MHA Healthcare Finance and Budgeting 1

Question 1

Which financial statement shows a healthcare organization's revenues, expenses, and net income over a specific period?

Accepted Answer

Income statement

Answer

The income statement (also called the profit and loss statement) reports revenues, expenses, and net income over a defined accounting period.

Question 2

What does the term 'case mix index' (CMI) measure in hospital finance?

Accepted Answer

The relative weight and complexity of patients treated

Answer

Case mix index measures the average relative weight of all cases treated, reflecting the complexity and resource intensity of the patient population.

Question 3

Under Medicare, what payment system reimburses hospitals a fixed amount per inpatient stay based on diagnosis?

Accepted Answer

Diagnosis-Related Group (DRG)

Answer

The Prospective Payment System (PPS) uses Diagnosis-Related Groups to pay hospitals a fixed predetermined amount per inpatient admission.

Question 4

What is 'accounts receivable days' (AR days) used to measure in healthcare finance?

Accepted Answer

The average number of days to collect payment after a service is rendered

Answer

AR days (days in accounts receivable) measures on average how many days it takes a healthcare organization to collect payment after providing a service.

Question 5

Which budgeting approach starts from a zero base each period, requiring all expenses to be justified anew?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting requires managers to justify every expense from scratch each budget cycle, rather than simply adjusting prior-year figures.

MHA - Master of Healthcare Administration Practice Test

MHA - Master of Healthcare Administration Practice Test

MHA Healthcare Finance and Budgeting 1