HAC Healthcare Payroll & Compensation Accounting Flashcards

A hospital is implementing a new compensation benchmarking process. Which data source is most commonly used to establish market-competitive physician salaries?

Answer: MGMA Physician Compensation and Production Survey

The MGMA Physician Compensation and Production Survey is the industry-standard reference for benchmarking physician pay to ensure fair market value compliance.

Under IRS Section 409A, deferred compensation arrangements for healthcare executives that do not comply with distribution timing rules are subject to:

Answer: Immediate income inclusion plus a 20% penalty tax and interest

Non-compliance with Section 409A triggers immediate income recognition, a 20% excise tax, and premium interest charges on deferred amounts.

Which metric best measures workforce productivity in a hospital setting by comparing worked hours to a volume statistic?

Answer: Full-time equivalent (FTE) per adjusted occupied bed

FTEs per adjusted occupied bed normalizes staffing levels to patient volume, providing a standard productivity benchmark across departments.

A healthcare system pays sign-on bonuses with a repayment clause if the employee leaves within two years. How should the employee recognize this bonus for tax purposes?

Answer: Include the full bonus in gross income in the year received

Sign-on bonuses are taxable compensation in the year received, even if subject to a clawback; the employee may claim a deduction in the year any repayment is actually made.

For cost reporting purposes under Medicare, allowable salary costs for hospital employees are limited by which CMS guideline?

Answer: Compensation must not exceed what would be paid for comparable services in the community

CMS limits allowable compensation on cost reports to what is reasonable and necessary, generally meaning amounts comparable to similar positions in the same geographic market.

Which method of allocating employee benefit costs to departments in a hospital ensures the most accurate cost per service line?

Answer: Applying a benefits rate as a percentage of each department's direct labor cost

Applying a benefits loading rate (e.g., 28%) to each department's direct labor cost distributes fringe expenses proportionally based on actual labor consumption.