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MHA 600 > MHA 600 > Flashcards

MHA 600 Flashcards

1
Q

Billed for Patient Services Rendered

Where on the Balance Sheet and Income Statement?

A

Income Statement-CREDIT-Patient Services Revenue

Balance Sheet-DEBIT-Accounts Receivable
Balance Sheet-NO CREDIT

(If there is an income statement CREDIT, there is no balance sheet CREDIT)

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2
Q

Made Payment on Bank Loan

Where on the Balance Sheet and Income Statement?

A

NOT ON INCOME STATEMENT

Balance Sheet-DEBIT-Bank Loan
Balance Sheet-CREDIT-Cash

There must be a balance sheet DEBIT and CREDIT if not on the income statement.

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3
Q

Purchased Equipment for Lab

Where on the Balance Sheet and Income Statement?

A

NOT ON INCOME STATEMENT

Balance Sheet-DEBIT-Equipment
Balance Sheet-CREDIT-Cash

There must be a balance sheet DEBIT and CREDIT if not on the income statement.

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4
Q

Purchased Medical Supplies

Where on the Balance Sheet and Income Statement?

A

NOT ON INCOME STATEMENT

Balance Sheet-DEBIT-Inventory/Supplies
Balance Sheet-CREDIT-Accounts Payable

There must be a balance sheet DEBIT and CREDIT if not on the income statement.

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5
Q

Annual Change in Accumulated Depreciation

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-Depreciation Expense

Balance Sheet-NO DEBIT
Balance Sheet-CREDIT-New Depreciation

If there is an income statement DEBIT, there is no balance sheet DEBIT

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6
Q

Received Draw from Bank Loan

Where on the Balance Sheet and Income Statement?

A

NOT ON INCOME STATEMENT

Balance Sheet-DEBIT-Cash
Balance Sheet-CREDIT-Bank Loan

There must be a balance sheet DEBIT and CREDIT if not on the income statement.

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7
Q

Estimated Bad Debts for the Year

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-Less Bad Debt

Balance Sheet-CREDIT-Less Allowance for Bad Debts
Balance Sheet-NO DEBIT

If there is an income statement DEBIT, there is no balance sheet DEBIT

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8
Q

Made payment to CMS for retro billing audit findings

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-less bad debt

Balance Sheet-NO DEBIT
Balance Sheet-CREDIT-Cash

If there is an income statement DEBIT, there is no balance sheet DEBIT

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9
Q

Received cash collections on patient billings

Where on the Balance Sheet and Income Statement?

A

NOT ON Income Statement

Balance Sheet-DEBIT-Cash
Balance Sheet-CREDIT-Accounts Receivable

There must be a balance sheet DEBIT and CREDIT if not on the income statement.

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10
Q

Medical Supplies Used in Patient Care

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-Expenses

Balance Sheet-CREDIT-Supplies
Balance Sheet-DEBIT-NOT USED

If there is an income statement DEBIT, there is no balance sheet DEBIT

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11
Q

Received Bill for Property Taxes on Equipment

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-Expenses

Balance Sheet-CREDIT-Accounts Payable
Balance Sheet-DEBIT-Not on Balance Sheet

If there is an income statement DEBIT, there is no balance sheet DEBIT

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12
Q

Made dividend payment to stockholders

Where on the Balance Sheet and Income Statement?

A

Income Statement-NOT on Income Statement

Balance Sheet-DEBIT-Dividends
Balance Sheet-CREDIT-Cash

There must be a balance sheet DEBIT and CREDIT if not on the income statement.

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13
Q

Paid Bill to Sodexco for EVS Consulting

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-Administrative Expenses

Balance Sheet-DEBIT-Not on there
Balance Sheet-CREDIT-Cash

If there is an income statement DEBIT, there is no balance sheet DEBIT

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14
Q

Storeroom Destroyed out of date stock

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-Supplies

Balance Sheet-DEBIT-not on sheet
Balance Sheet-CREDIT-Supplies Inventory

If there is an income statement DEBIT, there is no balance sheet DEBIT

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15
Q

Received Investment Income

Where on the Balance Sheet and Income Statement?

A

Income Statement-CREDIT-Investment Income

Balance Sheet-DEBIT-Cash
Balance Sheet-NOTHING on CREDIT

If there is an income statement CREDIT, there is no balance sheet CREDIT

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16
Q

Paid Expenses for Corporate Shared Services

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-Admin Expenses

Balance Sheet-DEBIT-not on balance sheet
Balance Sheet-CREDIT-Cash

If there is an income statement DEBIT, there is no balance sheet DEBIT

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17
Q

Paid Interest Expense on bank loan

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-Expenses Interest

Balance Sheet-DEBIT-not on balance sheet
Balance Sheet-CREDIT-Cash

If there is an income statement DEBIT, there is no balance sheet DEBIT

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18
Q

Paid NC State for Lean State Pricess Improvement

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-Admin Expenses

Balance Sheet-DEBIT-not on balance sheet
Balance Sheet-CREDIT-Cash

If there is an income statement DEBIT, there is no balance sheet DEBIT

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19
Q

Paid Staff Bonus for meeting year end KPI goals

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-Expenses

Balance Sheet-nothing on DEBIT
Balance Sheet-CREDIT-Cash

If there is an income statement DEBIT, there is no balance sheet DEBIT

20
Q

Employee Salaries Earned

Where on the Balance Sheet and Income Statement?

