NEBC EXAM QUESTIONS WITH COMPLETE
SOLUTIONS
For Profit Organizations - ANSWER Can lawfully release a patient who does not have the
ability to pay for services (after EMTALA). Serve lower income populations. Owned by
investors or shareholders. Large portion of budget allocated to marketing and
advertising.
STAR model to facilitate systems change - ANSWER A change in one area usually
necessitates a change in another area because of the inter-relatedness of systems.
Based on a diagram with the points of the STAR representing: strategy, structure,
human resources, incentives, and information/decision making.
McKenzie 7-S Model - ANSWER Strategy: this is your organization's plan for building and
maintaining a competitive advantage over its competitors.
Structure: this is how your company is organized (how departments and teams are
structured, including who reports to whom).
Systems: the daily activities and procedures that staff use to get the job done.
Shared Values: these are the core values of the organization and reflect its general
work ethic. They were called "superordinate goals" when the model was first
developed.
Style: the style of leadership adopted.
Staff: the employees and their general capabilities.
Skills: the actual skills and competencies of the organization's employees.
Affordable Care Act - ANSWER An expansion of medicaid, most of employers must
provide health insurance, have insurance or face surtax, prevents rejection based on
pre-existing condition. Also referred to as "Obamacare", signed into law in 2010. Make
affordable health insurance available to more people.
Accountable Care Organization (ACO) - ANSWER a network of doctors and hospitals
that shares responsibility for managing the quality and cost of care provided to a group
of patients. Established per ACA.
not-for-profit organizations - ANSWER Must treat all conditions or people regardless of
insurance or ability to pay. Considered charities by IRS. Do not pay federal or state/local
property taxes. Obligation to the community.
Medicare - ANSWER National Health Insurance program for people 65 and older,
,disabled, and any age with ESRD.
Medicare A - ANSWER Covers inpatient hospital stays, some hospice and home health
care, no monthly premium
Medicare B - ANSWER Medical insurance, pays for doctor services and outpatient
services, PT/OT services. Monthly premium.
Medicare C - ANSWER Often called the advantage plan or choice plan. Includes A and B,
most include D. May offer dental, vision, and wellness
Medicare D - ANSWER Prescription drug coverage. Monthly premium. Available to
everyone, must join Medicare plan that includes part D
Medicaid - ANSWER A federal and state assistance program that pays for health care
services for people who cannot afford them. Low-income children, pregnant women,
and elderly. Pays long term care.
Payors - ANSWER Employers, government, insurance companies, people who pay for
healthcare services
Charity Pay - ANSWER Healthcare system received no reimbursement for services
Health Maintenance Organization (HMO) - ANSWER an organization that provides
comprehensive medical care to subscribers for a fixed fee. Cost effective care focused
on preventative care. Network, group, staff and independent practice associations.
Preferred Provider Organization (PPO) - ANSWER Group of healthcare providers that
provide services to a specific group, often at a reduced rate. Cost is higher to use out of
network provider. Help negotiate cost of services between the providers and
purchasers.
Diagnosis Related Group (DRGs) - ANSWER classifies patients by age, diagnosis,
surgical procedure, and other information with hundreds of different categories to
predict the use of hospital resources, including length of stay, resulting in a fixed
payment amount
Prospective Payment Systems (PPS) - ANSWER Required facilities providing services to
Medicare clients to be reimbursed using a fixed-rate system and included monetary
incentives to reduce the length of hospital stays.
(Based on diagnosis-related group (DRG) categories)
Social Health Maintenance Organization (SHMO) - ANSWER special type of health plan
that provides the full range of Medicare benefits offered by standard Medicare HMOs,
plus other services that include the following: prescription drug and chronic care
benefits, respite care, and short-term nursing home care; homemaker, personal care
services, and medical transportation; eyeglasses, hearing aids, and dental benefits
,Pay for Performance (P4P) - ANSWER performance-oriented incentives for hospitals
and physicians to improve the quality of patient healthcare. 4 quality measures -
performance, outcomes, patient satisfaction/experience, structures and technologies
(EHR)
Value Based Purchasing - ANSWER A pay for performance methodology used to
reimburse hospitals based on outcomes. Provided by Centers for Medicare and
Medicaid Services. Incentive payments to acute-care hospitals yearly based on total
performance score (TPS). Improvement on measures (9) and consistency (20)
Budget Cycle - ANSWER Includes development, monitoring, reporting, justifying and
variance analysis. Four types of budget - revenue, expense, capital, and operating
Budgeting Methods - ANSWER incremental budgeting
zero based budgeting
flexible budgeting
performance budgeting
Zero-Based Budget - ANSWER allocates resources as if each budget was brand new,
prepares next years budget without automatic approval for programs, every dollar
spent needs to be justified
incremental budgeting - ANSWER uses last year's budget as a basis and an adjustment
is made for the coming year
Garbage Can Model of Decision Making - ANSWER Leader tries to implement action
used before, but may not align with philosophy, mission, or gain support to be
successful (act of desperation). No clear plan or problem identification.
cybernetic model - ANSWER programs that require evaluation. three phases: Needs
assessment, program implementation, and results assessment
Return on Investment (ROI) formula - ANSWER net profit/cost of investment
Revenue - ANSWER anticipated amount of income during the budget period
Expense - ANSWER salary and nonsalary, fixed costs (remain constant such as rental
fees and contract fees) and variable costs (fluctuate based on unit activity such as
census and acuity)
Capital - ANSWER equipment and renovation expenses. lifespan of 1 year of greater.
