Nursing Home Administrator Exam Questions and
Verified Correct Answers – Latest 2025–2026
Questions with Rationales
1. The most likely single cause for the series of bankruptcies among larger nursing
home chains around the year 2000 was ____.
A. Too small increases in government reimbursement rates
B. Paying too much for acquisitions in 1998 and 1999
C. Not taking advantage of falling interest rates
D. Thinking too small
Answer: B
Rationale: Overexpansion and overpayment for acquisitions during the late 1990s
led to unsustainable debt when reimbursement failed to keep pace.
2. In a chance conversation with the owner of an eight-facility chain, the newly
hired administrator for the oldest facility in the chain indicates that, because the
mortgage is fully retired, the administrator will concentrate more on being
effective than efficient since the Quality Indicators are all at or above the state’s
average. The owner would likely _____.
A. Be pleased
B. Be distressed
C. Be content
D. Praise the newly hired administrator
Answer: B
Rationale: Efficiency (cost control) is critical even when a mortgage is paid off;
ignoring it can threaten profitability and long-term viability.
3. Occupancy of Facility A has been a steady 70% since the Prospective Payment
System was introduced. Two weeks ago, a new 120-bed, equally equipped facility
opened several blocks away. The Facility A administrator tells the admissions
counselor to continue the usual recruitment approach. The chain owners ought to
,_____.
A. Rest comfortably
B. Seek a new administrator
C. Appoint a new admissions counselor
D. Take no action
Answer: B
Rationale: New competition requires proactive marketing and admissions
strategies; continuing “business as usual” risks further occupancy decline.
4. Bankruptcies among larger nursing home chains prior to 2000 _____.
A. Were frequent
B. Were ubiquitous
C. Were highly unusual
D. Were routinely declared to avoid too much accumulated debt
Answer: C
Rationale: Before 2000, large-chain bankruptcies were rare; the wave of
bankruptcies around 2000 was a new phenomenon.
5. Under the Prospective Payment System, nursing facilities’ reimbursed costs
______.
A. Were about the same as previously
B. Were more bundled
C. Used an unbundled cost structure
D. Were reimbursement for actual costs
Answer: B
Rationale: PPS introduced bundled payments (e.g., RUGs) rather than cost-based
reimbursement.
6. In recent years, Medicare has ______.
A. Allowed facilities to make a modest profit
B. Shifted more costs onto nursing facilities
C. Eased up on economic pressures previously placed on facilities
D. Remained relatively unchanged in its reimbursement structure
,Answer: B
Rationale: Medicare has increasingly shifted financial risk to providers through
payment reductions and value-based purchasing.
7. The nurse newly promoted to director of nursing insists on giving four RN hours
of patient care each day on the Alzheimer’s wing in the 175-bed facility. The
administrator should ______.
A. Praise the new director of nursing for her resident centeredness
B. Appoint an assistant director of nursing
C. Adapt the job description to fit her pattern
D. Seek a new director of nursing
Answer: D
Rationale: Four RN hours per day on a single wing is likely cost-prohibitive and
may reflect unrealistic staffing expectations.
8. The applicant for the administrator position in a facility near a large teaching
hospital insists that, as before in his rural facility, if hired he would not let the
Medicare reimbursement policies affect his case mix. This applicant ______.
A. Should be hired
B. Is likely to succeed if hired
C. Can likely succeed in his goal
D. Is out of touch
Answer: D
Rationale: Case mix is directly affected by reimbursement policies; ignoring them
is unrealistic, especially in an urban teaching hospital environment.
9. The newly hired assistant to the administrator insists that the organizational
chart dotted line between this position and the Department of Nursing be a solid
line. The administrator should ______.
A. Agree in general
B. Agree to this special case
C. Ask the director of nursing for his or her opinion
D. Be forewarned
, Answer: D
Rationale: Insisting on a solid line (direct authority) over nursing may indicate a
power struggle and lack of understanding of proper chain of command.
10. The medical supplies provider tells the administrator of a facility that has not
paid bills for the past 3 months but is now operating under a bankruptcy judge’s
approved plan for restructuring, that no more deliveries will be made until past
bills are fully paid. The medical supplies provider ______.
A. Is smart to cut losses at that point
B. Does not understand how bankruptcy works
C. Will now likely get his past due bills paid
D. Is farsighted
Answer: B
Rationale: Under bankruptcy protection, past debts are subject to court-approved
plans; refusing delivery can violate automatic stay provisions.
11. An administrator who adopts the leadership-by-walking-around (LBWA)
approach by walking through the facility weekly and intently observing has
______.
A. Become an effective leader
B. Chosen a good management style
C. Failed to understand LBWA
D. Implemented a useful strategy
Answer: C
Rationale: LBWA requires frequent, informal, daily interaction – not weekly
scheduled tours.
12. The nursing facility administrator who, using the
leadership-by-walking-around (LBWA) technique, succeeds in actually making
appropriate corrections on the spot during her rounds ______.
