MHA 706 Midterm- Lord
1. Proprietorships & Partnerships: Pros & Cons: 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.
2. Corporations: Pros & Cons: 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.
3. Non-profit Organization: Exempt from taxes. Goal is to improve community.
4. For-profit Organizations: (Investor Owned) Goal is to maximize shareholder
return. Owe taxes.
5. Agency Problem: 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.
6. Third-party payor system in the US (i.e. private vs public): Private: Blue
Cross Blue Shield, Commercial Insurers, Self-Insurers. (AETNA)
Public: Medicare and Medicaid-both offer services to different levels. "Safety net"
Lowest reimbursement rates.
7. Reimbursement methods (fee-for-service vs. capitation): Fee 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.
8. Medicare reimbursement for different types of providers: Medicare parts A,
B & C.
9. Medicare Part A (aka Hospital Insurance or HI): Provides hospital insurance
automatically at age 65 (if FICA qualified) at no fee but may have deductible &
co-pay. 10. Medicare Part B: The part of the Medicare program that pays for
physician services, outpatient hospital services, durable medical equipment,
and other services and supplies.
11. Medicare Part C (Medicare Advantage): •Replaces and covers expenses
found in Part A and B
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, •Medicare private fee-for-service plans (PFFS)
•Medicare managed care plans (HMOs and PPOs)
•Medicare specialty plans
12 Medicare—Part D Prescription Drug Coverage: a United States federal-
government program to subsidize the costs of prescription drugs and prescription
drug insurance premiums for Medicare beneficiaries.
13. Impact of the Affordable Care Act (what the bill changed about the
healthcare environment): Created new standards, individual mandates,
exchanges, and Medicaid expansion.
Focused on quality through clinical compensation, bundled payment, value-based
purchasing.
14. Regulations and standards of financial accounting (e.g. SEC, GAAP,
FASB): -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.
15. GAAP (Generally Accepted Accounting Principles): Split into 3 categories:
Assumptions, Principles, & Constraints
16. Assumptions of GAAP: economic entity, monetary unit, periodicity, going
concern
17. Principles of GAAP: historical cost, revenue recognition, expense recognition
(matching), full disclosure
18. Constraints of GAAP: Materiality & Cost-benefit
19. Accrual Accounting: Accounting 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
20. Cash Accounting: accounting that recognizes business transactions only
when cash is received or disbursed.
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1. Proprietorships & Partnerships: Pros & Cons: 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.
2. Corporations: Pros & Cons: 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.
3. Non-profit Organization: Exempt from taxes. Goal is to improve community.
4. For-profit Organizations: (Investor Owned) Goal is to maximize shareholder
return. Owe taxes.
5. Agency Problem: 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.
6. Third-party payor system in the US (i.e. private vs public): Private: Blue
Cross Blue Shield, Commercial Insurers, Self-Insurers. (AETNA)
Public: Medicare and Medicaid-both offer services to different levels. "Safety net"
Lowest reimbursement rates.
7. Reimbursement methods (fee-for-service vs. capitation): Fee 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.
8. Medicare reimbursement for different types of providers: Medicare parts A,
B & C.
9. Medicare Part A (aka Hospital Insurance or HI): Provides hospital insurance
automatically at age 65 (if FICA qualified) at no fee but may have deductible &
co-pay. 10. Medicare Part B: The part of the Medicare program that pays for
physician services, outpatient hospital services, durable medical equipment,
and other services and supplies.
11. Medicare Part C (Medicare Advantage): •Replaces and covers expenses
found in Part A and B
1/8
, •Medicare private fee-for-service plans (PFFS)
•Medicare managed care plans (HMOs and PPOs)
•Medicare specialty plans
12 Medicare—Part D Prescription Drug Coverage: a United States federal-
government program to subsidize the costs of prescription drugs and prescription
drug insurance premiums for Medicare beneficiaries.
13. Impact of the Affordable Care Act (what the bill changed about the
healthcare environment): Created new standards, individual mandates,
exchanges, and Medicaid expansion.
Focused on quality through clinical compensation, bundled payment, value-based
purchasing.
14. Regulations and standards of financial accounting (e.g. SEC, GAAP,
FASB): -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.
15. GAAP (Generally Accepted Accounting Principles): Split into 3 categories:
Assumptions, Principles, & Constraints
16. Assumptions of GAAP: economic entity, monetary unit, periodicity, going
concern
17. Principles of GAAP: historical cost, revenue recognition, expense recognition
(matching), full disclosure
18. Constraints of GAAP: Materiality & Cost-benefit
19. Accrual Accounting: Accounting 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
20. Cash Accounting: accounting that recognizes business transactions only
when cash is received or disbursed.
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