NEBC Exam 2026 – Complete Study Guide and Practice Questions
For Profit Organizations - correct answer ✔✔ Can lawfully release a patient who does not have
the ability to pay for services (after EMTALA). Serve lower income populations. Owned by
investors or shareholders. Large portion of budget allocated to marketing and advertising.
not-for-profit organizations - correct answer ✔✔ Must treat all conditions or people regardless
of insurance or ability to pay. Considered charities by IRS. Do not pay federal or state/local
property taxes. Obligation to the community.
Medicare - correct answer ✔✔ National Health Insurance program for people 65 and older,
disabled, and any age with ESRD.
Medicare A - correct answer ✔✔ Covers inpatient hospital stays, some hospice and home
health care, no monthly premium
Medicare B - correct answer ✔✔ Medical insurance, pays for doctor services and outpatient
services, PT/OT services. Monthly premium.
Medicare C - correct answer ✔✔ Often called the advantage plan or choice plan. Includes A and
B, most include D. May offer dental, vision, and wellness
Medicare D - correct answer ✔✔ Prescription drug coverage. Monthly premium. Available to
everyone, must join Medicare plan that includes part D
Medicaid - correct answer ✔✔ A federal and state assistance program that pays for health care
services for people who cannot afford them. Low-income children, pregnant women, and
elderly. Pays long term care.
,Affordable Care Act - correct answer ✔✔ An expansion of medicaid, most of employers must
provide health insurance, have insurance or face surtax, prevents rejection based on pre-
existing condition. Also referred to as "Obamacare", signed into law in 2010. Make affordable
health insurance available to more people.
Payors - correct answer ✔✔ Employers, government, insurance companies, people who pay for
healthcare services
Charity Pay - correct answer ✔✔ Healthcare system received no reimbursement for services
Health Maintenance Organization (HMO) - correct answer ✔✔ an organization that provides
comprehensive medical care to subscribers for a fixed fee. Cost effective care focused on
preventative care. Network, group, staff and independent practice associations.
Preferred Provider Organization (PPO) - correct answer ✔✔ Group of healthcare providers that
provide services to a specific group, often at a reduced rate. Cost is higher to use out of network
provider. Help negotiate cost of services between the providers and purchasers.
Diagnosis Related Group (DRGs) - correct answer ✔✔ classifies patients by age, diagnosis,
surgical procedure, and other information with hundreds of different categories to predict the
use of hospital resources, including length of stay, resulting in a fixed payment amount
Prospective Payment Systems (PPS) - correct answer ✔✔ Required facilities providing services
to Medicare clients to be reimbursed using a fixed-rate system and included monetary
incentives to reduce the length of hospital stays.
(Based on diagnosis-related group (DRG) categories)
Social Health Maintenance Organization (SHMO) - correct answer ✔✔ special type of health
plan that provides the full range of Medicare benefits offered by standard Medicare HMOs, plus
other services that include the following: prescription drug and chronic care benefits, respite
,care, and short-term nursing home care; homemaker, personal care services, and medical
transportation; eyeglasses, hearing aids, and dental benefits
Pay for Performance (P4P) - correct answer ✔✔ performance-oriented incentives for hospitals
and physicians to improve the quality of patient healthcare. 4 quality measures - performance,
outcomes, patient satisfaction/experience, structures and technologies (EHR)
Value Based Purchasing - correct answer ✔✔ A pay for performance methodology used to
reimburse hospitals based on outcomes. Provided by Centers for Medicare and Medicaid
Services. Incentive payments to acute-care hospitals yearly based on total performance score
(TPS)
Budget Cycle - correct answer ✔✔ Includes development, monitoring, reporting, justifying and
variance analysis. Four types of budget - revenue, expense, capital, and operating
Revenue - correct answer ✔✔ anticipated amount of income during the budget period
Expense - correct answer ✔✔ salary and nonsalary, fixed costs (remain constant such as rental
fees and contract fees) and variable costs (fluctuate based on unit activity such as census and
acuity)
Capital - correct answer ✔✔ equipment and renovation expenses. lifespan of 1 year of greater.
consider cost of item, installation, shipping or delivery charges, service contracts. Amortization
(assigning cost of asset over its lifetime) Depreciation (expensing fixed assets annually)
Operating Budget - correct answer ✔✔ Annual budget. Based on past years unit activity
predicting for next year. Revenues and expenses for fiscal year.
