the
cash and cash equivalent on the balance sheet
In a sole proprietorship physician practice, only the physician can sign checks.
False
In a typical medical facility, the cash budget will be the same for each month of a fiscal year.
False
Items such as prescription pads and printed patient questionnaires are capital assets.
False
Materiality is the accounting principle that requires all material purchases to be recorded as consumables or as capital assets.
False
New medical diagnostic technologies and new therapies reduce healthcare costs by reducing the time between disease and proper treatment.
False
One task of a full-time accountant at a publicly held corporation is to prepare and annual audit of the corporations financial records.
False
TRICARE Insurance is a private company contracted by the federal government to provide healthcare insurance to members for the members of the armed forces.
False
The Medicare Improvements for Patients and Providers Act of 2008 mandates the used of electronic prescriptions for Medicare Patients.
False
The National Institute of Health provides worker safety guidelines and Standard Precautions for healthcare facilities.
False
The authorized personnel budget refers to the costs of employing licensed professionals such as physicians, nurses and pharmacists.
False
The income statement reports on revenues, cash and short term investments.
False
The statement of cash flows is an example of managerial accounting.
False
Which of the following provides hospitalization insurance?
Blue Cross
Which type of healthcare reimbursement system pays a fixed amount per patient?
Capitation
Which of the following is true about the National Provider Identifier?
It correlates only to the providers name
A medical practice that uses accrual accounting and straight line depreciation of durable equipment bought an examination table for $2000 that will be depreciated over 10 years. At the end of its second year, the posting for the annual operating expense related to the examination table will be __
$200
Helen's Home Collection business sends phlebotomists to patient's homes to collect blood samples. The business bought a care two years ago for $20,000. The car is an asset worth___.
$20000 minus 2 year depreciation
A self employed person who earns $100K must pay a Medicare payroll tax of $______.
$2900 (or 2.9%)
The NPI requirement was part of ___.
HIPAA
Which of the following is the most important task for an insurance consultant to a large healthcare facility?
Determining the types and amounts of insurance coverage.
Which of the following would be considered a current asset?
money in a checking account
A medical office building built 30 years ago was assigned a useful life of 25 year and a salvage value of $0. The medical practice moved into a new building and sold the land and the old medical office building for $150,000. Appraisers indicated that the land was worth $110,000 and that the building was worth $40000. How should the building sale be posted on the books?
$40000 to Miscellaneous Revenue
Medical office has many patients covered by WeCare, a preferred provider health insurance company. A Level 1 office visit has a standard charge of $80. WeCare pays $50. The past history shows that WeCare denies 5% of claims for Level 1 office visits. There were 100 Level 1 office visits by We Care patients in the past month. Assuming the same past history, what will the totals be for Accounts Receivable and Less Allowance for Uncollectible Payments?
$8000 and $400
A healthcare facility buys a Super Scanner for $60,000. It has a six year life expectancy and an estimated salvage value of $10,000. The accountant recommends a straight line depreciation method. What is the annual charge for depreciation for the Super Scanner?
$8333.33
Premiums payments from Medicare recipients cover what portions of Medicare's prescription drug benefits?
10%
A medical practice has a net income of $1M and ownership equity of $500K the day before the end of the fiscal year. The partnership immediately spends $100K on capital equipment. What is the return on equity ratio?
2.0
Healthcare expenditures by Americans were approximately ___ trillion dollars in 2009.
2.0
An employee and his wife receive healthcare insurance from the employers group plan. On the employee's 65th birthday, he becomes eligible for Medicare and ineligible for his employers group healthcare insurance plan. The employees wife is 61 years old. Based on COBRA, she will be eligible for coverage under the employers group plan for ____ months.
36
What happens when a not for profit corporation has a positive net income?
??? it must invest the net income in the business
The following is true about a preferred provider organization plans and explain their limited ability to control healthcare costs.
A PPO plan is a form of managed care in which the insurer contracts with healthcare providers that agree to a reduced cost fee schedule. and Covered persons who use a PPO pay less through combination of lower premiums. lower deductibles, and smaller co-payments. A PPO plan is a fee-for-service and providers have no incentives for reducing services.