A

Income Statement-DEBIT-Expense Salary

Balance Sheet-DEBIT-not on balance sheet
Balance Sheet-CREDIT-Salaries

If there is an income statement DEBIT, there is no balance sheet DEBIT

21
Q

Employee Salaries Paid

Where on the Balance Sheet and Income Statement?

A

Income Statement-NOT ON INCOME STATEMENT

Balance Sheet-DEBIT-Salaries
Balance Sheet-CREDIT-Cash

22
Q

Examples of Fixed Costs

A

Labor Costs as long as they’re in a relevant range
Expenditures on facilities
Expenditures on dx equipment
Expenditures on information systems

23
Q

Examples of Variable Costs

A

Volume dictates variable costs
Clinical supplies
Leased equipment if it is per procedure

24
Q

What is underlying cost structure

A

The relationship between fixed and variable cost and volume

25
Q

What is total cost calculation

A

total variable cost+fixed cost

26
Q

What is Cost and Volume Profit Analysis

A

CVP-

Use a base case for volume and fixed cost
Look at variable cost on a per unit basis

The higher volume leads to higher total costs

27
Q

Differentiate bewteen P&L Statement and Income Statement

A

P&L is for decision-making;
IS is for GAAP (Generally Accepted Accounting Principles)

P&L can be made for subunits and not for entire organizations

28
Q

P&L Calculation for Breakeven

A

Total Revenue-Total Variable Costs-Direct Fixed Costs-Overhead=$0 Profit

29
Q

What is the contribution margin

A

Total Revenues - Total Variable Cost

30
Q

Discounted FFS Profit Analysis Equation

A

(Undiscounted Revenue-Discounted Revenue) —–Total Revenue
Total Revenue - Total Variable Costs —-this makes the contribution margin

Contribution Margin-Fixed Cost-Overhead=Profit

31
Q

Capitated Analysis

A

Higher volume will bring lower revenue

32
Q

What are Direct Costs

A

The costs directly related to the cost of the department

lab, managers, technicians

33
Q

Examples of indirect costs

A

space
infrastructure
general admin
overhead costs

34
Q

Relationship between fixed, variable, direct and indirect costs

A

FIXED-Contain direct and indirect costs not related to the volume of services
VARIABLE-Only Direct Costs related to the volume of services

DIRECT-Fixed and Variable that are tied directly to a subunit
INDIRECT-Usually only fixed-Overhead costs that are shared resources

35
Q

Relationship between cost pool, cost driver, allocation rate and allocation process

A

Cost pool-costs to be allocated
Cost driver-basis that allocation is made

Allocation Rate=Cost Pool/Cost Driver

Allocation Process
1-Determine the cost pool
2-Determine the cost driver
3-Calculate the allocation rate
4-Determine the allocation amount
36
Q

Once the Cost to Charge Ratio is calculated, it is used to determine the overhead costs

A

ServiceOverhead cost = CCR x Service Charge

37
Q

Full Service Cost is calculated by what method

A

Direct cost + Indirect Cost

38
Q

How do you calculate average cost per visit

A

Total Costs/Number of Visits

39
Q

CCR -What is it and what are the calculations

A 
Indirect Costs (Overhead) are proportional to everyone
Charges reflect the level of intensity of the service provided.

Cost to Charge Ratio=Indirect Costs/Total Charges

40
Q

Relative Value Unit-What is it and what are the calculations

A

RVU-ties the use of overhead resources to complexity and time required for each service.

RVU X Volume=Total RVU

Overhead cost/Total RVU

Cost X RVU service

41
Q

ABC Method and what are the calculations

A

Identify the activities
Estimate the activity (direct and indirect)
Assign cost drivers
Collect Activity Data
Calculate total cost of services by aggregating activity costs

42
Q

Providers as Price Takers

A

Insurers can set because providers are at mercy of competitive market

43
Q

Providers as price setters

A

set price because of the lack of competition and the value of the service that they provide

44
Q

Price setting strategies

A

Full Cost Pricing
Marginal Cost Pricing
Target Costing
Cross Subsidization

45
Q

Full Cost Pricing

A

Direct Variable Cost
Direct Fixed Cost
Overhead
Profit

46
Q

Marginal Cost Pricing

A

Mostly temporary measure for costs based on certain volume

47
Q

Target Costing

A

Must lower cost to gather revenue

MHA 600 (2 decks)

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