HFMA test 4 Latest Update 2024-2025 220

HFMA test 4 Latest Update 2024-2025 220 Questions and 100% Verified Correct Answers Guaranteed A+

• Methods of Projecting Statistics and Revenue Budgets: - CORRECT ANSWER:

Methods of Projecting Statistics and Revenue Budgets:

Estimate of Demand

Past Activity

Estimate of the Number of Procedures or Patient Visits

• Functions of Budget - CORRECT ANSWER: Functions of Budget:

• The budget also becomes a tool for monitoring performance against that plan.

• The budget incorporates the strategic and operating plans for the organization, both

in terms of the revenues and expenses, as well as the statistical volumes and resources associated with the plan.

• It also provides a framework for setting priorities, securing and allocating resources

efficiently, and controlling costs.

• The budget summarizes a set of expectations integrating the impact of environmental

factors and management decisions

• functions of business plans - CORRECT ANSWER: Business plans:

.

• Explain where one wishes to go and how to get there.
• Define key performance variables and expected benchmarks or metrics by which

progress can be monitored.

• Explain the present situation (including its history) and describe the purpose of the

plan (where the program is headed).

• Force methodical thinking about what is to be accomplished and how to plan for it

• key functions of business plans? - CORRECT ANSWER: Business plans:

• Explain where one wishes to go and how to get there.
• Define key performance variables and expected benchmarks or metrics by which

progress can be monitored.

• Explain the present situation (including its history) and describe the purpose of the

plan (where the program is headed).

• Force methodical thinking about what is to be accomplished and how to plan for it. 1 / 4

A Common approach is to express RBRUV as the following 4 statistics: - CORRECT

ANSWER: A Common approach is to express the following 4 statistics:

• Number of visits
• Number of procedures
• Number of RVUs
• Number of RVUs per visit

A comprehensive budget for a medical practice includes statements projecting: -

CORRECT ANSWER: A comprehensive budget for a medical practice includes

statements projecting:

Statistics Operating expenses and revenues Capital expenditures Cash flows

a forecast of the relevant activity level for each department. This defines the volume of business for the year ;summarizes historical and projected activity of the group. -

CORRECT ANSWER: Statistical Budget

A lender allows a borrower to use a specified amount of money in return for a rental fee

for use of that money. The rental fee is known as:

Principal.

Interest.

Debt service.

A revenue bond. - CORRECT ANSWER: Interest

a lender or group of lenders allows a borrower the use of a specified amount of money,

- CORRECT ANSWER: Principle amount on the loan

A measure of how efficiently an organization pays its bills. - CORRECT ANSWER:

Average payment period

A measure of the capital structure and the degree of flexibility an organization might

have in raising capital. - CORRECT ANSWER: Capital expense (%)

A measure of the capital structure of the organization. This ratio is important in evaluating the financial risk position of an organization - CORRECT ANSWER: Cushion Ratio

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A measure of the efficiency of the collections function - CORRECT ANSWER: Accounts receivable (days)

A measure of the volume and utilization of inpatient services. - CORRECT ANSWER: Maintained bed occupancy

A method of financing capital that provides for the payment and ownership of a capital asset as a contractual obligation executed over time, rather than at the time of

possession. T - CORRECT ANSWER: Leases

accounts for the quantities and types of resources to be used to achieve the projected

statistical volumes. - CORRECT ANSWER: Expense Budget

Accounts receivable (days) Formula - CORRECT ANSWER: (net patient accounts

receivable x 365) ÷ net patient revenue

Acid Test Ratio - CORRECT ANSWER: The acid test ratio, the most restrictive test on liquidity, indicates the assets that can be immediately converted into cash. Only cash and marketable securities, therefore, are used in this calculation. The accounts receivable might take a little bit longer to convert, so we omit it from the acid test ratio.

Agreements between a company and its creditors that the company should operate within certain limits; It states the limits or thresholds for certain financial ratios that the

company may not breach. - CORRECT ANSWER: Debt Covenant

All of the following are requirements for tax-exempt financing, EXCEPT:

Organizations must qualify as a tax-exempt organization.

Organization must restrict the use of funds to tax-exempt purposes.

Proceeds cannot be used in any way directly benefiting an individual or for-profit organization.

Organizations must have a debt-to-equity ratio of 1:1 or less. - CORRECT ANSWER: No specific debt-to-equity ratio is necessary to obtain tax-exempt financing. The three requirements for obtaining tax-exempt financing are that the organization must qualify as a tax-exempt organization, the funds must be used only for tax-exempt purposes, and the proceeds cannot be used in any way that directly benefits an individual or for-profit organization. This statement is not true and is therefore

All of the following methods represent effective approaches for medical groups to

estimate future revenues, EXCEPT:

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Estimate of demand.

Estimate of supply.

Past activity.

Estimate the number of procedures or patient visits. - CORRECT ANSWER: Estimate of supply.

an annual process to estimate the resources committed for new projects, equipment,

and facilities. - CORRECT ANSWER: Capital Budget

An environmental assessment may include the following: - CORRECT ANSWER: An

environmental assessment may include the following:

• Analysis of regulations at state and federal levels and their impact on the

organization.

• Appraisal of labor market issues, including ability to recruit clinicians and physicians.

• Assessment of the economy, employment, and business factors within the community

and/or region.

• Evaluation of reimbursement mix and changes.

• Comparison of the organization's performance to its peers and others in the region or

comparable entities nationwide.

• Analysis of the current, past, and potential future customers based on demographic

data for the service area.

• Understanding of what the competitors in the region or market may be considering or

are doing.

• Review of performance indicators: patient satisfaction, financial ratio analysis, volume

and outcome reports, etc.

• The assessment provides guidance as to obstacles and opportunities available to the

organization.

An indexing technique for relating work effort to output, in order to determine work load,

measure productivity, or calculate procedure costs. - CORRECT ANSWER: RVU

An indication of how long an organization can support operations with no inflows of cash

- CORRECT ANSWER: Days Cash on hand

An indication of how long an organization can support operations with no inflows of cash is referred to as days cash on hand.

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