In most medical malpractice lawsuits, the plaintiff's attorney fees are ____.
A percentage of the settlement
Crime insurance for a hospital would cover losses from ___
A purchasing agents scheme to send payments to her spouse's fake business.
Which factor is most responsible for causing rapid rises in the salaries of healthcare professionals?
A shortage of qualified professionals
Which of the following could result in a tort?
A tree limb falling on a patient's car in a medical facility parking lot
_____ assignment is when a provider does not bill a patient for the difference between the service cost and Medicare allowed.
Accepting
The PPACA plans to lower medical costs through the use of
Account Care Organizations (ACOs)
A physical therapist has a standard charge of $100 for a back therapy session. A patient makes a co payment of $20 at the time of service. His insurer sends a payment of $50. Which account entry for that payment is correct?
Account receivable $80 credit.
Helen's Home Collection business receives a box of supplies that cost $168. The box came with a packing slip that correctly listed the contents. The packing slip was inadvertently discarded before the bookkeeper entered the transaction. which of the following is true?
Accounts payable will be missing a $168 credit.
What is the most important advantage of zero based budgeting over other budgeting philosphies?
All managers are forced to look for alternatives when preparing their budgets.
The Patient Protection and Affordable Care Act of 2010 will add a new funding source in 2018. That source is _____
An excise tax on the healthcare plans and new excise tax on tobacco products
Which of the following is a requirement for a publicly held healthcare corporation but not for a proprietorship?
Annual financial report audited by an outside accountant
Income statements must be prepared___.
Annually
The checking account of a small healthcare business pay interest each day the balance in the account exceeds $1000. The bank credits the account with the accumulated interest at the end of each month. How should the interest income be posted?
As a credit to interest income and debit to cash
which act allowed Medicare-eligible persons to receive Medicare benefits from private insurers?
Balanced Budget Act of 1997
Why do clinicians have to include diagnosis codes (in addition to procedure codes) when submitting claims for medical services to CMS?
CMS will not pay for procedures that don't relate to diagnosis??
Helen's Home Collection business borrows $25,000. This amount should appear as a debit to the ___ account.
Cash
What is the accepted method for a healthcare facility to get money into its petty cash fund?
Cash a check written against the operated checking account.
Mrs. Brown comes into the medical facility for a routine office visit. Her co-payment is $35, and she hands the cashier a $50 bill. The $50 bill is deposited into and the $15 change taken from, which of the following?
Cash drawer
A legal document required in most states for expanding a hospital is
Certificate of Need
When doing a bank reconciliation, which of the following is subtracted from the cash balance from the accounting records?
Charge for an NSF check
A medical laboratory bought a courier vehicle in 2008 and used a six year depreciation schedule. The next year, the lab bought a similar vehicle and used a 5 year depreciation schedule. This violates the accounting principle of ____.
Consistency
Deferred revenues are a type of ___.
Current Liabilities
Liabilities are divided into ___.
Current and non current
Many healthcare insurance companies offer incentives for covered persons to improve their health by exercising, not using tobacco products and losing weight. When such incentives work, the insurance companies cost should go ____ and future Medicare costs of individuals should go ____.
Down and Down
A physician chooses to create different revenue accounts for physical examinations, office visits and office surgical procedures. What advantages does this have over creating a combined revenue account for all medical services?
Easier to see which type of service is most profitable.
A wealthy individual provides all the funds for a not for profit counseling center that provides free assistance. Which of the following is a stakeholder?
Employees
The federal government regulates base pay and overtime through the ____.
Fair Labor Standards Act of 1938
A bookkeeper mistakenly posted a transaction to the Cash account and the Medical Services account. It was supposed to be posted to the Cash Account and the Product Sales account. This error will be detected with a trail balance.
False
A business uses the calendar year for its fiscal year. On March 10, it buys six months of liability insurance that will go into effect on April 1st. This should be listed in the books as a prepaid expense.
False
A group practice comprised of 4 physicians hires HIM to perform the billing for the facility each work day. The wages paid should be listed under Contract Services.