How to create operating budget - correct answer ✔✔ Need productivity goals, patient days,
workload (HHPD - hours per patient day), HPPD/shift and staffing needs, non-productive hours,
productive/non-productive hours over time, non-labor costs. SALARY is number one expense.
, Patient Days - correct answer ✔✔ Total inpatient days for a year. Calculated by adding together
the daily patient census for 365 days. Daily census is typically the unit census at midnight.
Average Daily Census (ADC) - correct answer ✔✔ total patient days/number of calendar days.
Total patient days =3875. # of calendar days = 365. 3875/365 = 10.6 ADC.
Full Time Equivalency (FTE) - correct answer ✔✔ Established by the health care reform law to
aid in determining tax credits for employees. Utilized by employer to determine staffing needs
and cost-effectiveness. 2080 hours/year = 1.0 FTE
Hours Per Patient Day (HPPD) - correct answer ✔✔ Calculates the amount of nursing care
necessary per patient in a 24-hour period. Total productive hours/Total volume (ADC). 8-hour
shifts, 5 RNs, 1 LVN, 1 CNA and ADC of 28. 7 staff x 8 hours = 56 hours per shift. 56 hours x 3
shifts = 168 hours per day. 168/28 = 6 HPPD
Non-Productive Time - correct answer ✔✔ varies by benefit package at each organization.
Average is 12-20%. Calculate non-productive time. FTE = 2080 hours annually. 20% benefit time.
2080 x 0.8 = 1664 hours of productive time for patient care.
How many FTEs are needed to appropriately staff this unit? - correct answer ✔✔ ADC = 10.
Non-productive time is 12%.
HPPD = 15.
Calculate productive time per day 15x10=150.
Calculate productive time per year 150 x 365 = 54,750. Calculate FTE 54750/2080 = 26.3.
Calculate FTE utilizing non-productive time
2080 x 0.88 = 1830
54750/1830 = 29.9 FTEs to staff unit.
For Profit Organizations - correct answer ✔✔ Can lawfully release a patient who does not have
the ability to pay for services (after EMTALA). Serve lower income populations. Owned by
investors or shareholders. Large portion of budget allocated to marketing and advertising.
not-for-profit organizations - correct answer ✔✔ Must treat all conditions or people regardless
of insurance or ability to pay. Considered charities by IRS. Do not pay federal or state/local
property taxes. Obligation to the community.
Medicare - correct answer ✔✔ National Health Insurance program for people 65 and older,
disabled, and any age with ESRD.
Medicare A - correct answer ✔✔ Covers inpatient hospital stays, some hospice and home
health care, no monthly premium
Medicare B - correct answer ✔✔ Medical insurance, pays for doctor services and outpatient
services, PT/OT services. Monthly premium.
Medicare C - correct answer ✔✔ Often called the advantage plan or choice plan. Includes A and
B, most include D. May offer dental, vision, and wellness
Medicare D - correct answer ✔✔ Prescription drug coverage. Monthly premium. Available to
everyone, must join Medicare plan that includes part D
Medicaid - correct answer ✔✔ A federal and state assistance program that pays for health care
services for people who cannot afford them. Low-income children, pregnant women, and
elderly. Pays long term care.
,Affordable Care Act - correct answer ✔✔ An expansion of medicaid, most of employers must
provide health insurance, have insurance or face surtax, prevents rejection based on pre-
existing condition. Also referred to as "Obamacare", signed into law in 2010. Make affordable
health insurance available to more people.
Payors - correct answer ✔✔ Employers, government, insurance companies, people who pay for
healthcare services
Charity Pay - correct answer ✔✔ Healthcare system received no reimbursement for services
Health Maintenance Organization (HMO) - correct answer ✔✔ an organization that provides
comprehensive medical care to subscribers for a fixed fee. Cost effective care focused on
preventative care. Network, group, staff and independent practice associations.
Preferred Provider Organization (PPO) - correct answer ✔✔ Group of healthcare providers that
provide services to a specific group, often at a reduced rate. Cost is higher to use out of network
provider. Help negotiate cost of services between the providers and purchasers.
