ACHE BOARD OF GOVERNORS
HEALTHCARE EXECUTIVE
EXAM STUDY GUIDE 200
FACHE CERTIFICATION BOARD
PRACTICE QUESTIONS
ACHE Board of Governors Exam
Question 1
A community hospital is experiencing structural financial losses due to
shifting payer demographics and low reimbursement rates. The Chief
Executive Officer (CEO) initiates an institutional transition to Value-
Based Care (VBC). Under a capitated payment model, which structural
mechanism shifts financial risk to the healthcare organization?
• A) The payer compensates the provider for each distinct diagnostic
procedure performed.
• B) The hospital receives a fixed percentage of its annual historical
operating expenditures.
• C) The organization receives a fixed, predetermined
monthly payment per enrolled patient regardless of
utilization.
• D) The provider is penalized only if the total readmission rate
exceeds the national median.
Rationale: Capitation is a foundational financing model in Value-Based
Care where the healthcare provider receives a fixed amount of money
per patient per unit of time (per member per month, PMPM) to deliver
specified services. This shifts financial risk onto the provider because if
the cost of care for the enrolled population exceeds the capitated pool,
the healthcare organization must absorb the financial deficit.
,Question 2
The Chief Financial Officer (CFO) of an integrated delivery system is
calculating the organization’s Days Cash on Hand to assess short-term
liquidity. The organization has $15,000,000 in cash and short-term
investments. Total annual operating expenses are $120,000,000, which
includes $10,000,000 in non-cash depreciation and amortization
expenses. What is the organization’s Days Cash on Hand?
• A) 32.5 days
• B) 45.6 days
• C) 49.8 days
• D) 53.4 days
Rationale: To calculate Days Cash on Hand, first determine the daily
cash operating expenses by subtracting non-cash expenses
(depreciation and amortization) from total operating expenses and
dividing by 365 days. Here,
,per day. Next, divide total cash and short-term investments by the
daily cash operating expense:
days, which rounds to 49.8 days.
Question 3
A large multi-specialty physician practice wants to establish a
collaborative clinical venture with a local acute care hospital. The
practice manager notes that the transaction must comply with the
federal Stark Law. Which arrangement represents a core violation of the
Stark Law?
• A) A hospital leases administrative office space to a physician
group at verified fair market value.
, • B) A physician refers a Medicare patient to an independent
physical therapy clinic with no shared financial ties.
• C) A primary care physician refers a Medicare patient for
an MRI at an imaging center owned by the physician’s
immediate spouse.
• D) A hospital provides a recruitment bonus to a new family
medicine physician moving into an underserved area.
Rationale: The Stark Law (Physician Self-Referral Law) strictly
prohibits a physician from making referrals for designated health
services (DHS)—which includes radiology and imaging services—
payable by Medicare or Medicaid to an entity with which the physician
or an immediate family member has a financial relationship, unless a
specific exception applies.
Question 4
A healthcare organization’s Board of Trustees wants to evaluate the
quality of its governance structure. According to contemporary
healthcare governance standards, what is the primary fiduciary
responsibility of a non-profit healthcare Board?
• A) Overseeing the day-to-day scheduling of clinical and nursing
staff.
• B) Safeguarding institutional assets, ensuring legal
compliance, and selecting and evaluating the CEO.
• C) Directly negotiating collective bargaining agreements with local
labor unions.
• D) Reviewing and approving individual medical records for
insurance reimbursement.
Rationale: The Board of Trustees of a non-profit healthcare
organization holds ultimate fiduciary responsibility for the institution.
Its core duties include protecting institutional assets, ensuring the
organization fulfills its charitable mission, maintaining legal and
regulatory compliance, and executing the hiring, performance
evaluation, and potential termination of the Chief Executive Officer.
HEALTHCARE EXECUTIVE
EXAM STUDY GUIDE 200
FACHE CERTIFICATION BOARD
PRACTICE QUESTIONS
ACHE Board of Governors Exam
Question 1
A community hospital is experiencing structural financial losses due to
shifting payer demographics and low reimbursement rates. The Chief
Executive Officer (CEO) initiates an institutional transition to Value-
Based Care (VBC). Under a capitated payment model, which structural
mechanism shifts financial risk to the healthcare organization?
• A) The payer compensates the provider for each distinct diagnostic
procedure performed.
• B) The hospital receives a fixed percentage of its annual historical
operating expenditures.
• C) The organization receives a fixed, predetermined
monthly payment per enrolled patient regardless of
utilization.
• D) The provider is penalized only if the total readmission rate
exceeds the national median.
Rationale: Capitation is a foundational financing model in Value-Based
Care where the healthcare provider receives a fixed amount of money
per patient per unit of time (per member per month, PMPM) to deliver
specified services. This shifts financial risk onto the provider because if
the cost of care for the enrolled population exceeds the capitated pool,
the healthcare organization must absorb the financial deficit.
,Question 2
The Chief Financial Officer (CFO) of an integrated delivery system is
calculating the organization’s Days Cash on Hand to assess short-term
liquidity. The organization has $15,000,000 in cash and short-term
investments. Total annual operating expenses are $120,000,000, which
includes $10,000,000 in non-cash depreciation and amortization
expenses. What is the organization’s Days Cash on Hand?
• A) 32.5 days
• B) 45.6 days
• C) 49.8 days
• D) 53.4 days
Rationale: To calculate Days Cash on Hand, first determine the daily
cash operating expenses by subtracting non-cash expenses
(depreciation and amortization) from total operating expenses and
dividing by 365 days. Here,
,per day. Next, divide total cash and short-term investments by the
daily cash operating expense:
days, which rounds to 49.8 days.
Question 3
A large multi-specialty physician practice wants to establish a
collaborative clinical venture with a local acute care hospital. The
practice manager notes that the transaction must comply with the
federal Stark Law. Which arrangement represents a core violation of the
Stark Law?
• A) A hospital leases administrative office space to a physician
group at verified fair market value.
, • B) A physician refers a Medicare patient to an independent
physical therapy clinic with no shared financial ties.
• C) A primary care physician refers a Medicare patient for
an MRI at an imaging center owned by the physician’s
immediate spouse.
• D) A hospital provides a recruitment bonus to a new family
medicine physician moving into an underserved area.
Rationale: The Stark Law (Physician Self-Referral Law) strictly
prohibits a physician from making referrals for designated health
services (DHS)—which includes radiology and imaging services—
payable by Medicare or Medicaid to an entity with which the physician
or an immediate family member has a financial relationship, unless a
specific exception applies.
Question 4
A healthcare organization’s Board of Trustees wants to evaluate the
quality of its governance structure. According to contemporary
healthcare governance standards, what is the primary fiduciary
responsibility of a non-profit healthcare Board?
• A) Overseeing the day-to-day scheduling of clinical and nursing
staff.
• B) Safeguarding institutional assets, ensuring legal
compliance, and selecting and evaluating the CEO.
• C) Directly negotiating collective bargaining agreements with local
labor unions.
• D) Reviewing and approving individual medical records for
insurance reimbursement.
Rationale: The Board of Trustees of a non-profit healthcare
organization holds ultimate fiduciary responsibility for the institution.
Its core duties include protecting institutional assets, ensuring the
organization fulfills its charitable mission, maintaining legal and
regulatory compliance, and executing the hiring, performance
evaluation, and potential termination of the Chief Executive Officer.
