HCAD 401 EXAM 1 QUESTIONS
AND ANSWERS
To be considered tax exempt, a corporation must meet certain criteria set forth by which
government organization?
A) US Department of Labor
B) Centers for Medicare & Medicaid Services
C) US Department of Health and Human Services
D) Internal Revenue Service - Answer- D) Internal Revenue Service
The tax-exempt status eliminates the burden of tax liabilities and
A) Most business and licensure fees
B) Fees associated with capital equipment
C) Choices A and B
D) None of the above - Answer- A) Most business and licensure fees
To qualify for tax-exempt status, a corporation must do which of the following?
A) Not engage in prohibited actions
B) Serve public rather than private interests
C) Operate on a charitable, educational, or research basis
D) All of the above - Answer- D) All of the above
A hospital is considered a charitable organization if it
A) Significantly discounts its charges for services
B) Provides care to Medicaid beneficiaries fee of charge
C) Provides care to people who cannot pay
D) Provides financial support to charities throughout the community - Answer- C)
Provides care to people who cannot pay
Research has indicated that _____ hospitals and _____ hospitals provide roughly the
same amount of community benefits
A) Community; not-for-profit
B) Community; for-profit
C) Tertiary; for-profit
D) Not-for-profit; for-profit - Answer- D) Not-for-profit; for-profit
, Richard Scruggs sought class-action lawsuits against not-for-profit hospitals, claiming
these entities
A) Committed several acts of Medicare fraud
B) Did not use their earnings to benefit the community
C) Overcharged uninsured patients and used aggressive collection policies
D) Charged insured patients significantly more than uninsured patients - Answer- C)
Overcharged uninsured patients and used aggressive collection policies
As a response to the Scruggs lawsuits, the healthcare industry has initiated activities
aimed at
A) Redefining tax-exempt status
B) Increasing community benefits
C) Improving charity care policies
D) Decreasing the amount of bad debt - Answer- B) Increasing community benefits
The Taxpayer Bill of Rights II allows the IRS to _____ before revoking a hospital's tax-
exempt status
A) Enforce intermediary sanctions
B) Conduct a thorough financial review
C) Give no warning
D) Conduct an internal review of the hospital - Answer- A) Enforce intermediary
sanctions
The Patient Protection and Affordable Care Act imposes which of the following
provisions on tax-exempt hospitals?
A) They must avoid extraordinary billing and collection policies
B) They must limit charges to patients who qualify for assistance to the lowest amount
charged to insured patients
C) They must complete a community health needs assessment
D) All of the above - Answer- D) All of the above
Patient dumping can be defined as
A) Denying care based on the patient's inability to pay
B) Transferring patients based on the patient's inability to pay
C) Providing care based on the patient's ability to pay
D) Choices A and B - Answer- D) Choices A and B
Community benefits are narrowly defined to include
A) Bad debt
AND ANSWERS
To be considered tax exempt, a corporation must meet certain criteria set forth by which
government organization?
A) US Department of Labor
B) Centers for Medicare & Medicaid Services
C) US Department of Health and Human Services
D) Internal Revenue Service - Answer- D) Internal Revenue Service
The tax-exempt status eliminates the burden of tax liabilities and
A) Most business and licensure fees
B) Fees associated with capital equipment
C) Choices A and B
D) None of the above - Answer- A) Most business and licensure fees
To qualify for tax-exempt status, a corporation must do which of the following?
A) Not engage in prohibited actions
B) Serve public rather than private interests
C) Operate on a charitable, educational, or research basis
D) All of the above - Answer- D) All of the above
A hospital is considered a charitable organization if it
A) Significantly discounts its charges for services
B) Provides care to Medicaid beneficiaries fee of charge
C) Provides care to people who cannot pay
D) Provides financial support to charities throughout the community - Answer- C)
Provides care to people who cannot pay
Research has indicated that _____ hospitals and _____ hospitals provide roughly the
same amount of community benefits
A) Community; not-for-profit
B) Community; for-profit
C) Tertiary; for-profit
D) Not-for-profit; for-profit - Answer- D) Not-for-profit; for-profit
, Richard Scruggs sought class-action lawsuits against not-for-profit hospitals, claiming
these entities
A) Committed several acts of Medicare fraud
B) Did not use their earnings to benefit the community
C) Overcharged uninsured patients and used aggressive collection policies
D) Charged insured patients significantly more than uninsured patients - Answer- C)
Overcharged uninsured patients and used aggressive collection policies
As a response to the Scruggs lawsuits, the healthcare industry has initiated activities
aimed at
A) Redefining tax-exempt status
B) Increasing community benefits
C) Improving charity care policies
D) Decreasing the amount of bad debt - Answer- B) Increasing community benefits
The Taxpayer Bill of Rights II allows the IRS to _____ before revoking a hospital's tax-
exempt status
A) Enforce intermediary sanctions
B) Conduct a thorough financial review
C) Give no warning
D) Conduct an internal review of the hospital - Answer- A) Enforce intermediary
sanctions
The Patient Protection and Affordable Care Act imposes which of the following
provisions on tax-exempt hospitals?
A) They must avoid extraordinary billing and collection policies
B) They must limit charges to patients who qualify for assistance to the lowest amount
charged to insured patients
C) They must complete a community health needs assessment
D) All of the above - Answer- D) All of the above
Patient dumping can be defined as
A) Denying care based on the patient's inability to pay
B) Transferring patients based on the patient's inability to pay
C) Providing care based on the patient's ability to pay
D) Choices A and B - Answer- D) Choices A and B
Community benefits are narrowly defined to include
A) Bad debt
