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MHA 706 Midterm- Lord – 104 Exam Questions and Answers
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MHA 706 Midterm- Lord – 104 ExamQuestions and Answers
Proprietorships & Partnerships: Pros & Cons - -Pros: Ease of Information,
Subject to a few regulations, no corporation income taxes.
Cons: Limited life, difficult to transfer, unlimited life, difficult to raise capital.
-Corporations: Pros & Cons - -Pros: Unlimited life, easy transfer of
ownership, limited liability, ease of raising capital.
Cons: Cost of formation and reporting, double or triple taxes must be paid.
-Non-profit Organization - -Exempt from taxes. Goal is to improve
community.
-For-profit Organizations - -(Investor Owned) Goal is to maximize
shareholder return. Owe taxes.
-Agency Problem - -the possibility of conflict of interest between the
stockholders and management of a firm.
Example: Hire someone to carry out a job function, but they go out of their
interests instead of best interests of company/organization.
-Third-party payor system in the US (i.e. private vs public) - -Private: Blue
Cross Blue Shield, Commercial Insurers, Self-Insurers. (AETNA)
Public: Medicare and Medicaid-both offer services to different levels. "Safety
net" Lowest reimbursement rates.
-Reimbursement methods (fee-for-service vs. capitation) - -Fee for Service:
payment is tied to amount of services provided. (Decades ago) *Dental
industry*
Capitation: payment is tied to the size of the covered population (number of
enrollees) Payment is based on per # per month. *Decreasing utilization*
Population is healthier.
-Medicare reimbursement for different types of providers - -Medicare parts
A, B & C.
-Medicare Part A (aka Hospital Insurance or HI) - -Provides hospital
insurance automatically at age 65 (if FICA qualified) at no fee but may have
deductible & co-pay.
, -Medicare Part B - -The part of the Medicare program that pays for
physician services, outpatient hospital services, durable medical equipment,
and other services and supplies.
-Medicare Part C (Medicare Advantage) - -•Replaces and covers expenses
found in Part A and B
•Medicare private fee-for-service plans (PFFS)
•Medicare managed care plans (HMOs and PPOs)
•Medicare specialty plans
-Medicare—Part D Prescription Drug Coverage - -a United States federal-
government program to subsidize the costs of prescription drugs and
prescription drug insurance premiums for Medicare beneficiaries.
-Impact of the Affordable Care Act (what the bill changed about the
healthcare environment) - -Created new standards, individual mandates,
exchanges, and Medicaid expansion.
Focused on quality through clinical compensation, bundled payment, value-
based purchasing.
-Regulations and standards of financial accounting (e.g. SEC, GAAP, FASB) -
--Securities and Exchange Commission (SEC): has the legal authority to
regulate the form and content of financial statements.
-Financial Accounting Standards Board (FASB)
-Generally Accepted Accounting Principles (GAAP): the conventions that have
evolved from the pronouncements and rulings of the implementing
organizations constitute a set of guidelines for the preparation of financial
accounting statements. -ONLY applies only to financial accounting
statements. Does NOT remain STATIC.
-GAAP (Generally Accepted Accounting Principles) - -Split into 3 categories:
Assumptions, Principles, & Constraints
-Assumptions of GAAP - -economic entity, monetary unit, periodicity, going
concern
-Principles of GAAP - -historical cost, revenue recognition, expense
recognition (matching), full disclosure
-Constraints of GAAP - -Materiality & Cost-benefit
-Accrual Accounting - -Accounting that records the impact of a business
event as it occurs, regardless of whether the transaction affected cash.
*More complicated, provides a better picture of true economic status of a
business, is required by GAAP. Record revenue at the point of time
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