False
Accrued liabilities are the total of all liabilities in the current fiscal year.
False
Ambulatory care refers to services provided by paramedics and emergency medical technologists while transporting a patient to the hospital.
False
Bookkeeping transactions are completely automated in modern Practice Management Systems.
False
A large radiology group wants to offer a SuperScanner Service. The SuperScanner has an expected life of 6 years. Based on the expected volume of 400 scans per year, the group's accountant determines that the breakeven point is 7.2 years. what should the group do?
Give up the SuperScanner plan at this time.
Which Act required EHR systems to adopt data records standards, follow specific standards for electronic transactions and have the capability of interfacing with other EHR systems?
HIPAA
The requirement to make healthcare related electronic transmissions using ASC-X12 Version 5010 starting in 2012 was part of ___.
HIPPA
Which type of health insurance plan uses primary care clinician gatekeepers to coordinate the care of plan participants?
HMO
Which of the following would be considered a discount that would be permitted as a "safe harbor" from fraud and abuse regulations?
HMO contracts with laboratory for laboratory services and receives a discounted price.
What type of healthcare insurance program uses primary care "gatekeepers"?
HMOs
Some businesses will accept only customer payments made by credit cards or debit cards despite having to pay service fees for each transaction. Which of the following is the best reason for not accepting cash payments?
Handling cash cost money.
A creditor of a medical facility is an entity that___.
Has not been paid for goods or services it provided
A hospital has a significantly higher rate of serious blood transfusion reactions than similar hospitals. A risk management team was assigned to the problem. Which of the following is one of the first things it should do?
Investigate the nurses whose patients had transfusion reactions.
Which of the following is true regarding the electronic prescription program created by MIPPA?
It is a voluntary program
Which of the following is true about the statement of cash flow?
It is included among generally accepted accounting principles.
A jury in a medical malpractice lawsuit against a hospital determines that the patient is responsible for 2/3rds of the injury and the hospital is responsible for 1/3rd. The jury determined that the compensation for the injury will be $900K. The hospital had to pay the entire amount. This is due to
Joint and several liability
An American Hospital Association 2010 survey showed that ___ of survey respondents were to meet the CMS requirements for meaningful use of electronic health record systems.
Less than 2%
The current ratio and quick ratio assess _____.
Liquidity
A healthcare business has a current ration of 1.5 and a quick ration of 1.3 and solvency ration of 2.0. Such a business is most likely to have difficulty with___.
Long term debt
Prescription drugs for the elderly are covered under
MMA (2003)
Most hospitals and many medical practices in the USA use EHR systems, but few of them meet "meaningful use" requirements of HITECH. Which of the following explains that fact?
Meaningful use requires transmittal of clinical quality measures to governments??
What is the source of funding for the TRICARE of Life program
Medicare
Which of the following includes incentives for the use of electronic prescriptions?
Medicare Improvements for Patients and Providers Act of 2008
In which issue of the Federal Register are updates to Medicare outpatient reimbursement NOT published?
October
Breakeven analysis of a new medical service for elderly patients shows that 900 units of service are required to break even. At that volume, fixed costs are half the total costs. The predicted volume of service is 800 units. Which of the following is a realistic choice that will make the new medical service profitable?
Offer the service to patients of similar sized facility at a 10% discount.
For a going concern, obligations are typically paid for purchased items____.
On the due date of the bill.
Medicare part _____ is a prescription drug benefit.
Part D
Which of the following is true about the payroll in a large healthcare facility?
Payroll tasks are complex and labor intensive
A physician's practice is a sole proprietorship. Most patients are covered by group healthcare insurance provided by their employees (or their spouses employers). Who is responsible for making sure that the insurance companies and patients had paid the proper amount.
Physician
Which group does the Medicare program not cover?
Prisoners
Return on equity is a type of ___.
Profit Level ratio
Which of the following report would be or most interest to someone who is considering purchasing a large number of shares in a publicly held healthcare corporation.
Profitability forecast
Which of the following types of insurance would cover water damage to paper medical records in a physicians office?