Diagnosis Related Group (DRGs) - correct answer ✔✔ classifies patients by age, diagnosis,
surgical procedure, and other information with hundreds of different categories to predict the
use of hospital resources, including length of stay, resulting in a fixed payment amount
Prospective Payment Systems (PPS) - correct answer ✔✔ Required facilities providing services
to Medicare clients to be reimbursed using a fixed-rate system and included monetary
incentives to reduce the length of hospital stays.
(Based on diagnosis-related group (DRG) categories)
Social Health Maintenance Organization (SHMO) - correct answer ✔✔ special type of health
plan that provides the full range of Medicare benefits offered by standard Medicare HMOs, plus
other services that include the following: prescription drug and chronic care benefits, respite
,care, and short-term nursing home care; homemaker, personal care services, and medical
transportation; eyeglasses, hearing aids, and dental benefits
Pay for Performance (P4P) - correct answer ✔✔ performance-oriented incentives for hospitals
and physicians to improve the quality of patient healthcare. 4 quality measures - performance,
outcomes, patient satisfaction/experience, structures and technologies (EHR)
Value Based Purchasing - correct answer ✔✔ A pay for performance methodology used to
reimburse hospitals based on outcomes. Provided by Centers for Medicare and Medicaid
Services. Incentive payments to acute-care hospitals yearly based on total performance score
(TPS)
Budget Cycle - correct answer ✔✔ Includes development, monitoring, reporting, justifying and
variance analysis. Four types of budget - revenue, expense, capital, and operating
Revenue - correct answer ✔✔ anticipated amount of income during the budget period
Expense - correct answer ✔✔ salary and nonsalary, fixed costs (remain constant such as rental
fees and contract fees) and variable costs (fluctuate based on unit activity such as census and
acuity)
Capital - correct answer ✔✔ equipment and renovation expenses. lifespan of 1 year of greater.
consider cost of item, installation, shipping or delivery charges, service contracts. Amortization
(assigning cost of asset over its lifetime) Depreciation (expensing fixed assets annually)
Operating Budget - correct answer ✔✔ Annual budget. Based on past years unit activity
predicting for next year. Revenues and expenses for fiscal year.
How to create operating budget - correct answer ✔✔ Need productivity goals, patient days,
workload (HHPD - hours per patient day), HPPD/shift and staffing needs, non-productive hours,
productive/non-productive hours over time, non-labor costs. SALARY is number one expense.
, Patient Days - correct answer ✔✔ Total inpatient days for a year. Calculated by adding together
the daily patient census for 365 days. Daily census is typically the unit census at midnight.
Average Daily Census (ADC) - correct answer ✔✔ total patient days/number of calendar days.
Total patient days =3875. # of calendar days = 365. 3875/365 = 10.6 ADC.
Full Time Equivalency (FTE) - correct answer ✔✔ Established by the health care reform law to
aid in determining tax credits for employees. Utilized by employer to determine staffing needs
and cost-effectiveness. 2080 hours/year = 1.0 FTE
Hours Per Patient Day (HPPD) - correct answer ✔✔ Calculates the amount of nursing care
necessary per patient in a 24-hour period. Total productive hours/Total volume (ADC). 8-hour
shifts, 5 RNs, 1 LVN, 1 CNA and ADC of 28. 7 staff x 8 hours = 56 hours per shift. 56 hours x 3
shifts = 168 hours per day. 168/28 = 6 HPPD
Non-Productive Time - correct answer ✔✔ varies by benefit package at each organization.
Average is 12-20%. Calculate non-productive time. FTE = 2080 hours annually. 20% benefit time.
2080 x 0.8 = 1664 hours of productive time for patient care.
How many FTEs are needed to appropriately staff this unit? - correct answer ✔✔ ADC = 10.
Non-productive time is 12%.
HPPD = 15.
Calculate productive time per day 15x10=150.
Calculate productive time per year 150 x 365 = 54,750. Calculate FTE 54750/2080 = 26.3.
Calculate FTE utilizing non-productive time
2080 x 0.88 = 1830
54750/1830 = 29.9 FTEs to staff unit.
