CMC Financial Management & Budgeting 3

Question 1

A cardiac surgery program is analyzing its payer mix and finds 60% Medicare, 15% Medicaid, 20% commercial, and 5% self-pay. Which payer group typically offers the highest reimbursement rates relative to cost?

Accepted Answer

Commercial insurance

Answer

Commercial insurers generally negotiate rates that exceed Medicare and Medicaid reimbursement, often producing the highest margins per case.

Question 2

A hospital's cardiac program has a contribution margin of $2,400 per case and fixed costs of $3,600,000 annually. What volume is required to break even?

Accepted Answer

1,500 cases

Answer

$3,600,000 ÷ $2,400 = 1,500 cases needed to cover fixed costs at the break-even point.

Question 3

Which financial statement provides a snapshot of an organization's assets, liabilities, and net assets at a specific point in time?

Accepted Answer

Balance sheet

Answer

The balance sheet (or statement of financial position) reflects assets, liabilities, and net assets as of a single date.

Question 4

A cardiac manager is asked to prepare a zero-based budget. This approach requires that:

Accepted Answer

Every budget line must be justified from scratch each cycle regardless of history

Answer

Zero-based budgeting requires full justification of all expenditures each period rather than incremental adjustments from prior budgets.

Question 5

Which cost behavior pattern describes expenses such as cardiac cath lab equipment depreciation that remain constant regardless of procedure volume?

Accepted Answer

Fixed costs

Answer

Fixed costs, like depreciation, do not change with volume within a relevant range of activity.

CMC - Cardiac Medicine Certification Practice Test

CMC - Cardiac Medicine Certification Practice Test

CMC Financial Management & Budgeting 3