Financial Management in Healthcare, Exams of Nursing

Download Financial Management in Healthcare and more Exams Nursing in PDF only on Docsity! HFMA's CSAF 2023, Certified Specialist Accounting and Finance -With 100% verified solutions-2023-2024 Contribution Margin Difference between marginal revenue and marginal cost. Break-even point Level of sales volume of a product producing the exact amount of contribution margin needed to cover fixed costs. Overhead Indirect Costs Activity-based costing (ABC) Method of determining product costs using cost drivers or activity measures, which cause indirect costs to be incurred. Three main types of Cost standards. Predetermined (Synthetic), Negotiated (Historical), and Customized (Engineered) Four Types of Individual Cost behaviors Variable, Fixed Cost Pattern, Semi-Variable Cost Pattern, Semi-Fixed or Stepped Variable Three Principal Types of expense variances Price, Volume, and Efficiency The 4 Primary payment methods used in managed care Fee-for-Service, Per Diem Rate, Case Rate, Capitation Healthcare providers should develop different modeling tools depending on the reimbursement method proposed in the contract The general categories of provider excess loss insurance are per-person, aggregate, and carve-out. A Strategic Plan allows organizations to have a clear plan as to why they are in business and how they can stay in business in the future. The main types of control budgets include operating, capital, and cash. A budgeting process develops assumptions for the following: Admissions, ALOS, Expense per visit, Inflation on expense, FTE per visit, Productivity on FTE per visit, Labor cost per FTE, Net Rev per visit Operating budget's statistical factors include Historical statistics, Historical relationship of department volume, anticipated effects of new programs, clinical practice patters, covered lives in global payment risk programs, changes in regulatory environment, technical developments, process improvements, marketing efforts, demographic trends The primary purpose of measuring productivity is for management to determine if resources are being used efficiently Budget types include fixed and flexible The four budget variances used to explain by cause are Volume, rate (charged), price (of a supply), and efficiency (cost per procedure). Three common Capital Evaluation techniques Payback, Net Present Value Method, Return on Investment Healthcare organizations use commercial banking services for: Controlled Disbursement Account, Depository Account, Concentration Account and Zero Balance Account, Sweep Account The components incorporated in a cash budget: Ability of the organization to manage overall revenue cycle, projection of costs, variability in activities that impact both revenues and expenses, regularly recurring or periodic expenses, timing of capital purchases An investment policy Establishes a framework to make investment decisions and evaluate results The returns, risks, and correlation are the primary inputs for asset allocation models Different types of asset allocation risks are as follows: maturity (liquidity) risk, interest rate risk, credit risk, political (legal) risk, market (price) risk Three Internal control objectives: Effectiveness and efficiency of operations, Reliability of financial reporting (external and internal), compliance with applicable laws and regulations Sarbanes-Oxley established: Enhanced standards for accountability and penalties for wrongdoing. Sarbanes-Oxley makes it so that CEOs and CFOs are responsible for: Disclosure controls, ensuring specified information (controls) is made known to them, regular evaluations of controls with quarterly certifications PCAOB does: Register public accounting firms, establish audit standards, inspect accounting firms, disciplinary proceedings and appropriate sanctions, PCAOB budget. Components of auditor's attestation report: Objective, Date, Evaluation Operational auditing is one technique available to management to ensure objectives and organizational policies are effectively carried out. Current liabilities are satisfied within a year of the balance sheet date Examples of current liabilities: Notes payable to banks, current portions of long-term debt, accounts payable, advances from and accounts payable to third-party payers for reimbursement settlements, refunds, deferred revenue, accrued salaries, current portion of malpractice costs Exemption requirements for nongovernmental not-for-profit healthcare: No inures to private shareholder, no influencing legislation, no political campaign IRS form 990 - Return of Organization Exempt from Income Tax form for income tax under IRS section 501(a) and for non-exempt charitable trusts Most healthcare organizations are dependent on financing long-term debt Advance refunding enables providers: to restructure their long-term liabilities, reduce interest rates, or terminate restrictive bond covenants Revenue usually is recorded when: an enrollee or the service is provided to a patient or resident. Donations of noncash assets that are not long-lived assets are recognized as revenue in the period received. Donations received with no restrictions attached are reported as unrestricted support in the statement of activities. Donor-restricted contributions may be reported as unrestricted support if the organization reports consistently from period to period and discloses its accounting policy Major agencies with regulatory authority: Centers for Medicare and Medicaid Services (CMS), Provider Reimbursement Review Board (PRRB), Federal Trade Commission (FTC), Internal Revenue Service (IRS), Quality Improvement Organization (QIO), Joint Commission, Office of the Inspector General (OIG), United States Department of Justice (DOJ), U.S. Public Health Service Medicare was established by the Social Security Act of 1965, enacted on July 1, 1966 Medicare provides health insurance benefits to: 65 or older, renal (kidney) failure, certain disabilities Medicaid is administered by Jointly the federal and state governments. Medicaid began January of 1967, For Medicaid, states receive funding from the federal government based on the state's per capita income. First Medicare Cost Reimbursement Phase Determining Allowable Costs Second Medicare Cost Reimbursement Phase Cost Finding Third Medicare Cost Reimbursement Phase Cost Apportionment Fourth Medicare Cost Reimbursement Phase Determining Settlement Omnibus Budget Reconciliation Act of 1989, requires hospitals to maintain records on transferred patients for five years and maintain a list of physicians who are on call after the initial examination to provide treatment necessary to stabilize an individual Social Security Act provides for: Criminal penalties for fraud, civil monetary penalties by Secretary of HHS for fraud, and excluding providers who abused or neglected patients. Common Medicare fraud: Filing claims for un-rendered services, Misrepresenting the diagnosis, kickbacks, unbundling charges, falsifying certificates, misrepresenting the time, location, or frequency of service A Compliance Plan contains 8 points: Full support of organization & compliance officer, written procedures, comprehensive training and education program, hotline, due diligence with employment of sanction individuals, rules and standards, oversight of personnel, mechanisms for monitoring compliance, disciplinary measure for employees Audit Plan includes Goals, personnel conducting audit, individuals to interview, documents to review, attorney-client privilege HIPAA applies to: Health plans, healthcare clearinghouses, providers transmitting any health information electronically 3 conditions of Unrelated trade or business: trade or business, carried on regularly, not substantially related to the exempt purpose of the organization 3 Exclusions to unrelated trade or business: Without compensation; for convenience of members students, patients, officers, or employees; selling merchandise. AICPA's Audit of Providers of Health Care Guide identifies methods for quantifying and valuing uncompensated care. Four IRS tax-exempt status conditions: Existence of a governing board, Separate boards for multi-entity systems, full-time emergency room, open admission of medical staff to physicians in area Occurrence basis of malpractice claims all incidents occurring within the period are covered, reported or not