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MHA 706 FINANCIAL
MANAGEMENT MIDTERM E XAM |
QUESTIONS AND CORRECT
ANSWERS | LATEST UPDATE |
100% PASS
Question : Proprietorships & Partnerships: Pros & Cons CORRECT ANSWER : 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.
Question : Corporations: Pros & Cons CORRECT ANSWER : 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.
Question : Non-profit Organization
CORRECT ANSWER : Exempt from taxes. Goal is to
improve community.
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Question : For-profit Organizations
CORRECT ANSWER : (Investor Owned) Goal is to
maximize shareholder return. Owe taxes.
Question : Agency Problem
CORRECT ANSWER : 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.
Question : Third-party payor system in the US (i.e.
private vs public) CORRECT ANSWER : 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.
Question : Reimbursement methods (fee-for-service vs.
capitation)
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CORRECT ANSWER : Fee for Service: payment is tied
to amount of services provided. (Decades ago) Capitation:
payment is tied to the size of the covered population (number of enrollees) Payment is based on per # per month. Population is healthier.
Question : Medicare reimbursement for different types of
providers
CORRECT ANSWER : Medicare parts A, B & C.
Question : Medicare Part A (aka Hospital Insurance or
HI)
CORRECT ANSWER : Provides hospital insurance
automatically at age 65 (if FICA qualified) at no fee but may have deductible & co-pay.
Question : Medicare Part B
CORRECT ANSWER : The part of the Medicare
program that pays for physician services, outpatient hospital services, durable medical equipment, and other services and supplies.
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Question : Medicare Part C (Medicare Advantage)
CORRECT ANSWER : •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
Question : Medicare—Part D Prescription Drug Coverage
CORRECT ANSWER : a United States federal-
government program to subsidize the costs of prescription drugs and prescription drug insurance premiums for Medicare beneficiaries.
Question : Impact of the Affordable Care Act (what the
bill changed about the healthcare environment)
CORRECT ANSWER : Created new standards,
individual mandates, exchanges, and Medicaid expansion.Focused on quality through clinical compensation, bundled payment, value-based purchasing.