ACHE FINANCE TEST QUESTIONS WITH REVISED AND UPDATED ANSWERS
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Course
ACHE FINANCE
Institution
ACHE FINANCE
ACHE FINANCE TEST QUESTIONS WITH REVISED AND UPDATED ANSWERS
What is fund accounting - Answer-Fund accounting is a record-keeping method to manage categories of net assets to ensure compliance with the restrictions on those funds. Allows NFP/govt agencies have separate entities for specified acti...
ACHE FINANCE TEST QUESTIONS
WITH REVISED AND UPDATED
ANSWERS
What is fund accounting - Answer-Fund accounting is a record-keeping method to
manage categories of net assets to ensure compliance with the restrictions on those
funds. Allows NFP/govt agencies have separate entities for specified activities such as
operating/general/specific purpose/plant replacement/endowment. each fund self
balances such that assets equal liability added to net fund balance
Does operating revenue on a statement of rev/expenses include contractual
allowances/charity - Answer-no - operating revenue is reported net of contractual
allowances and net of charity (but charity policy and level included in footnotes)
When should bad debt be reported as a revenue deduction (not as expense based on
price)? - Answer-If recognize significant amount of patient services revenue at time
services rended, portion of bad debt should be deduction of revenue and shall report is
policy for assessing this and policy
What is an implicit (implies or believes to be) price concession - Answer-Refers to
portion of self pay balances owed by the patient with commercial insurance under
update 606
What are leasing requirement changes for accounting reporting - Answer-Now orgs
must present lease liability (lease payments) and lease asset (right of use) for operating
leases over 12 months - before orgs could gain access to assets via leasing without
providing the full presentation of the transaction on the financial statements
Who is responsible for whistleblower protection of SOX and federal agency with
oversight of reg - Answer-OSHA / SEC
What did Corporate and Criminal Fraud Accountability Act do 2002 - Answer-criminal
penalties for manipulation/destruction of financial records / protect whistleblowers, SEC
can freeze transactions/payments, obstructing official proceeding felony and closed
loophole of who can be charged by more broad definition
Who is required to certify financial reports under SOX - Answer-principal executive and
financial officers
What are general SOX requirements? - Answer-ind auditor functions
timely reporting of audit info
,certifying of financial reports
audit committee membership requirements
SEC lawyer conduct,
prohibits personal loans,
requires internal control structure,
disclose whether have code of ethics,
disclose off balance sheet transactions,
new record retention rules/penalties
What are demand side and supply side theories of free market at market equilibrium -
Answer-Demand - demand creates own supply, wages and prices are sticky, savers
and investors are separate groups with diff motivation;
Supply - creates own demand, flexibility exists in wages, prices, and interest rates,
saving are invested
What are policy implications for demand/supply side of free market (note in classical
theory no need for policies as market self corrects) - Answer-Demand - market can self
correct, takes long time so govt needs to stimulate economy by regulating demand with
large scale spending programs/stimulus with increased taxes/increase money.
Supply - market can self correct, takes long time so govt needs to stim
supply/production via tax reductions, deregulation and nonmonetization of govt deficits
Key economic factors for US HC expenditures - Answer-Private HI 31%/Medicare 21%;
increase 4.6 annually; hospital 31%/prof services 27%; 13,000 per person, personal by
pop 45-63 33%/65+ 35%, 23% pop 65+ (up 10%)
What is average daily census - Answer-divide number IP days by number of days (365)
ALOS - Answer-number IP days by number of admissions
Note: LOS typically does not include d/c date in range
payroll expenses - Answer-payroll exp include all salaries and wages.
labor-related expenses - Answer-payroll expenses plus employee benefits
FTE - Answer-derived by adding number of FT to one-half number of PT
Occupancy rate - Answer-Ratio of average daily census to the average number of
statistical (set up and staffed for use) beds
what is corporate restructuring - Answer-legal strategy to establish subsidiaries or
related corporations to max economic position of HCO which typically included private
foundations, parent holding companies, ind subsidiaries and joint ventures
What is a private foundation and benefits of restructuring as such - Answer-independent
legal entity established for charitable purposes under control of a donor who governs. If
, a for profit donor, allows to shelter some income from taxes by using the income for
purposes that are tax exempt
what is a parent holding corporation as related to restructuring - Answer-if need to
protect assets against liability to allow layering in event of malpractice
What is a ind subsidiary corp and relationship to restructuring - Answer-HCO controls
51% but has limited role in day to day ops - maximizes patients care and operating
revenues (gift shop is example - where better to have it separate from HCO)
what is a jv and benefit to restructuring - Answer-benefit from full economies of scale,
maximize capital, minimize risk or collaborate with MDs
What is unrelated business income - Answer-income generated by subsidiary
corporations (parking/hotels/catering) - is this taxed or not?
what is an integrated delivery system - Answer-a legal entity consisting of more than
one type of provider to manage a population's health care and/or contract with a payer
organization - delivery services across continuum of care to defined population while
accepting clinical/financial responsibility (to better integrate/coordinate care by
integrating MDs)
What is a physician hospital organization PHO - Answer-joint venture capable of
delivering a continuum of care to defined pop while accepting clinical/financial
responsibility (DESIGNED TO INTEGRATE CARE)
what are three examples of orgs designed to integrate patient care - Answer-IHS, PHO
and ACOS
What is shareholders equity - Answer-the difference between total assets and total
liabilities in a for profit HCO - represents the ownership interest of stockholders in org.
AKA stockholders equity or net worth and includes common stock (money invested in
org by owners) and retained earnings (income earned by org from ops minus dividends)
What is typically the largest current asset - Answer-A/R
What is the biggest contributor for not billing or collection of accounts in a timely
manner? - Answer-inadequate or incorrect info during precare
What are the legal aspects around A/R - Answer-Absent an ER, not required to treat
patient. Once initiate treatment, cannot terminate treatment based on inability to pay
What process ensures care is appropriate and reimbursable? - Answer-concurrent UR
by UR rn or d/c planner; retro UR should be done by org as well
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