FACHE ACHE Board of Governors BOG
Exam ACTUAL EXAM 2026/2027 | FACHE
BOG Certification | Verified Q&A | Pass
Guaranteed - A+ Graded
Section 1 – Questions 1–60
Q1. As a hospital CEO, you are reviewing your organization's governance structure. The board has asked
you to implement a policy requiring that a majority of board members be independent. This
requirement aligns most closely with which governance principle?
A. The board should include only community leaders with no healthcare experience to ensure
objectivity.
B. Independence reduces conflicts of interest and strengthens oversight of management.
[CORRECT]
C. Independent boards are required by the Affordable Care Act for all nonprofit hospitals.
D. Board independence is only relevant for publicly traded health systems.
Correct Answer: B
Rationale: B is correct because independent board members—those without material financial or
familial ties to the organization—are a cornerstone of effective governance, reducing conflicts of
interest and enabling objective oversight of executive performance, strategy, and risk management. This
principle is emphasized in ACHE governance standards and IRS guidelines for 501(c)(3) hospitals. A is
wrong because while independence matters, boards also need healthcare expertise; excluding all
experience would weaken strategic guidance. C is wrong because the ACA requires community health
needs assessments (CHNAs) and financial assistance policies, not specific board independence ratios. D
is wrong because independence is critical for all governance models, including nonprofit and private
systems, not just publicly traded entities.
Q2. A health system is considering a joint venture with a physician group. Under the Stark Law, which of
the following arrangements would most likely trigger a violation?
, A. The hospital leases office space to the physicians at fair market value with a written
agreement.
B. The hospital provides free billing services to physicians who refer Medicare patients
exclusively to that hospital. [CORRECT]
C. The hospital pays physicians for on-call coverage at rates consistent with market benchmarks.
D. The hospital and physicians co-invest in an ambulatory surgery center with proportional
returns.
Correct Answer: B
Rationale: B is correct because the Stark Law prohibits physician self-referral for designated health
services (DHS) paid by Medicare/Medicaid if a financial relationship exists, and free services constitute
improper remuneration unless an exception applies (e.g., fair market value compensation, isolated
transactions). Free billing services tied to referral volume violate the "volume or value" standard. A is
wrong because space leases at FMV with written agreements qualify for the Stark exception. C is wrong
because fair market value on-call payments under a personal services arrangement are permissible. D is
wrong because bona fide joint ventures with proportional, FMV returns may qualify for the whole
hospital or ambulatory surgery center exception if structured properly.
Q3. Exhibit: A hospital's dashboard shows the following financial ratios for FY2026:
Current ratio: 1.2
Days cash on hand: 45
Debt service coverage ratio: 2.5
Operating margin: -2.5%
Which of these indicators presents the most immediate concern to the board finance committee?
A. Current ratio of 1.2, as it indicates severe liquidity crisis.
B. Days cash on hand of 45, which is below the 60-day benchmark for operational stability.
[CORRECT]
C. Debt service coverage ratio of 2.5, suggesting inability to meet debt obligations.
D. Operating margin of -2.5%, which is typical for nonprofit hospitals and not concerning.
Correct Answer: B
Rationale: B is correct because days cash on hand (DCOH) of 45 days falls below the industry safety
threshold of approximately 60–80 days for hospitals, indicating limited liquidity to weather revenue
,disruptions, capital needs, or emergencies; this is an immediate operational risk. A is wrong because a
current ratio of 1.2, while not robust, is adequate for hospitals (industry average ~1.5–2.0) and does not
indicate a "severe" crisis. C is wrong because a DSCR of 2.5 is strong (lenders typically require ≥1.25),
showing comfortable debt coverage. D is wrong because while some nonprofits operate near
breakeven, a negative operating margin is unsustainable long-term and requires corrective action; it is
not "typical and not concerning."
Q4. A nurse manager reports that patient falls on a medical-surgical unit have increased 30% over the
past quarter. As the Chief Nursing Officer, your first step in addressing this patient safety issue should
be:
A. Immediately suspend the unit nursing staff pending investigation.
B. Conduct a root cause analysis (RCA) to identify system factors contributing to falls. [CORRECT]
C. Increase the nurse-to-patient ratio across all units as a preventive measure.
D. Report the increase to the state health department as a mandatory adverse event.
Correct Answer: B
Rationale: B is correct because the Joint Commission and IHI recommend root cause analysis as the
foundational response to safety trend increases; RCA examines processes, environmental factors,
staffing patterns, communication gaps, and technology failures rather than blaming individuals. A is
wrong because punitive responses to system failures violate just culture principles, reduce incident
reporting, and fail to address underlying causes. C is wrong because while staffing may be a factor,
blanket ratio increases without data-driven analysis are financially inefficient and may not target the
actual causes (e.g., call light response times, mobility protocols, medication side effects). D is wrong
because falls are not universally mandatory reportable events to state agencies unless they result in
serious injury or death; the first step is internal analysis, not external reporting.