, consider cost of item, installation, shipping or delivery charges, service contracts.
Amortization (assigning cost of asset over its lifetime) Depreciation (expensing fixed
assets annually)
Operating Budget - ANSWER Annual budget. Based on past years unit activity
predicting for next year. Revenues and expenses for fiscal year.
How to create operating budget - ANSWER Need productivity goals, patient days,
workload (HHPD - hours per patient day), HPPD/shift and staffing needs, non-productive
hours, productive/non-productive hours over time, non-labor costs. SALARY is number
one expense.
Patient Days - ANSWER Total inpatient days for a year. Calculated by adding together
the daily patient census for 365 days. Daily census is typically the unit census at
midnight.
Average Daily Census (ADC) - ANSWER total patient days/number of calendar days.
Total patient days =3875. # of calendar days = 365. 3875/365 = 10.6 ADC.
Full Time Equivalency (FTE) - ANSWER Established by the health care reform law to aid
in determining tax credits for employees. Utilized by employer to determine staffing
needs and cost-effectiveness. 2080 hours/year = 1.0 FTE
Hours Per Patient Day (HPPD) - ANSWER Calculates the amount of nursing care
necessary per patient in a 24-hour period. Total productive hours/Total volume (ADC).
8-hour shifts, 5 RNs, 1 LVN, 1 CNA and ADC of 28. 7 staff x 8 hours = 56 hours per shift.
56 hours x 3 shifts = 168 hours per day. 168/28 = 6 HPPD
Non-Productive Time - ANSWER varies by benefit package at each organization.
Average is 12-20%. Calculate non-productive time. FTE = 2080 hours annually. 20%
benefit time. 2080 x 0.8 = 1664 hours of productive time for patient care.
How many FTEs are needed to appropriately staff this unit? - ANSWER ADC = 10.
SOLUTIONS
For Profit Organizations - ANSWER Can lawfully release a patient who does not have the
ability to pay for services (after EMTALA). Serve lower income populations. Owned by
investors or shareholders. Large portion of budget allocated to marketing and
advertising.
STAR model to facilitate systems change - ANSWER A change in one area usually
necessitates a change in another area because of the inter-relatedness of systems.
Based on a diagram with the points of the STAR representing: strategy, structure,
human resources, incentives, and information/decision making.
McKenzie 7-S Model - ANSWER Strategy: this is your organization's plan for building and
maintaining a competitive advantage over its competitors.
Structure: this is how your company is organized (how departments and teams are
structured, including who reports to whom).
Systems: the daily activities and procedures that staff use to get the job done.
Shared Values: these are the core values of the organization and reflect its general
work ethic. They were called "superordinate goals" when the model was first
developed.
Style: the style of leadership adopted.
Staff: the employees and their general capabilities.
Skills: the actual skills and competencies of the organization's employees.
Affordable Care Act - ANSWER An expansion of medicaid, most of employers must
provide health insurance, have insurance or face surtax, prevents rejection based on
pre-existing condition. Also referred to as "Obamacare", signed into law in 2010. Make
affordable health insurance available to more people.
Accountable Care Organization (ACO) - ANSWER a network of doctors and hospitals
that shares responsibility for managing the quality and cost of care provided to a group
of patients. Established per ACA.
not-for-profit organizations - ANSWER Must treat all conditions or people regardless of
insurance or ability to pay. Considered charities by IRS. Do not pay federal or state/local
property taxes. Obligation to the community.
Medicare - ANSWER National Health Insurance program for people 65 and older,
,disabled, and any age with ESRD.
Medicare A - ANSWER Covers inpatient hospital stays, some hospice and home health
care, no monthly premium
Medicare B - ANSWER Medical insurance, pays for doctor services and outpatient
services, PT/OT services. Monthly premium.
Medicare C - ANSWER Often called the advantage plan or choice plan. Includes A and B,
most include D. May offer dental, vision, and wellness
Medicare D - ANSWER Prescription drug coverage. Monthly premium. Available to
everyone, must join Medicare plan that includes part D
Medicaid - ANSWER A federal and state assistance program that pays for health care
services for people who cannot afford them. Low-income children, pregnant women,
and elderly. Pays long term care.