Property
Helen's Home Collection business makes a payment on the loan. The payment of $1000 consists of $900 principal and $100 interest. The Cash Account will be _____.
Reduced by $1000
The risk management team at a large hospital identified its ten most serious risks and developed procedures to reduce those risks. After tow years, those ten risks either had no occurrences or had more than 50% reductions in occurrences. Which of the following actions is best for the hospital?
Reevaluate risks and develop procedures for a different set of serious risks
A medical facility employee's weekly gross salary is $1000. Her benefit deductions are $100 for a retirement account and $40 for a healthcare savings account. Social Security and Medicare withholding total $56.50. Her federal tax income withholdings are based on ___.
The employees W-$ and tax tables ???
A for profit business expects to make a large profit in the next year because it has completed its payments on a mortgage. To lower its taxes in its next fiscal year, it buys expensive equipment and ___.
Uses accelerated depreciation
The responsibility of medical services at most hospitals lies with
The chief of staff or medical director
Which of the following programs currently allows armed forces members and their eligible dependents to be reimbursed for services provided by civilian healthcare programs.
TRICARE Standard
One of the physicians owners of a partnership medical practice left his wallet at home and wants the office manager to give him $10 from the cash drawer so he can buy lunch. What should the office manager do?
Take the $10 from the petty cash lockbox and record that the physician will repay it.
The Healthcare Common Prodedure Coding system required by CMS for Medicare patients was based on the Current Procedure Terminology developed and owned by ___.
The American Medical Association
Which of the following primarily involved changing the time allowed between a workplace discrimination event and filing a formal complaint?
The Lily Ledbetter Fair Pay Act
The requirement of the Patient Protection and Affordable Care Act of 2010 that all persons purchase healthcare may be deemed unconstitutional by the United States Supreme Court. If that happens, the entire Act will be overturned because___.
The PPACA lacks a severability clause.
Which of the following Acts had the greatest financial and logistical impact on healthcare insurance companies?
The Patient Protection and Affordable Care Act of 2010
Bad debt expense is ___.
The amount of revenue due that is written off as uncollectible.
A rural village has one family physician. The nearest hospital, 25 miles away is a thirty bed facility owned by the physicians who practice in the rural county. Village residents are unlikely to use a preferred provider organization or a health maintenance organization because
The local physicians and the small hospital have no competition and therefore no need to accepted reduced fees from a PPO or capitated payment from a HMO.
If present trends in the use of CMS-certified electronic health records EHR continue, what will happen in 2015 to the majority of clinicians who treat Medicare Patients?
They will be paid less by the Medicare program
A business can choose any starting point for its fiscal year.
True
Employment practices that are not intended to be discriminatory can be prohibited by the Civil Rights Act of 1964.
True
Healthcare is more heavily regulated than most other businesses in the United States.
True
Healthcare spending in America has risen faster than the cost of living index for decades.
True
Medicare beneficiary premiums cover only one-fourth of Medicare Part B costs.
True
Salaries and benefits is almost always the largest expense category for hospitals and nursing homes.
True
The Health Insurance Portability and Accountability Act contains regulations concerned with privacy of patient information.
True
A new government regulation decreases the time that a bank can hold a check before clearing it. This shortens the average float by two days. Under which circumstance will this cause a loss of revenue for a healthcare business?
When it writes checks from an account that pays interest.
When conducting breakeven analysis for a new service at a healthcare facility. ___
You solve for the volume of the new service
A male respiratory therapist at a hospital requests ten weeks unpaid leave so he can help out at home after the birth of his third child. His supervisor told him that a new respiratory therapist will need to be hired, and the he may not have a job after 10 weeks, if the supervisor does what he said his actions would be ____.
a violation of the Family Medical Leave Act of 1998
Monthly budget review is ___.
a way to identify cash flow problems and embezzlement
Accounts Receivable for a physician's office contains___.
accumulated charges for services performed.