Q5. Under the Emergency Medical Treatment and Labor Act (EMTALA), a hospital with a dedicated
emergency department must:
A. Provide comprehensive primary care to all uninsured patients in the community.
B. Screen all patients who come to the ED for emergency medical conditions and stabilize before
transfer or discharge. [CORRECT]
C. Admit all ED patients who request inpatient care regardless of medical necessity.
D. Transfer unstable patients to any receiving hospital that accepts them, without prior
agreement.
, Correct Answer: B
Rationale: B is correct because EMTALA mandates a medical screening examination (MSE) to detect
emergency medical conditions (EMCs) and requires stabilization or appropriate transfer with informed
consent and acceptance from the receiving facility; this applies to all patients regardless of ability to pay.
A is wrong because EMTALA addresses emergency stabilization, not primary care or community health
services. C is wrong because admission decisions are based on medical necessity and physician
judgment, not patient request alone. D is wrong because EMTALA requires the receiving hospital to be
capable of treating the condition and to accept the transfer; unilateral transfer of unstable patients
violates the law.
Q6. A health system is implementing a new electronic health record (EHR) system. The Chief Information
Officer projects a 24-month implementation timeline. From an operations management perspective,
which factor is most critical to monitor during months 12–18 to ensure project success?
A. Vendor contract renegotiation to reduce licensing fees.
B. Physician and staff adoption rates and workflow integration metrics. [CORRECT]
C. Marketing the EHR capabilities to external payers.
D. Immediate decommissioning of the legacy system to force rapid transition.
Correct Answer: B
Rationale: B is correct because the "implementation chasm" (months 12–18) is when EHR projects
typically face the greatest risk of failure due to user resistance, workflow disruption, and productivity
decline; monitoring adoption rates, training completion, order entry patterns, and clinician satisfaction
is essential to achieving go-live readiness and return on investment. A is wrong because contract
renegotiation is a procurement activity best handled before implementation, not during the critical
adoption phase. C is wrong because payer marketing is irrelevant to internal implementation success
and may distract from change management. D is wrong because abrupt legacy decommissioning
without confirmed adoption creates patient safety risks, data loss, and operational chaos; parallel
running is standard practice.
Q7. Exhibit: A community hospital's staffing matrix for ICU registered nurses shows:
Budgeted FTEs: 25.0
Actual filled FTEs: 21.5
Patient census (average daily): 18
Target nurse-to-patient ratio: 1:2
Exam ACTUAL EXAM 2026/2027 | FACHE
BOG Certification | Verified Q&A | Pass
Guaranteed - A+ Graded
Section 1 – Questions 1–60
Q1. As a hospital CEO, you are reviewing your organization's governance structure. The board has asked
you to implement a policy requiring that a majority of board members be independent. This
requirement aligns most closely with which governance principle?
A. The board should include only community leaders with no healthcare experience to ensure
objectivity.
B. Independence reduces conflicts of interest and strengthens oversight of management.
[CORRECT]
C. Independent boards are required by the Affordable Care Act for all nonprofit hospitals.
D. Board independence is only relevant for publicly traded health systems.
Correct Answer: B
Rationale: B is correct because independent board members—those without material financial or
familial ties to the organization—are a cornerstone of effective governance, reducing conflicts of
interest and enabling objective oversight of executive performance, strategy, and risk management. This
principle is emphasized in ACHE governance standards and IRS guidelines for 501(c)(3) hospitals. A is
wrong because while independence matters, boards also need healthcare expertise; excluding all
experience would weaken strategic guidance. C is wrong because the ACA requires community health
needs assessments (CHNAs) and financial assistance policies, not specific board independence ratios. D
is wrong because independence is critical for all governance models, including nonprofit and private
systems, not just publicly traded entities.
Q2. A health system is considering a joint venture with a physician group. Under the Stark Law, which of
the following arrangements would most likely trigger a violation?
, A. The hospital leases office space to the physicians at fair market value with a written
agreement.
B. The hospital provides free billing services to physicians who refer Medicare patients
exclusively to that hospital. [CORRECT]
C. The hospital pays physicians for on-call coverage at rates consistent with market benchmarks.
D. The hospital and physicians co-invest in an ambulatory surgery center with proportional
returns.
Correct Answer: B
Rationale: B is correct because the Stark Law prohibits physician self-referral for designated health
services (DHS) paid by Medicare/Medicaid if a financial relationship exists, and free services constitute
improper remuneration unless an exception applies (e.g., fair market value compensation, isolated
transactions). Free billing services tied to referral volume violate the "volume or value" standard. A is
wrong because space leases at FMV with written agreements qualify for the Stark exception. C is wrong
because fair market value on-call payments under a personal services arrangement are permissible. D is
wrong because bona fide joint ventures with proportional, FMV returns may qualify for the whole
hospital or ambulatory surgery center exception if structured properly.
