MHA 706 Midterm- Lord 2024 Exam with Complete Solutions Rated A+ 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.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.
Non-profit Organization - Correct Answer Exempt from taxes. Goal is to improve community.For-profit Organizations - Correct Answer (Investor Owned) Goal is to maximize shareholder return. Owe taxes.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.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.Reimbursement methods (fee-for-service vs. capitation) - Correct Answer 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. 1 / 2
Medicare reimbursement for different types of providers - Correct Answer Medicare parts A, B & C.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.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.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 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.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.Regulations and standards of financial accounting (e.g. SEC, GAAP, FASB) - Correct Answer -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.
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