MHA 708 | MHA708 Exam 3: Healthcare Policy
Updated and Latest Questions and Correct
Answers with Rationale - Louisiana State
University in Shreveport
1. A hospital administrator is reviewing the requirements for the ‘Conditions of Participation’
(CoP). Which federal agency is primarily responsible for establishing and enforcing these
standards to ensure patient safety and quality of care for Medicare beneficiaries?
A. The Centers for Disease Control and Prevention (CDC)
B. The Centers for Medicare & Medicaid Services (CMS)
C. The Food and Drug Administration (FDA)
D. The Office of the National Coordinator (ONC)
Correct Answer: B
Explanation: CMS is the lead federal agency responsible for managing Medicare and
Medicaid and setting the health and safety standards known as Conditions of Participation.
Compliance with these standards is required for healthcare providers to receive federal
reimbursement. While the CDC provides guidelines for infection control, it does not hold
the regulatory authority for CoPs. The FDA regulates medical devices and drugs rather than
hospital operational standards. Administrators must ensure strict adherence to CMS CoPs
to maintain the organization’s primary revenue stream and legal standing.
2. Under the Emergency Medical Treatment and Labor Act (EMTALA), which of the following
is a mandatory requirement for a hospital with an emergency department?
A. Providing a medical screening exam (MSE) to any individual who comes to the
emergency department
B. Confirming the patient’s insurance coverage before providing any treatment
C. Transferring all indigent patients to a public county hospital regardless of stability
D. Charging a flat fee for all emergency consultations to ensure compliance
Correct Answer: A
Explanation: EMTALA was enacted to prevent ‘patient dumping’ by requiring hospitals to
provide a medical screening exam to determine if an emergency medical condition exists. If
such a condition is found, the hospital must stabilize the patient regardless of their ability
to pay or insurance status. Delaying a screening to inquire about insurance is a violation of
federal law and can lead to significant fines. The act also governs the safe transfer of
patients who cannot be stabilized at the initial facility. Hospital governance must prioritize
these protocols to avoid civil monetary penalties and exclusion from federal programs.
,3. The ‘Stark Law’ specifically prohibits physician self-referral for ‘designated health services’
(DHS) under which specific circumstances?
A. When the referral is made for emergency services at a competing hospital
B. When the referral is made to an immediate family member who is a specialist
C. When the physician receives a kickback for referring patients to a pharmaceutical
company
D. When the physician has an ownership or investment interest in the entity to which the
patient is referred
Correct Answer: D
Explanation: The Stark Law is a strict liability statute that prohibits physicians from
referring Medicare or Medicaid patients for DHS to an entity with which the physician has a
financial relationship. Unlike the Anti-Kickback Statute, Stark Law does not require proof of
intent to violate the law. Financial relationships include both ownership interests and
compensation arrangements between the physician and the service provider. Failure to
comply can result in the denial of payment and the imposition of civil penalties. Compliance
officers must monitor all physician contracts to ensure they fall within specific statutory
exceptions.
4. Which regulatory body has the authority to grant ‘deemed status’ to healthcare
organizations, effectively meaning they meet Medicare and Medicaid requirements through
private accreditation?
A. The Joint Commission (TJC)
B. The Department of Justice (DOJ)
C. The American Medical Association (AMA)
D. The Federal Trade Commission (FTC)
Correct Answer: A
Explanation: The Joint Commission is a non-profit accrediting body that evaluates and
accredits healthcare organizations based on high-performance standards. When an
organization is accredited by TJC, CMS grants it ‘deemed status,’ satisfying the regulatory
requirements for Medicare participation. This process allows hospitals to undergo a single
comprehensive survey rather than separate state and federal inspections. While the AMA is
a professional association for doctors, it does not have regulatory accreditation power over
facilities. Maintaining TJC accreditation is a strategic priority for healthcare leaders to
demonstrate quality and ensure operational continuity.
5. In the context of healthcare governance, the ‘Duty of Care’ for a board member implies
which of the following responsibilities?
