HSM 340 Week 8 Final Exam (GRADED A) Questions and Answer elaborations | 100% VERIFIED

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HSM 340 Week 8 Final Exam 1. (TCO 4) When would it make sense to use a flexible budget as compared to a forecast budget? Flexible budgets are used by business to compare the actual figures with t... he budgeted numbers. This budget uses real numbers to calculate the difference between how much has been budgeted & how much has actually been spent or earned in a specific category. A business whose main operations are based on the production of goods or services, a flexible budget makes the most sense. As the cost of production fluctuates based on how much you sell, you can predict the financial results of meeting or exceeding revenue projections. This budget allows the business to completely align their business costs & revenues with real figures from the previous reporting period. Flexible budget report has four columns to show the budget category -- such as mortgage, salaries, sales & so forth -- the budgeted amount for that category, the actual amount spent or earned on that category & the variance between these amounts. Question 2. 2. (TCO 7) Explain the difference between a horizontal merger & a vertical merger. A business used two business strategies to achieve its objectives & these two strategies are; horizontal & vertical mergers. These mergershelp to achieve objectives like growing your business, entering new markets, increasing revenue or educing costs. Horizontal & vertical mergers are alternatives to making internal investments &may help you achieve your objectives in a shorter time & at lower cost. Horizontal & vertical mergershave different aims & can help you achieve different growth objectives. Horizontal merger is more rofitable if you want to increase revenues or want to widen your product range. But if you want to educe your costs, you need to go for vertical merger. A horizontal merger takes place when two companies offering similar, or compatible, products or services to the same market combine under sngle ownership. On the other hand vertical merger occurs when business have to increase their rvenues by improving efficiency & by reducing the costs. Question 3. 3. (TCO 1) Describe the Outpatiet Code Editor. The Outpatient Code Editor (OCE) software wa developed to ensure accurate coding by detecting potential problems in the coding of claims data. iagnoses are coded by ICD-9-CM classification; procedures are coded by HCPCS classification. Tis has become an important tool for hospitals & other facilities with outpatient billing. It combines editing logic with the new Ambulatory Payment Classifications (APC) assignment program desiged to meet mandated Medicare outpatient prospective payment system (OPPS) implementation. Differnt software functions are also performed by this software; like assigning APCs, assigning HCFA-dsignated service indicators, assigns payment indicators, computing discounts, determining disposition ofclaims, determining disposition of the claim & determining the packaging details.The OCE progam screens each procedure code against: a list of approximately 2200 Ambulatory Surgical Center (ASC) procedures; a list of "Out of Scope" procedures; & the entire CPT code list, including all recent reases. Question 4. 4. (TCO 1) What is the primary provision of the EMTALA. MTALA was enacted by Congress in 1986 as part of the Consolidated Omnibus Budget econciliation Act (COBRA) of 1985. Its primary provisions includes three obligations by hospitals; firs is any individual who comes & request for medical screening examination must receive the emrgency medical condition. The hospitals cannot delay the examination due to insurance coverage or methods of payment. Secondly, the existence of emergency condition provide the emergncy condition to bring stabilization. As per the EMTALA provisions, If the hospital does not have the capability to treat the emergency medical condition, an "appropriate" transfer of the patient to another hospital must be done. Third hospitals with specialization are under obligation to accept transfers from hospitals who lack the capability to treat unstable emergency medial conditions. In a condition where the individual who has been transferred in an unstable emergency medical condition from another hospital in violation of EMTALA must be reported in the CMS or the state survey agency. Question 5.5. (TCO 3) Use the following data to calculate the variances in problem. This study source was downloaded by 100000849840424 from CourseHero.com on 10-06-2022 00:56:45 GMT -05:00 Your hospital has been approached by a major HMO to perform all their MS- DRG 470 cases (major joint procedures). They have offered a flat price of $10,000 per case. You have reviewed your charges for MS-DRG 470 during the last year & found the following profile: Estimate the variable cost per MS-DRG 470 using the departmental cost/charge ratios & variable cost percentages. (Points : 10) Variable Cost percent (VC%) = Variable Cost (VC) / Sales Revenue (SR) 80% = VC / 15,000 .80 x 15,000 = VC 12,000 = VC 6. (TCO 2) How are revenues & expenses defined under accrual accounting? (Points : 10) Under accrual accounting, the revenues & expenses are matched with revenues on the income statement when the expenses expire or title has transferred to the buyer, rather than at the time when expenses are paid. Under this accounting revenues are recognized when when both of the following conditions are met: a. Revenue is earned. b. Revenue is realized or realizable And Expense is recognized in the period in which related revenue is recognized. (TCO 2) What is an accounting entity? An accounting entity is a business which requires maintenance of separate set of accounting records. The business should connect in obviously identifiable economic activities, control economic resources, & be segregated from the personal transactions of its officers, owners, & employees. Examples of accounting entities are corporations, partnerships, & trusts. It can also be a business or any subdivision of a business that can engage in economic activities. It also has economic resources & assets that can be accounted. 8. (TCO 5) Define an annuity A annuity is a financial product sold by financial institutions & it is designed to accept & grow funds from an individual & then, upon annuitization, pay out a stream of payments to the individual at a later point in time. During This study source was downloaded by 100000849840424 from CourseHero.com on 10-06-2022 00:56:45 GMT -05:00 retirements years, annuities are primarily used as a means of securing a steady cash flow for an individual . Different factors are involved in making annuity structure like duration of time that payments from the annuity can be guaranteed to continue. 9. (TCO 5) What avenues are available for for-profit healthcare providers to increase their equity position? Nonprofit hospitals have physical plant needs (upgrades, renovations, expansions), outstanding bond debts, & pension challenges, all of which require large amounts of capital, which may be most readily available from private equity firms. (TCO 6) What is the working capital cycle & why must it be managed? Working capital is the capital require by business to run its daily operations. It is the excess of current assets over current liabilities. Managing of working capital is very important & efficient. It is important from both point of view liquidity & profitability. During poor management in the working capital , the funds remain unnecessarily tied with the idle assets & thus company reduced its liquidity & also does not come sin the position of investing in the production of assets like plant & machinery. (TCO 6) Define working capital. What is the difference between working capital & net working capital? Working capital is the capital require for daily operations of the business & it contains current assets but net working capital is defined to be the difference between current assets & current liabilities. Non-cash working capital looks at the difference between non- cash current assets & current liabilities. In investment analysis, increases in working capital are viewed as cash outflows, because cash tied up in working capital cannot be used elsewhere in the business & does not earn returns. 12. (TCO 5) Explain from your findings in problem 6 why the investment increases in value when the number of compounding periods increases? Compound interest can significantly affect the future value of some investments. When the number of compounding periods in a year & over the life of the investment directly affect the compound interest it give you the clear benefits . The more compounding periods, the stronger the affect on future investment value. The more interest-posting dates, the more compounding This study source was downloaded by 100000849840424 from CourseHero.com on 10-06-2022 00:56:45 GMT -05:00 [Show More]

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