A not-for-profit hospital must
adopt a corporate structure
Which of the following would be included in cash and cash equivalents?
all excepts bank certificates (operating checking account, petty cash fund, cash drawer,
A master operating budget for a hospital is comprised of ____.
all the departments or unit budgets
The emergency department of a hospital is
an out-patient facility
Home healthcare services___
are eligible for Medicare and Medicare reimbursement
Nursing home costs for elderly Americans___
are most covered by Medicaid
The final section of the statement of cash flows reconciles cash to the ____.
balance sheet
Usual, customary and Reasonable fees are
based on surveys conducted by insurance companies
When a bank statement for the operating checking account of a medical practice does not include a check to a vendor mailed three weeks earlier, someone at the medical practice should___.
contact the vendor and ask about receipt of the check.
In a revenue budget for a healthcare business, net medical revenues is gross medical revenues minus ___.
contractual adjustments
Two types of care covered by Medicare Part A are hospitalizations and limited stays for ____ in skilled nursing facilities.
convalescence
The Americans with Disability Act of 1990 ___.
created a litigation nightmare due to poorly defined terms.
Healthcare providers who participate in a capitated payment type of health maintenance organization
get paid a per member per month rate
A business that uses accrual account with monthly accounting periods gets a utility bill on June 2nd for the 30 day period April 16 - May 15. How should this bill be posted?
half April , half may utility expenses
The budgeting philsophy that bases unit or departmental budgets on the current fiscal years budget and an adjustment factor is ____.
incremental budgeting
The legal basis of a medical malpractice lawsuit is
injury due to a wrongful act
Which of the following is a provision of the Patient Protection and Affordable Care Act of 2010 that went into effect that year?
insurers must cover dependent adult children until age 26
Hospice care___
is for patients and their families.
At a large, for profit hospital, which of the following groups most needs to be trained by human resource professionals on federal laws related to employment?
managers and supervisors
The net worth of a government owned healthcare facility is referred to in accounting as ___.
net assets
Healthcare insurance premiums increased significantly shortly after passage of the Patient Protection and Affordable Care Act of 2010. A part of the increased premiums was due to ____.
no deductibles or co-payments for preventative care services
Under accrual accounting, patient charges for medical services are posted as revenues on the date ____.
of service
Individuals covered by a high deductible health plan within a preferred provider organization use fewer outpatient services and shop around for lower cost outpatient services because they
pay directly for routine care.
Americans without healthcare insurance (private or government)
pay directly for routine medical care
A medical lab supervisor has been spending 20 hours per week working in the lab as a technologist because of a staffing shortage. if she works more than 40 per week, the lab ___.
pays no overtime because she is an exempt employee
What type of healthcare insurance coverage is most common in America?
private insurance from employer
A small, closely held corporation is owned by
private investors
A computerized accounting system can ___.
provide trial balances at any time.
Most proprietorship's form professional corporations in order to
reduce financial liabilities
A healthcare business that using accrual accounting issues employee paychecks on January 10, 2012 that cover the 14 day work period December 25, 2011 through January 7, 2012. For federal income tax purposes, the employees should ----.
report all of that paycheck as 2012 income.
A large hospital uses line item control of its budget. Variance analysis show that one unit is exceeding its budget for Repairs due to an manufacturing flaw in a commonly used device that is no longer under warranty. The unit manager can ____.
request a meeting with upper management to change the budget
What does a statistical budget project?
revenues from providing services.
In double entry bookkeeping, a trial balance is prepared. The expected result is____.
that credit accounts and debit accounts have equal totals.
Developers of a healthcare facility's capital budget must know ____.
the dates when capital items will need to be replaced
Which of the following financial management issues differentiates healthcare from other businesses?
third party payers
Most healthcare providers receive most of their payments from
third-party payors
Dr. Ray performs a limited examination of a patient with XYZ healthcare insurance. Dr. Ray knows that XYZ will pay $65 for that service. Why does the account entry in the Medical services account list the standard fee of $90?
to enable calculations of the discounted fees
Which of the following is a common liability for a healthcare facility?
unpaid bills for supplies
Which of the following is a non-exempt employee?
waitress
Which is not a component that is taken into account with a Relative Value Unit (RVU)?
work, malpractice and overhead (all are listed components)