A. Ensuring the organization always makes a profit regardless of community impact
, B. Prioritizing the personal financial interests of the board members over the hospital
C. Reporting all internal hospital data directly to the local news media for transparency
D. Exercising the level of care that an ordinary prudent person would exercise under
similar circumstances
Correct Answer: D
Explanation: The Duty of Care is a fundamental legal principle in healthcare governance
requiring board members to stay informed and act in good faith. It requires diligence in
decision-making and oversight of the organization’s management and financial health.
Board members must actively participate in meetings and scrutinize reports to protect the
interests of the corporation. Failing this duty can lead to personal legal liability for board
members if the organization suffers preventable harm. This legal framework ensures that
hospital leadership remains accountable for the safety and quality standards provided to
the community.
6. The Anti-Kickback Statute (AKS) differs from the Stark Law primarily because the AKS:
A. Is intent-based and applies to anyone who offers or receives remuneration for referrals
B. Applies only to physician referrals for laboratory services
C. Is a civil statute only and does not carry criminal penalties
D. Allows for unlimited financial incentives between hospitals and doctors
Correct Answer: A
Explanation: The Anti-Kickback Statute is a criminal law that prohibits the knowing and
willful exchange of anything of value to induce or reward referrals for federal healthcare
program business. Unlike Stark Law, which is limited to physicians, AKS applies to any
source of referral, including marketers and vendors. Penalties for AKS violations include
significant fines, imprisonment, and exclusion from Medicare/Medicaid programs. Safe
harbors exist to protect certain legitimate business arrangements, but they must be strictly
followed. Managers must ensure that all compensation models are based on fair market
value to avoid the appearance of illegal inducements.
7. A healthcare manager discovers that a coding error led to the overbilling of Medicare for
several years. Under the False Claims Act, what is the ‘Qui Tam’ provision?
A. A provision allowing private individuals to file a lawsuit on behalf of the government
B. A rule that allows the government to seize hospital assets without a trial
C. A legal defense that protects hospitals from ever being sued for billing errors
D. A requirement that all hospital employees must be licensed coders
Correct Answer: A
Updated and Latest Questions and Correct
Answers with Rationale - Louisiana State
University in Shreveport
1. A hospital administrator is reviewing the requirements for the ‘Conditions of Participation’
(CoP). Which federal agency is primarily responsible for establishing and enforcing these
standards to ensure patient safety and quality of care for Medicare beneficiaries?
A. The Centers for Disease Control and Prevention (CDC)
B. The Centers for Medicare & Medicaid Services (CMS)
C. The Food and Drug Administration (FDA)
D. The Office of the National Coordinator (ONC)
Correct Answer: B
Explanation: CMS is the lead federal agency responsible for managing Medicare and
Medicaid and setting the health and safety standards known as Conditions of Participation.
Compliance with these standards is required for healthcare providers to receive federal
reimbursement. While the CDC provides guidelines for infection control, it does not hold
the regulatory authority for CoPs. The FDA regulates medical devices and drugs rather than
hospital operational standards. Administrators must ensure strict adherence to CMS CoPs
to maintain the organization’s primary revenue stream and legal standing.
2. Under the Emergency Medical Treatment and Labor Act (EMTALA), which of the following
is a mandatory requirement for a hospital with an emergency department?
A. Providing a medical screening exam (MSE) to any individual who comes to the
emergency department
B. Confirming the patient’s insurance coverage before providing any treatment
C. Transferring all indigent patients to a public county hospital regardless of stability
D. Charging a flat fee for all emergency consultations to ensure compliance
Correct Answer: A
Explanation: EMTALA was enacted to prevent ‘patient dumping’ by requiring hospitals to
provide a medical screening exam to determine if an emergency medical condition exists. If
such a condition is found, the hospital must stabilize the patient regardless of their ability
to pay or insurance status. Delaying a screening to inquire about insurance is a violation of
federal law and can lead to significant fines. The act also governs the safe transfer of
patients who cannot be stabilized at the initial facility. Hospital governance must prioritize
these protocols to avoid civil monetary penalties and exclusion from federal programs.
