Deck 10: Financial Management

Question 1

In the acute care setting, patient condition can fluctuate quickly. Choose the correct CMS reimbursement requirement for history and physical completion for inpatient care.

A)The requirement shortens the timeframe for completion of the history and but expands the number of permissible professional categories of individuals who may perform it for full payment
B)The history & physical completion timeframe remained unchanged for eligible payments
C)The history & physical completion timeframe has been lengthened, but only payable at 70%
D)The requirement expands the timeframe for completion of the history and physical and expands the number of permissible professional categories of individuals who may perform it for full payment

Answer 1

The requirement expands the timeframe for completion of the history and physical and expands the number of permissible professional categories of individuals who may perform it for full payment

Question 2

In the absence of a state law specifying the timeframe for authentication of verbal orders, the nurse manager must assure CMS verbal order authentication within:

A)12 hours
B)24 hours
C)36 hours
D)48 hours

Answer 2

48 hours

Question 3

CMS guidelines for inpatient postanesthesia evaluation reimbursement states:

A)The nurse manager must evaluate the patient personally
B)The assistant unit director must evaluate the patient personally
C)Postanesthesia evaluation for inpatients must be completed and documented by only the individual who administered the anesthesia
D)Postanesthesia evaluation for inpatients must be completed and documented by any individual qualified to administer anesthesia instead of only the individual who administered the anesthesia

Answer 3

Postanesthesia evaluation for inpatients must be completed and documented by any individual qualified to administer anesthesia instead of only the individual who administered the anesthesia

Question 4

CMS financial reimbursement guidelines state that upon inspection, medications must be secured at all times. The oversight role of the nurse manager is to:

A)Make sure that the nurse manager and the shift supervisor are the only people holding keys to locked schedule narcotics
B)Make sure that locked schedule narcotic cabinets are accessible by combination lock only
C)See that all drugs and biologicals are kept in secure areas, and locked when appropriate
D)See that all attending physicians as well as the shift supervisor are the only people holding keys to locked schedule narcotics

Question 5

In recent years, healthcare professionals have become visibly more accountable. Nurse managers are in the front line of dealing with a wide range of fiscal interests, and the repercussions if things go wrong. Challenges in financial management can include health care economics and health care policy. Generally, financial management challenges are presented in the areas of:

A)Hospital policy
B)Staffing vs. patient care load
C)Lack of formal education in the financial field
D)All of the above

Question 6

Successful nurse managers provide ever-increasing justifications of budget variances, labor costs, staffing effectiveness, return-on-investment, and a host of other financial indicators that drive the "bottom line." An essential component of your budgeting process is identifying the goals or drivers used to measure your financial performance. Successful financial management is measured on the basis of three goals:

A)Performance, return-on-investment, variances
B)Staffing, patient care load, supply and demand
C)Cost control, optimization of available resources, maximized outcomes
D)Cost control, variances, performance

Question 7

Nurse managers should be aware of their role in engaging staff nurses in the financial management aspect of their units. Studies indicate the most effective way a nurse manager can keep staff nurses engaged is to:

A)Follow administrative rules to the letter
B)Involve staff nurses and seek group input which addresses specific concerns
C)Involve administrative oversight initiatives
D)Offer personal incentives

Question 8

State laws affect the ability of the nurse manager to be fiscally responsible in ways which continue to evolve as health care reform comes into implementation. The major concern in fiscal oversight in the future will be relationship dependent upon:

A)State budget allocations to Medicaid and Medicare
B)State budget allocations to health care organizations
C)State tax incentives to health care organizations
D)All of the above

Question 9

Health policies usually emerge in the form of laws, rules and regulations, judicial decisions, resource allocations, and broad global health care budgets. Nurse manager participation in the policy process as mentor and facilitator to staff nurses ensures inclusion of nursing's unique perspective into private and governmental heath policy decisions. A framework to streamline health policy analysis in order to enhance nursing's involvement in the hospital health policy agenda has been popularized in the professional setting over the last few years. It goes by the acronym PAM.PAM stands for

A)Potential Administrative Model
B)Post-Analytical Modalities
C)Past Administrative Money
D)Policy Analysis Model

Question 10

Federal law provides both legal and ethical constraints which can be affected by nurse manager oversight of funds allotted to the department. Key principles that affect care of patients and impact departmental fiscal concerns are:

A)Justice, benevolence, fairness, and autonomy
B)Competency, education and licensure
C)Fairness and equality
D)Competency, autonomy and education

Question 11

An understanding of healthcare economics and healthcare public policy as it applies to the delivery of patient care includes reimbursement, Medicare, Medicaid, managed care, third party providers, challenges to the current healthcare policies and key legislative initiatives at local, state and national level. Development methodologies the nurse manager must have a basic understanding of include:

A)Creating a budget
B)Monitoring a budget
C)Revenue forecasting
D)A, B and C

Question 12

In order to accomplish goals set by administrators and have a grasp of the hospital financial process, it is imperative that the nurse manager understand basic financial terminology used in healthcare. The following questions are basic financial terminology used in the healthcare setting.What are staffed beds?

