Finance Flashcards
Amount an organization owes to suppliers and other tree creditors for merchandise and services purchased from them but for which the organization has not yet paid
Accounts payable
The amount of cash required to support operations for the period of delay in collecting revenue
Working capital
Programs that reward healthcare providers with incentive payments for the quality of care they deliver to Medicare beneficiaries
Value based programs
Net assets that have not been externally restricted by donors or grantors such as the excess of revenues to expenses from operations
Unrestricted net assets
The price charged for inner organizational trade Aida sale or transfer of goods and services within an organization
Transfer pricing
The concept that money available at the present time is worth more than the same amount in the future because the value of money diminishes overtime as a result of inflation risk and uncertainty of returns from investments
Time value of money
An agent of the patient the first party that contracts with a provider the second party to pay all or a portion of the bill to the patient
Third-party payer
Donor restricted net assets that an organization can use for the donor specific purpose after the organization has met the donors restriction such as the passage of time or an action by the organization
Temporary restricted net assets
A method of paying for healthcare in which the hospital is paid a flat fee for each given diagnosis regardless of the actual service provided
Per diagnosis rate
Print Bill submit Bill follow up on Bill collect Bill or Bill resolution
Payment cycle
Account of the charges rendered to an individual patient
Patient ledger
Net patient services revenues minus provisions for bad debt plus premium revenue and other operating revenue
Operating revenue
Money earned from providing patient care services in includes the total revenue games and other support minus the total operating expenses
Operating income
Resources used on operations to generate revenue in support of an organization’s mission statement
Operating expenses
Income generated from non-patient care activities including investments insecurities and earnings from unrelated businesses
Nonoperating revenue
Economic resources that have a life of one year or more the organization expect to consume them over a span of longer than one year
Noncurrent assets
Income actually received as opposed to that initially posted equal to gross revenue minus adjustments for bad debts charity and discounts to third parties
Net revenue
The present value of the future cash flows of an investment; net present value takes into account the fact that future cash flows are discounted to determine the present value
Net present value
Money generated by providing patient care minus the amount and organization will not collect as a result of discounting charges per contractual agreement and providing charity care
Net patient services revenue
The difference between assets and liabilities in a not for profit organization represents the owners and other financial interest in the organization
Net assets
A federally funded program that provides health insurance for Americans at age 65
Medicare
A program created by the federal government funded by the federal and state governments in administered by the state government to provide free or low cost healthcare to low income recipients
Medicaid
A process of restructuring transaction data to support monitoring cleaning and setting expectations and improving performance of accountability centers
Managerial accounting
An organization that controls the access to and cost and quality of healthcare
Managed care organization
Ratios that measure and organizations ability to meet short term obligations
Liquidity ratios
Budgeting that segregates the budgets
Limited in scope budgeting
The amounts earned by an organization or sometimes donated to it
Revenues
A Medicare reimbursement system that provides a flat per visit fee to physicians rather than reimbursing them according to their customary charges
Resource based relative value scale
Ratios that measure an organizations ability to exist and grow
Profitability ratios
A variety of ratios that measure employee productivity during the shift day week or month and buy employee or employees
Productivity measures
Patient’s care of team demographic data obtain insurance data verify insurance coverage obtain authorizations obtain deductibles obtain co-pays care is provided record charges maintain medical record review utilization here is completed transfer medical record analyze medical record abstract medical record code medical record transcribe dictation
Production cycle
A forecast of financial statements establishing the future financial position of an organization for a given set of operating conditions or decisions
Pro forma
The link between a strategic plan which looks 3 to 10 years out in the operating plan which looks when you’re out in essence the quantification of a series of strategic planning policy decisions that will answer whether an organization can make progress towards accomplishing it’s strategic plan over the next 10 years
Strategic financial plan
Analysis that changes key assumptions upward and downward to ascertain the effects on break even
Sensitivity analysis
Federal corporate accountability legislation passed in 2002 in the aftermath of the Enron bankruptcy and intended to improve governance and corporate practices
Sarbanes Oxley act
The practice of an employer making a contractual agreement directly with an integrated delivery system to deliver health services to employees
Direct contracting
A method of assembling cost and sometimes revenues to alternative decisions also known as incremental cost or relevant costing
Differential costing
A grouping of similar healthcare cases that should require similar resource consumption Medicare uses diagnosis-related groups to calculate prospective payment
Diagnosis-related groups
Money received by the hospital but not yet heard such as registration fees for an educational program not yet provided
Deferred revenue
A set of medical codes used to report medical surgical and diagnostic procedures and services
Current procedural terminology
Economic obligations or debts that are due within one year
Current liabilities
Resources that an organization expect to consume within one year
Current assets
Budgets that are updated continuously so that year end never occurs
Continuous budgets
Integration of all budgets into one document
Comprehensive budgeting
The amount patients are expected to pay for services also called prices or rates
Charges
Ratios that measure and organizations long-term liquidity by measuring a variety of relationships to capital
Capital structure ratios
The process of converting the operating plan into budgets for capital expenditures
Capital budgeting
The process of converting the operating plan into monetary terms
Budgeting
An analysis to determine the volume point at which a project to cover its costs can be helpful to organizations considering new projects developing a business plan or formulating a pricing strategy
Break even analysis
A statement that shows an organizations financial position at a specific point in time
Balance sheet
Ratios that measure efficiency by comparing revenue to assets
Asset efficiency ratios
Patient protection laws that allow patients to receive care from providers outside a network
Any willing provider statues
Liabilities for expenses that I’ve been incurred by the hospital but for which the hospital has not yet paid so just compensation to employees
Accrued expenses payable
The minimum return one needs to break even on an investment; it is the necessary net present value of an investment that when added to the final market value of the investment equals the current cost of the investment
Internal rate of return
Budgeting only for changes such as new equipment the assumption in incremental budgeting that the current budget is already optimal
Incremental budgeting
A health insurance plan with higher deductible and lower premiums in traditional health plans
High deductible health plan
An entry to the patient ledger of the charge for a specified healthcare service no longer meaningful measure
Gross revenue
Technically the record of all of a firms transactions often refers to the fixed and collective assets such as depreciation that must be allocated to operational units
General ledger
Fraud is an in intentional misrepresentation of fact designed to induce reliance by another abuse is an unintentional misrepresentation of fact
Fraud and abuse
Funded depreciation philanthropy operating surpluses and debt
Four ways to finance capital expenditures
Budgets that take into account fluctuations in volumes at least within range is expressed as probabilities and adjust variable expenses accordingly
Flexible budget
Budgets that assume volumes related revenues and variable expenses remain constant during the year
Fixed budget
Operating income plus not operating income minus total expenses
Excess of revenues over expenses
Budgets that apply to a fixed period of time usually a year
Discrete budgets
A fixed monthly payment to providers from a third-party payer for each person enrolled in the pears plan regardless of whether any given individual receives care also known as cavitation this payment model incentivizes a healthcare organization to keep its population from using more healthcare services the necessary because it profits only if the total cost of treating the population is less than the total capitated price
Capitated price
Amounts due to an organization from patients and insurance for services an organization has already provided the concept of accounts receivable is often called the revenue cycle a multidisciplinary approach to reducing the amount of an accounts receivable by effectively managing the production in Payment cycles
Accounts receivable