Q3. Exhibit: A hospital's dashboard shows the following financial ratios for FY2026:
Current ratio: 1.2
Days cash on hand: 45
Debt service coverage ratio: 2.5
Operating margin: -2.5%
Which of these indicators presents the most immediate concern to the board finance committee?
A. Current ratio of 1.2, as it indicates severe liquidity crisis.
B. Days cash on hand of 45, which is below the 60-day benchmark for operational stability.
[CORRECT]
C. Debt service coverage ratio of 2.5, suggesting inability to meet debt obligations.
D. Operating margin of -2.5%, which is typical for nonprofit hospitals and not concerning.
Correct Answer: B
Rationale: B is correct because days cash on hand (DCOH) of 45 days falls below the industry safety
threshold of approximately 60–80 days for hospitals, indicating limited liquidity to weather revenue
,disruptions, capital needs, or emergencies; this is an immediate operational risk. A is wrong because a
current ratio of 1.2, while not robust, is adequate for hospitals (industry average ~1.5–2.0) and does not
indicate a "severe" crisis. C is wrong because a DSCR of 2.5 is strong (lenders typically require ≥1.25),
showing comfortable debt coverage. D is wrong because while some nonprofits operate near
breakeven, a negative operating margin is unsustainable long-term and requires corrective action; it is
not "typical and not concerning."
Q4. A nurse manager reports that patient falls on a medical-surgical unit have increased 30% over the
past quarter. As the Chief Nursing Officer, your first step in addressing this patient safety issue should
be:
A. Immediately suspend the unit nursing staff pending investigation.
B. Conduct a root cause analysis (RCA) to identify system factors contributing to falls. [CORRECT]
C. Increase the nurse-to-patient ratio across all units as a preventive measure.
D. Report the increase to the state health department as a mandatory adverse event.
Correct Answer: B
Rationale: B is correct because the Joint Commission and IHI recommend root cause analysis as the
foundational response to safety trend increases; RCA examines processes, environmental factors,
staffing patterns, communication gaps, and technology failures rather than blaming individuals. A is
wrong because punitive responses to system failures violate just culture principles, reduce incident
reporting, and fail to address underlying causes. C is wrong because while staffing may be a factor,
blanket ratio increases without data-driven analysis are financially inefficient and may not target the
actual causes (e.g., call light response times, mobility protocols, medication side effects). D is wrong
because falls are not universally mandatory reportable events to state agencies unless they result in
serious injury or death; the first step is internal analysis, not external reporting.
Q5. Under the Emergency Medical Treatment and Labor Act (EMTALA), a hospital with a dedicated
emergency department must:
A. Provide comprehensive primary care to all uninsured patients in the community.
B. Screen all patients who come to the ED for emergency medical conditions and stabilize before
transfer or discharge. [CORRECT]
C. Admit all ED patients who request inpatient care regardless of medical necessity.
D. Transfer unstable patients to any receiving hospital that accepts them, without prior
agreement.
, Correct Answer: B
Rationale: B is correct because EMTALA mandates a medical screening examination (MSE) to detect
emergency medical conditions (EMCs) and requires stabilization or appropriate transfer with informed
consent and acceptance from the receiving facility; this applies to all patients regardless of ability to pay.
A is wrong because EMTALA addresses emergency stabilization, not primary care or community health
services. C is wrong because admission decisions are based on medical necessity and physician
judgment, not patient request alone. D is wrong because EMTALA requires the receiving hospital to be
capable of treating the condition and to accept the transfer; unilateral transfer of unstable patients
violates the law.
Q6. A health system is implementing a new electronic health record (EHR) system. The Chief Information
Officer projects a 24-month implementation timeline. From an operations management perspective,
which factor is most critical to monitor during months 12–18 to ensure project success?
A. Vendor contract renegotiation to reduce licensing fees.
B. Physician and staff adoption rates and workflow integration metrics. [CORRECT]
C. Marketing the EHR capabilities to external payers.
D. Immediate decommissioning of the legacy system to force rapid transition.
Correct Answer: B
Rationale: B is correct because the "implementation chasm" (months 12–18) is when EHR projects
typically face the greatest risk of failure due to user resistance, workflow disruption, and productivity
decline; monitoring adoption rates, training completion, order entry patterns, and clinician satisfaction
is essential to achieving go-live readiness and return on investment. A is wrong because contract
renegotiation is a procurement activity best handled before implementation, not during the critical
adoption phase. C is wrong because payer marketing is irrelevant to internal implementation success
and may distract from change management. D is wrong because abrupt legacy decommissioning
without confirmed adoption creates patient safety risks, data loss, and operational chaos; parallel
running is standard practice.
Q7. Exhibit: A community hospital's staffing matrix for ICU registered nurses shows:
Budgeted FTEs: 25.0
Actual filled FTEs: 21.5
Patient census (average daily): 18
Target nurse-to-patient ratio: 1:2
