MHA 706 Midterm- Lord
Proprietorships & Partnerships: Pros & Cons - answer Pros: Ease of Information,
Subject to a few regulations, no corporation income taxes.
Cons: Limited life, difficult to transfer, unlimited life, difficult to raise capital.
Corporations: Pros & Cons - answer Pros: Unlimited life, easy transfer of ownership,
limited liability, ease of raising capital.
Cons: Cost of formation and reporting, double or triple taxes must be paid.
Non-profit Organization - answer Exempt from taxes. Goal is to improve community.
For-profit Organizations - answer (Investor Owned) Goal is to maximize shareholder
return. Owe taxes.
Agency Problem - answer the possibility of conflict of interest between the stockholders
and management of a firm.
Example: Hire someone to carry out a job function, but they go out of their interests
instead of best interests of company/organization.
Third-party payor system in the US (i.e. private vs public) - answerPrivate: Blue Cross
Blue Shield, Commercial Insurers, Self-Insurers. (AETNA)
Public: Medicare and Medicaid-both offer services to different levels. "Safety net"
Lowest reimbursement rates.
Reimbursement methods (fee-for-service vs. capitation) - answerFee for Service:
payment is tied to amount of services provided. (Decades ago) *Dental industry*
Capitation: payment is tied to the size of the covered population (number of enrollees)
Payment is based on per # per month. *Decreasing utilization* Population is healthier.
Medicare reimbursement for different types of providers - answerMedicare parts A, B &
C.
Medicare Part A (aka Hospital Insurance or HI) - answerProvides hospital insurance
automatically at age 65 (if FICA qualified) at no fee but may have deductible & co-pay.
Medicare Part B - answerThe part of the Medicare program that pays for physician
services, outpatient hospital services, durable medical equipment, and other services
and supplies.
, Medicare Part C (Medicare Advantage) - answer•Replaces and covers expenses found
in Part A and B
•Medicare private fee-for-service plans (PFFS)
•Medicare managed care plans (HMOs and PPOs)
•Medicare specialty plans
Medicare—Part D Prescription Drug Coverage - answera United States federal-
government program to subsidize the costs of prescription drugs and prescription drug
insurance premiums for Medicare beneficiaries.
Impact of the Affordable Care Act (what the bill changed about the healthcare
environment) - answerCreated new standards, individual mandates, exchanges, and
Medicaid expansion.
Focused on quality through clinical compensation, bundled payment, value-based
purchasing.
Regulations and standards of financial accounting (e.g. SEC, GAAP, FASB) - answer-
Securities and Exchange Commission (SEC): has the legal authority to regulate the
form and content of financial statements.
-Financial Accounting Standards Board (FASB)
-Generally Accepted Accounting Principles (GAAP): the conventions that have evolved
from the pronouncements and rulings of the implementing organizations constitute a set
of guidelines for the preparation of financial accounting statements. -ONLY applies only
to financial accounting statements. Does NOT remain STATIC.
GAAP (Generally Accepted Accounting Principles) - answerSplit into 3 categories:
Assumptions, Principles, & Constraints
Assumptions of GAAP - answereconomic entity, monetary unit, periodicity, going
concern
Principles of GAAP - answerhistorical cost, revenue recognition, expense recognition
(matching), full disclosure
Constraints of GAAP - answerMateriality & Cost-benefit
Accrual Accounting - answerAccounting that records the impact of a business event as
it occurs, regardless of whether the transaction affected cash.
*More complicated, provides a better picture of true economic status of a business, is
required by GAAP. Record revenue at the point of time
Cash Accounting - answeraccounting that recognizes business transactions only when
cash is received or disbursed.
Proprietorships & Partnerships: Pros & Cons - answer Pros: Ease of Information,
Subject to a few regulations, no corporation income taxes.
Cons: Limited life, difficult to transfer, unlimited life, difficult to raise capital.
Corporations: Pros & Cons - answer Pros: Unlimited life, easy transfer of ownership,
limited liability, ease of raising capital.
Cons: Cost of formation and reporting, double or triple taxes must be paid.
Non-profit Organization - answer Exempt from taxes. Goal is to improve community.
For-profit Organizations - answer (Investor Owned) Goal is to maximize shareholder
return. Owe taxes.
Agency Problem - answer the possibility of conflict of interest between the stockholders
and management of a firm.
Example: Hire someone to carry out a job function, but they go out of their interests
instead of best interests of company/organization.
Third-party payor system in the US (i.e. private vs public) - answerPrivate: Blue Cross
Blue Shield, Commercial Insurers, Self-Insurers. (AETNA)
Public: Medicare and Medicaid-both offer services to different levels. "Safety net"
Lowest reimbursement rates.
Reimbursement methods (fee-for-service vs. capitation) - answerFee for Service:
payment is tied to amount of services provided. (Decades ago) *Dental industry*
Capitation: payment is tied to the size of the covered population (number of enrollees)
Payment is based on per # per month. *Decreasing utilization* Population is healthier.
Medicare reimbursement for different types of providers - answerMedicare parts A, B &
C.
Medicare Part A (aka Hospital Insurance or HI) - answerProvides hospital insurance
automatically at age 65 (if FICA qualified) at no fee but may have deductible & co-pay.
Medicare Part B - answerThe part of the Medicare program that pays for physician
services, outpatient hospital services, durable medical equipment, and other services
and supplies.
, Medicare Part C (Medicare Advantage) - answer•Replaces and covers expenses found
in Part A and B
•Medicare private fee-for-service plans (PFFS)
•Medicare managed care plans (HMOs and PPOs)
•Medicare specialty plans
Medicare—Part D Prescription Drug Coverage - answera United States federal-
government program to subsidize the costs of prescription drugs and prescription drug
insurance premiums for Medicare beneficiaries.
Impact of the Affordable Care Act (what the bill changed about the healthcare
environment) - answerCreated new standards, individual mandates, exchanges, and
Medicaid expansion.
Focused on quality through clinical compensation, bundled payment, value-based
purchasing.
Regulations and standards of financial accounting (e.g. SEC, GAAP, FASB) - answer-
Securities and Exchange Commission (SEC): has the legal authority to regulate the
form and content of financial statements.
-Financial Accounting Standards Board (FASB)
-Generally Accepted Accounting Principles (GAAP): the conventions that have evolved
from the pronouncements and rulings of the implementing organizations constitute a set
of guidelines for the preparation of financial accounting statements. -ONLY applies only
to financial accounting statements. Does NOT remain STATIC.
GAAP (Generally Accepted Accounting Principles) - answerSplit into 3 categories:
Assumptions, Principles, & Constraints
Assumptions of GAAP - answereconomic entity, monetary unit, periodicity, going
concern
Principles of GAAP - answerhistorical cost, revenue recognition, expense recognition
(matching), full disclosure
Constraints of GAAP - answerMateriality & Cost-benefit
Accrual Accounting - answerAccounting that records the impact of a business event as
it occurs, regardless of whether the transaction affected cash.
*More complicated, provides a better picture of true economic status of a business, is
required by GAAP. Record revenue at the point of time
Cash Accounting - answeraccounting that recognizes business transactions only when
cash is received or disbursed.