A. Is effectively implementing the concept
B. Gains additional power through the process
Verified Correct Answers – Latest 2025–2026
Questions with Rationales
1. The most likely single cause for the series of bankruptcies among larger nursing
home chains around the year 2000 was ____.
A. Too small increases in government reimbursement rates
B. Paying too much for acquisitions in 1998 and 1999
C. Not taking advantage of falling interest rates
D. Thinking too small
Answer: B
Rationale: Overexpansion and overpayment for acquisitions during the late 1990s
led to unsustainable debt when reimbursement failed to keep pace.
2. In a chance conversation with the owner of an eight-facility chain, the newly
hired administrator for the oldest facility in the chain indicates that, because the
mortgage is fully retired, the administrator will concentrate more on being
effective than efficient since the Quality Indicators are all at or above the state’s
average. The owner would likely _____.
A. Be pleased
B. Be distressed
C. Be content
D. Praise the newly hired administrator
Answer: B
Rationale: Efficiency (cost control) is critical even when a mortgage is paid off;
ignoring it can threaten profitability and long-term viability.
3. Occupancy of Facility A has been a steady 70% since the Prospective Payment
System was introduced. Two weeks ago, a new 120-bed, equally equipped facility
opened several blocks away. The Facility A administrator tells the admissions
counselor to continue the usual recruitment approach. The chain owners ought to
,_____.
A. Rest comfortably
B. Seek a new administrator
C. Appoint a new admissions counselor
D. Take no action
Answer: B
Rationale: New competition requires proactive marketing and admissions
strategies; continuing “business as usual” risks further occupancy decline.
4. Bankruptcies among larger nursing home chains prior to 2000 _____.
A. Were frequent
B. Were ubiquitous
C. Were highly unusual
D. Were routinely declared to avoid too much accumulated debt
Answer: C
Rationale: Before 2000, large-chain bankruptcies were rare; the wave of
bankruptcies around 2000 was a new phenomenon.
5. Under the Prospective Payment System, nursing facilities’ reimbursed costs
______.
A. Were about the same as previously
B. Were more bundled
C. Used an unbundled cost structure
D. Were reimbursement for actual costs
Answer: B
Rationale: PPS introduced bundled payments (e.g., RUGs) rather than cost-based
reimbursement.
6. In recent years, Medicare has ______.
A. Allowed facilities to make a modest profit
B. Shifted more costs onto nursing facilities
C. Eased up on economic pressures previously placed on facilities
D. Remained relatively unchanged in its reimbursement structure
,Answer: B
Rationale: Medicare has increasingly shifted financial risk to providers through
payment reductions and value-based purchasing.
7. The nurse newly promoted to director of nursing insists on giving four RN hours
of patient care each day on the Alzheimer’s wing in the 175-bed facility. The
administrator should ______.
A. Praise the new director of nursing for her resident centeredness
B. Appoint an assistant director of nursing
C. Adapt the job description to fit her pattern
D. Seek a new director of nursing
Answer: D
Rationale: Four RN hours per day on a single wing is likely cost-prohibitive and
may reflect unrealistic staffing expectations.
8. The applicant for the administrator position in a facility near a large teaching
hospital insists that, as before in his rural facility, if hired he would not let the
Medicare reimbursement policies affect his case mix. This applicant ______.
A. Should be hired
B. Is likely to succeed if hired
C. Can likely succeed in his goal
D. Is out of touch
Answer: D
Rationale: Case mix is directly affected by reimbursement policies; ignoring them
is unrealistic, especially in an urban teaching hospital environment.
9. The newly hired assistant to the administrator insists that the organizational
chart dotted line between this position and the Department of Nursing be a solid
line. The administrator should ______.
A. Agree in general
B. Agree to this special case
C. Ask the director of nursing for his or her opinion
D. Be forewarned
, Answer: D
Rationale: Insisting on a solid line (direct authority) over nursing may indicate a
power struggle and lack of understanding of proper chain of command.
10. The medical supplies provider tells the administrator of a facility that has not
paid bills for the past 3 months but is now operating under a bankruptcy judge’s
approved plan for restructuring, that no more deliveries will be made until past
bills are fully paid. The medical supplies provider ______.
A. Is smart to cut losses at that point
B. Does not understand how bankruptcy works
C. Will now likely get his past due bills paid
D. Is farsighted
Answer: B
Rationale: Under bankruptcy protection, past debts are subject to court-approved
plans; refusing delivery can violate automatic stay provisions.
11. An administrator who adopts the leadership-by-walking-around (LBWA)
approach by walking through the facility weekly and intently observing has
______.
A. Become an effective leader
B. Chosen a good management style
C. Failed to understand LBWA
D. Implemented a useful strategy
Answer: C
Rationale: LBWA requires frequent, informal, daily interaction – not weekly
scheduled tours.
12. The nursing facility administrator who, using the
leadership-by-walking-around (LBWA) technique, succeeds in actually making
appropriate corrections on the spot during her rounds ______.
A. Is effectively implementing the concept
B. Gains additional power through the process