,3. The ‘Stark Law’ specifically prohibits physician self-referral for ‘designated health services’
(DHS) under which specific circumstances?
A. When the referral is made for emergency services at a competing hospital
B. When the referral is made to an immediate family member who is a specialist
C. When the physician receives a kickback for referring patients to a pharmaceutical
company
D. When the physician has an ownership or investment interest in the entity to which the
patient is referred
Correct Answer: D
Explanation: The Stark Law is a strict liability statute that prohibits physicians from
referring Medicare or Medicaid patients for DHS to an entity with which the physician has a
financial relationship. Unlike the Anti-Kickback Statute, Stark Law does not require proof of
intent to violate the law. Financial relationships include both ownership interests and
compensation arrangements between the physician and the service provider. Failure to
comply can result in the denial of payment and the imposition of civil penalties. Compliance
officers must monitor all physician contracts to ensure they fall within specific statutory
exceptions.
4. Which regulatory body has the authority to grant ‘deemed status’ to healthcare
organizations, effectively meaning they meet Medicare and Medicaid requirements through
private accreditation?
A. The Joint Commission (TJC)
B. The Department of Justice (DOJ)
C. The American Medical Association (AMA)
D. The Federal Trade Commission (FTC)
Correct Answer: A
Explanation: The Joint Commission is a non-profit accrediting body that evaluates and
accredits healthcare organizations based on high-performance standards. When an
organization is accredited by TJC, CMS grants it ‘deemed status,’ satisfying the regulatory
requirements for Medicare participation. This process allows hospitals to undergo a single
comprehensive survey rather than separate state and federal inspections. While the AMA is
a professional association for doctors, it does not have regulatory accreditation power over
facilities. Maintaining TJC accreditation is a strategic priority for healthcare leaders to
demonstrate quality and ensure operational continuity.
5. In the context of healthcare governance, the ‘Duty of Care’ for a board member implies
which of the following responsibilities?
A. Ensuring the organization always makes a profit regardless of community impact
, B. Prioritizing the personal financial interests of the board members over the hospital
C. Reporting all internal hospital data directly to the local news media for transparency
D. Exercising the level of care that an ordinary prudent person would exercise under
similar circumstances
Correct Answer: D
Explanation: The Duty of Care is a fundamental legal principle in healthcare governance
requiring board members to stay informed and act in good faith. It requires diligence in
decision-making and oversight of the organization’s management and financial health.
Board members must actively participate in meetings and scrutinize reports to protect the
interests of the corporation. Failing this duty can lead to personal legal liability for board
members if the organization suffers preventable harm. This legal framework ensures that
hospital leadership remains accountable for the safety and quality standards provided to
the community.
6. The Anti-Kickback Statute (AKS) differs from the Stark Law primarily because the AKS:
A. Is intent-based and applies to anyone who offers or receives remuneration for referrals
B. Applies only to physician referrals for laboratory services
C. Is a civil statute only and does not carry criminal penalties
D. Allows for unlimited financial incentives between hospitals and doctors
Correct Answer: A
Explanation: The Anti-Kickback Statute is a criminal law that prohibits the knowing and
willful exchange of anything of value to induce or reward referrals for federal healthcare
program business. Unlike Stark Law, which is limited to physicians, AKS applies to any
source of referral, including marketers and vendors. Penalties for AKS violations include
significant fines, imprisonment, and exclusion from Medicare/Medicaid programs. Safe
harbors exist to protect certain legitimate business arrangements, but they must be strictly
followed. Managers must ensure that all compensation models are based on fair market
value to avoid the appearance of illegal inducements.
7. A healthcare manager discovers that a coding error led to the overbilling of Medicare for
several years. Under the False Claims Act, what is the ‘Qui Tam’ provision?
A. A provision allowing private individuals to file a lawsuit on behalf of the government
B. A rule that allows the government to seize hospital assets without a trial
C. A legal defense that protects hospitals from ever being sued for billing errors
D. A requirement that all hospital employees must be licensed coders
Correct Answer: A
