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Handouts for
6 Financial Management
PRETEST
1. Payment for services is called __________________________________ in the health care industry.
a) reciprocal services
c) risk
b) per diem
d) reimbursement
2. The higher the deductible…
a) the lower the premium
b) the fewer the covered services
c) the higher the copay
d) the higher the premium
3. Sue selects a PCP and must see her provider for a referral to a dermatologist. What kind of health
coverage does she have?
a) concierge care
c) managed care
b) TRICARE
d) indemnity insurance
4. _____________________ is a shared federal and state program in which the federal government
provides funds to states for lower income individuals.
a) Title XIX
c) CMS
b) TRICARE
d) Medicaid
5. Why was the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) important to health care
reimbursement?
a) it switched Medicare to a prospective
d) it prohibited insurers from refusing
payment system
coverage based on pre-existing
b) it created Medicaid
conditions
c) it offered coverage for children and
those with certain developmental
disorders
6. When an insurer pays a health care provider a set fee for each patient, regardless of whether or how
frequently the patient is seen, the payment methodology is called:
a) fee for service
c) prospective payment
b) discounted fee for service
d) capitation
7. What was the effect of the prospective payment system on hospital patient care?
a) better outcomes
c) longer lengths of stay
b) less paperwork
d) shorter lengths of stay
8. A facility with a high case mix index (CMI) will have more _________ than a facility with a lower CMI.
a) reimbursement $
c) audits
b) patients
d) undropped bills
9. In an ambulatory setting, charges are often captured, by service, on a(n)
a) UB-04
c) fee schedule
b) claim form
d) encounter form
10. Large purchases that support the organization’s ability to generate revenue are called:
a) capitation expenses
c) accounting expenses
b) capital expenses
d) fixed expenses
______________________________________________________ Chapter 6 Financial Management
1
Handouts for
6 Financial Management
HANDOUT 1
Vocabulary Review
1. __________________________________ is a federally funded health care insurance plan for older
adults and for certain categories of chronically ill patients.
2. The term ___________________________ refers to a group of providers serving the members of a
managed care organization.
3. A fixed amount paid by the patient at the time of service is the ______________________.
4. The amount a payer reimburses for a medical service based on what providers usually charge in a
geographic area are called _____________________________________________________ fees.
5. The ____________________________________ is a weighted component of MS-DRG assignment
that consists of the hospital-specific rate and additional factors such as regional labor costs and
graduate medical education.
6. A data set collected by SNFs that includes elements of MDS 3.0, along with information on patient
statuses and conditions in the facility, is called the ______________________________________.
7. The application to an insurance company for reimbursement is called a _____________________.
8. ___________________ basis accounting is a method of tracking finances in which transactions are
recorded at the time currency is exchanged.
9. Financial justifications can be required in the form of a __________________________________,
which determines how long it will take to recover the expense of the equipment.
10. A deviation from the projected spending in the budget is called a ___________________________.
Copyright © 2020 by Elsevier, Inc. All rights reserved.
Foundations of Health Information Management, 5th edition
Davis
Handouts for
6 Financial Management
HANDOUT 2
Math Practice
The CFO has asked you to use facility data to determine reimbursement for a proposed
new service that is estimated to treat a given number of patients from five specialty
DRGs. She also wants to know how the proposed new patients would affect the facility’s
CMI (currently 1.995). Calculate the missing information in the table.
DRG
Relative
Weight
Blended
Rate
Payment per
Patient
Estimated No.
of New Patients
Expected Total
Reimbursement
Total
Weights
A
0.1327
$2940
1.
650
2.
3.
B
2.162
$2940
4.
200
5.
6.
C
3.07
$2940
7.
200
8.
9.
D
0.8122
$2940
10.
400
11.
12.
E
3.003
$2940
13.
150
14.
15.
16. What is the estimated total reimbursement for all patients if the new service is added? ____________
17. What is the CMI for the new DRGs? ___________________________
18. The current CMI of 1.995 was calculated on a patient volume of 19,000, with total relative weights of
37,905.00. If the proposed expansion of services is implemented, what is the new CMI?___________
Copyright © 2020 by Elsevier, Inc. All rights reserved.
Foundations of Health Information Management, 5th edition
Davis
______________________________________________________ Chapter 6 Financial Management
3
Handouts for
6 Financial Management
HANDOUT 3
Math Practice
1. If a physician practice considers purchasing a new phone system and in-house answering service
that would save the practice $1500 a month, and the system costs $45,000 to implement, what is the
ROI after one year? _____________________
2. What is the payback period for a piece of equipment that cost $7000 and saves $222 per month?
_________________________
3. Using straight line depreciation, how much would an $29,700 piece of equipment depreciate each
year on a 5 year depreciation schedule?
You need to check for variance in last quarter’s payroll. One of the coders, Shannon, left
the department at the end of July, so the department outsourced the coding function
until you filled the position in September.
Coder
July
Aug
Sept
$2,500
$3,500
$2,000
—-$8,000
–$3,500
$2,000
–$3000
$8,000
–$3,500
$2,000
$2,250
–$8,000
Shannon
Jessie
Lurline
Larson
Outsourcing
Expected
Actual
4.
