Page 1 of 98
MHA 706 Final Exam with Complete
questions and correct verified answers
(detailed answers) already Graded A+
1. A hospital’s total operating revenue is $150M, operating
expenses are $140M, and non-operating income is $5M.
What is the operating margin?
• A) 3.33%
• B) 6.67%
• C) 10.0%
• D) 7.14%
Correct Answer: B) 6.67%
Rationale: Operating margin = (Operating revenue –
Operating expenses) / Operating revenue = ($150M –
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$140M)/$150M = $10M/$150M = 0.0667 = 6.67%. Non-
operating income is excluded from operating margin.
2. Which payment model gives providers a fixed amount per
patient per month regardless of services used?
• A) Fee-for-service
• B) Capitation
• C) Bundled payment
• D) Discounted fee-for-service
Correct Answer: B) Capitation
Rationale: Capitation is a risk-based payment where providers
receive a fixed PMPM (per member per month) amount. FFS
pays per service; bundled pays for an episode.
3. Scenario: A clinic has fixed costs of $5M, variable cost per
visit is $500, and revenue per visit is $800. How many visits
are needed to break even?
• A) 6,250
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• B) 10,000
• C) 16,667
• D) 20,000
Correct Answer: C) 16,667
Rationale: Break-even volume = Fixed costs / (Price – Variable
cost) = $5,000,000 / ($800 – $500) = 5,000,000/300 =
16,666.67 ≈ 16,667 visits.
4. What is the primary purpose of a chargemaster?
• A) Track patient satisfaction
• B) List all billable items and services with prices
• C) Manage staff schedules
• D) Record clinical outcomes
Correct Answer: B) List all billable items and services with
prices
Rationale: The chargemaster is the hospital’s master price list
for billing. It is the foundation for claims submission.
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5. A hospital’s days in accounts receivable (AR) is 55, and its
average daily net patient revenue is $2M. What is the total
AR?
• A) $55M
• B) $110M
• C) $27.5M
• D) $2.75M
Correct Answer: B) $110M
Rationale: Days in AR = (Total AR / Average daily revenue).
So Total AR = Days × Avg daily revenue = 55 × $2M =
$110M.
6. Which of the following is a volume-based metric?
• A) Operating margin
• B) Length of stay
• C) Inpatient admissions
• D) Readmission rate
MHA 706 Final Exam with Complete
questions and correct verified answers
(detailed answers) already Graded A+
1. A hospital’s total operating revenue is $150M, operating
expenses are $140M, and non-operating income is $5M.
What is the operating margin?
• A) 3.33%
• B) 6.67%
• C) 10.0%
• D) 7.14%
Correct Answer: B) 6.67%
Rationale: Operating margin = (Operating revenue –
Operating expenses) / Operating revenue = ($150M –
,Page 2 of 98
$140M)/$150M = $10M/$150M = 0.0667 = 6.67%. Non-
operating income is excluded from operating margin.
2. Which payment model gives providers a fixed amount per
patient per month regardless of services used?
• A) Fee-for-service
• B) Capitation
• C) Bundled payment
• D) Discounted fee-for-service
Correct Answer: B) Capitation
Rationale: Capitation is a risk-based payment where providers
receive a fixed PMPM (per member per month) amount. FFS
pays per service; bundled pays for an episode.
3. Scenario: A clinic has fixed costs of $5M, variable cost per
visit is $500, and revenue per visit is $800. How many visits
are needed to break even?
• A) 6,250
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• B) 10,000
• C) 16,667
• D) 20,000
Correct Answer: C) 16,667
Rationale: Break-even volume = Fixed costs / (Price – Variable
cost) = $5,000,000 / ($800 – $500) = 5,000,000/300 =
16,666.67 ≈ 16,667 visits.
4. What is the primary purpose of a chargemaster?
• A) Track patient satisfaction
• B) List all billable items and services with prices
• C) Manage staff schedules
• D) Record clinical outcomes
Correct Answer: B) List all billable items and services with
prices
Rationale: The chargemaster is the hospital’s master price list
for billing. It is the foundation for claims submission.
, Page 4 of 98
5. A hospital’s days in accounts receivable (AR) is 55, and its
average daily net patient revenue is $2M. What is the total
AR?
• A) $55M
• B) $110M
• C) $27.5M
• D) $2.75M
Correct Answer: B) $110M
Rationale: Days in AR = (Total AR / Average daily revenue).
So Total AR = Days × Avg daily revenue = 55 × $2M =
$110M.
6. Which of the following is a volume-based metric?
• A) Operating margin
• B) Length of stay
• C) Inpatient admissions
• D) Readmission rate