Payors - ANSWER Employers, government, insurance companies, people who pay for
healthcare services
Charity Pay - ANSWER Healthcare system received no reimbursement for services
Health Maintenance Organization (HMO) - ANSWER an organization that provides
comprehensive medical care to subscribers for a fixed fee. Cost effective care focused
on preventative care. Network, group, staff and independent practice associations.
Preferred Provider Organization (PPO) - ANSWER Group of healthcare providers that
provide services to a specific group, often at a reduced rate. Cost is higher to use out of
network provider. Help negotiate cost of services between the providers and
purchasers.
Diagnosis Related Group (DRGs) - ANSWER classifies patients by age, diagnosis,
surgical procedure, and other information with hundreds of different categories to
predict the use of hospital resources, including length of stay, resulting in a fixed
payment amount
Prospective Payment Systems (PPS) - ANSWER Required facilities providing services to
Medicare clients to be reimbursed using a fixed-rate system and included monetary
incentives to reduce the length of hospital stays.
(Based on diagnosis-related group (DRG) categories)
Social Health Maintenance Organization (SHMO) - ANSWER special type of health plan
that provides the full range of Medicare benefits offered by standard Medicare HMOs,
plus other services that include the following: prescription drug and chronic care
benefits, respite care, and short-term nursing home care; homemaker, personal care
services, and medical transportation; eyeglasses, hearing aids, and dental benefits
,Pay for Performance (P4P) - ANSWER performance-oriented incentives for hospitals
and physicians to improve the quality of patient healthcare. 4 quality measures -
performance, outcomes, patient satisfaction/experience, structures and technologies
(EHR)
Value Based Purchasing - ANSWER A pay for performance methodology used to
reimburse hospitals based on outcomes. Provided by Centers for Medicare and
Medicaid Services. Incentive payments to acute-care hospitals yearly based on total
performance score (TPS). Improvement on measures (9) and consistency (20)
Budget Cycle - ANSWER Includes development, monitoring, reporting, justifying and
variance analysis. Four types of budget - revenue, expense, capital, and operating
Budgeting Methods - ANSWER incremental budgeting
zero based budgeting
flexible budgeting
performance budgeting
Zero-Based Budget - ANSWER allocates resources as if each budget was brand new,
prepares next years budget without automatic approval for programs, every dollar
spent needs to be justified
incremental budgeting - ANSWER uses last year's budget as a basis and an adjustment
is made for the coming year
Garbage Can Model of Decision Making - ANSWER Leader tries to implement action
used before, but may not align with philosophy, mission, or gain support to be
successful (act of desperation). No clear plan or problem identification.
cybernetic model - ANSWER programs that require evaluation. three phases: Needs
assessment, program implementation, and results assessment
Return on Investment (ROI) formula - ANSWER net profit/cost of investment
Revenue - ANSWER anticipated amount of income during the budget period
Expense - ANSWER salary and nonsalary, fixed costs (remain constant such as rental
fees and contract fees) and variable costs (fluctuate based on unit activity such as
census and acuity)
Capital - ANSWER equipment and renovation expenses. lifespan of 1 year of greater.
, consider cost of item, installation, shipping or delivery charges, service contracts.
Amortization (assigning cost of asset over its lifetime) Depreciation (expensing fixed
assets annually)
Operating Budget - ANSWER Annual budget. Based on past years unit activity
predicting for next year. Revenues and expenses for fiscal year.
How to create operating budget - ANSWER Need productivity goals, patient days,
workload (HHPD - hours per patient day), HPPD/shift and staffing needs, non-productive
hours, productive/non-productive hours over time, non-labor costs. SALARY is number
one expense.
Patient Days - ANSWER Total inpatient days for a year. Calculated by adding together
the daily patient census for 365 days. Daily census is typically the unit census at
midnight.
Average Daily Census (ADC) - ANSWER total patient days/number of calendar days.
Total patient days =3875. # of calendar days = 365. 3875/365 = 10.6 ADC.
Full Time Equivalency (FTE) - ANSWER Established by the health care reform law to aid
in determining tax credits for employees. Utilized by employer to determine staffing
needs and cost-effectiveness. 2080 hours/year = 1.0 FTE
Hours Per Patient Day (HPPD) - ANSWER Calculates the amount of nursing care
necessary per patient in a 24-hour period. Total productive hours/Total volume (ADC).
8-hour shifts, 5 RNs, 1 LVN, 1 CNA and ADC of 28. 7 staff x 8 hours = 56 hours per shift.
56 hours x 3 shifts = 168 hours per day. 168/28 = 6 HPPD
Non-Productive Time - ANSWER varies by benefit package at each organization.
Average is 12-20%. Calculate non-productive time. FTE = 2080 hours annually. 20%
benefit time. 2080 x 0.8 = 1664 hours of productive time for patient care.
How many FTEs are needed to appropriately staff this unit? - ANSWER ADC = 10.