5.
6.
Variance
7.
8.
9.
Total Budgeted
Amount
$7,500
$10,500
$6,000
—-$24,000
10. What is the total variance for the 3-month period from July to September? _________________
11. Lurline makes $24,000 per year and receives a 5% raise effective January. What is Lurline’s new
monthly salary? _______________________
Copyright © 2020 by Elsevier, Inc. All rights reserved.
Foundations of Health Information Management, 5th edition
Davis
4
Chapter 6 Financial Management _______________________________________________________
Handouts for
6 Financial Management
HANDOUT 4
Critical Thinking
1.
Why would a private insurance company want to participate in the Marketplace created by the ACA, or
state-based exchanges?
2. Why did Medicare move to a prospective payment system?
3. At the plastic surgery center, a new piece of technology offers a cyrolipolysis procedure to freeze fat
cells and break them down in a localized area. The provider thinks it’s a good idea to buy the machine,
which costs $50,000. What information would you need and what decision-making processes would
you perform before approving or denying the purchase?
Copyright © 2020 by Elsevier, Inc. All rights reserved.
Foundations of Health Information Management, 5th edition
Davis
Handouts for
7 Statistics and Data Analytics
PRETEST
1. What is a defining feature of health informatics?
a) use of patient data
b) use of technology
c) use of predictive statistics
d) use of primary data
2. Which is the database query one would use to sort a report of the number of Medicare CHF cases for
September?
a) Patient marital status
c) Socioeconomic status
b) Patient age
d) Diagnosis
3. What type of data is average length of stay (ALOS)?
a) nominal data
b) ordinal data
c) interval data
d) ratio data
4. What is the median?
a) the average of the values
b) the midpoint of the values
c) the most common value
d) the highest value
5. The number of observations in a category divided by the total number of observations multiplied by
100 is the:
a) percentage
c) skewedness
b) average
d) standard deviation
6. The total number of patients in the hospital at any given time is called the:
a) histogram
c) discharge disposition
b) key performance indicator
d) census
7. Within a(n) ____________________, a sample is a small group.
a) relational database
c) data set
b) aggregate set
d) population
8. A patient abstract is ____________________ data.
a) tertiary
b) ancillary
c) secondary
d) demographic
9. Data that are specific to a procedure, disease, or diagnosis are collected in a(n)
a) outside agency
c) population
b) TJC survey
d) registry
10. A patient who was admitted on June 13 and was discharged on June 30 had a length of stay of
______ days.
a) 16
c) 18
b) 17
d) 19
11. One would use a ____________________ to illustrate that, of the 500 discharges for September,
380 were Medicare, 70 were Medicaid, 25 were insurance, 25 were self-pay.
a) pie chart
c) bar graph
b) histogram
d) table
_________________________________________________ Chapter 7 Statistics and Data Analytics
1
Handouts for
7 Statistics and Data Analytics
HANDOUT 1
Vocabulary Review
1. The process of extracting information from raw data to reveal trends and optimize organizational
efficiency is called ________________________________________.
2. _______________________________________ is data taken directly from the patient or the original
source. The patient’s health record contains this type of data.
3. To ________________________ is to remove patient-identifying information from a health record.
4. The adjusted mean is calculated by removing ____________________________________.
5. The ___________________________________________ holds that a large number of means tend
to distribute symmetrically, approaching a normal distribution.
6. ________________________________________ are calculated by adding the admissions to the
previous day’s census, subtracting the discharges, and then adding the patients who were admitted
and discharged on the same day.
7. When conducting research, the anticipated answer to the question is called the
___________________.
8. A study that uses both quantitative and qualitative methods is called _________________________.
9. A listing of patients by attending physician creates what is called the _________________________.
10. A(n) _____________________________is a collection of data specific to a disease, diagnosis, or
procedure, the purpose of which is to study or improve patient care.
11. A(n) _____________________________ is a modified bar graph representing continuous data. Each
bar represents a class interval; the height of the bar represents the frequency of observations.
Copyright © 2020 by Elsevier, Inc. All rights reserved.
Foundations of Health Information Management, 5th edition
Davis
Handouts for
7 Statistics and Data Analytics
HANDOUT 2
Calculating Institutional Statistics
The CEO is concerned about the summer occupancy rates the Behavioral Health Unit, which has
15 licensed beds. He has asked you to give him statistics on the occupancy rates for June, July,
and August of the past year.
Behavioral Health Unit Statistics
IPSDs
June
70
July
65
August
99
1. What is the occupancy rate, rounded to a whole number, for June? ____________
2. What is the occupancy rate, rounded to a whole number, for July? ____________
3. What is the occupancy rate, rounded to a whole number, for August? ____________
Below is shown the second quarter statistics for St. Anthony’s Hospital from April 1 to June 30.
Use the information to calculate the statistics in questions 4 through 13 to two decimal places.
Admissions
Discharges
(including deaths)
Inpatient service days
Total lengths of stay
Bed count
Mortality data
Operations
Miscellaneous
Adults and children
Newborns
Adults and children
Newborns
Adults and children
Newborns
Adults and children
Newborns
Adults and children
Newborns
Total adults and children:
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