A)Staffed beds are beds occupied by patients which require skilled nursing attendance
B)Staffed beds are beds occupied by patients for less than one 24 hour period
C)Staffed beds are beds occupied by patients for longer than 12 hours in a 24 hour period
D)Staffed beds are those in service and patient ready for more than half of the days in the reporting period

Question 13

What is the definition of inpatient discharges?

A)Patients who have been discharged and formally released from the hospital after 24 hours
B)Patients who have been discharged and formally released from the hospital after 12 hours
C)Patients who have been discharged and formally released from the hospital after 4 hours
D)The termination of the granting of lodging in the hospital and the formal release of the patient including patients admitted and discharged the same day

Question 14

What is the definition of one inpatient day?

A)A patient day is the unit of measure denoting lodging provided and services rendered to inpatients between the census taking hours (usually at midnight) of two successive days.
B)A patient day is the unit of measure denoting lodging provided and services rendered to inpatients between censuses taking hours 12 hours apart
C)A patient day is the unit of measure denoting lodging provided and services rendered to inpatients between the census taking hours (usually at midnight) of two successive days
D)A patient day is the unit of measure denoting lodging provided and services rendered to inpatients formally admitted to the hospital regardless of time

Question 15

Accounting skills are useful to nurse managers in carrying the day-to-day activities of their respective departments. Furthermore, nurse managers must have a working knowledge of the basic reporting formats common to the acute care setting which directly impacts their charge. Choose the correct reporting format which corresponds to the appropriate activity.One of the most important financial documents of any nursing department is the balance sheet. The balance sheet gives you a detailed picture of your department's financial position at a given point in time. The best definition of a nursing department balance sheet is:

A)The balance sheet is a 'snapshot' in time of the assets and debts and represents the value of the nursing department at that time
B)The balance sheet is a summary of all incoming and outgoing transactions, credits and debts associated with a specific nursing department at a given point in time
C)The balance sheet is a summary of account balances on a given date, typically due at the end of a month, quarter, or annually
D)The balance sheet is a statement of net worth hospital administrators look at when deciding financial unit allotments

Question 16

An important step in controlling expenditures and ultimately profit is by creating a budget. With ever narrowing profit margins, each department needs to keep careful track of expenses. Some things included in a departmental budget are salaries, office expenses, utilities, repairs, and maintenance. The following questions relate to creating your departmental budget, sometimes called an organizational budget.Departmental budgets are usually broken down with two main but equally important categories. They are:

A)Revenue and forecasting
B)Incoming and outgoing
C)Revenue and expenses
D)Profit and loss

Question 17

Inside the expenses category in your departmental budget, subsets of this category should include:

A)Personnel, paid ETO days, salaries, taxes and employee health contributions
B)Employee sick hours lost, unaccounted for work time, measured losses
C)Office supplies, employee training, travel, pool nurse debt
D)A and C

Question 18

Inside the revenue category in your departmental budget, subsets of this category should include:

A)Income from procedures, inpatient hospitalization from Medicare and Medicaid, managed care, private insurers, and self-pay patients
B)Income from allotments, donations and write offs
C)Profit / loss undercharges, allotments and underpayments
D)Depreciation, undercapitalized expenditures, donations

Question 19

Choose the best definition of a budget:

A)A budget is an overall statement of revenue and expenses
B)A budget is a quantitative overview of profit, loss, revenue, and expenses
C)A budget is a statement of the plans and expectations of a defined area over a specified period of time
D)A budget is a statement of the plans and expectations of a defined area over a period of time longer than two weeks

Question 20

Budgeting provides a foundation for:

A)Expenditure control
B)Managing and evaluating financial performance
C)Cost overrun accountability
D)Staffing expenditure control

Question 21

The budget's purpose is to:

A)Allow management to project action plans and their economic impact on the future so that objectives of the organization are coordinated and met
B)Allow floor staff to provide anticipated patent care
C)Hire ancillary employees while controlling work hours
D)Provide a line-item monetary profit / loss projection

Question 22

Controlling is the process of comparing actual results projected in the budget. Two techniques for controlling budgetary performance are:

A)Variance analysis and position control
B)Profit and loss analysis
C)Real expenditures and forecasted expenditures
D)Cost ratio and overrun expenditures

Question 23

Budgets may be developed in various formats. An incremental budget is:

A)A line-item budget
B)A cost variance budget
C)A zero-based budget
D)An operational budget

Question 24

The advantage of an incremental budget is:

A)Line-item accountability
B)Simplicity
C)Easily understood
D)Methodology

Question 25

A zero-based budget requires nurse managers to:

A)Provide full accountability
B)Cut floor staff
C)Justify all activities and programs as if they were being initiated for the first time
D)Cut expenditures as if a new unit were in start-up

Question 26

The revenue budget represents:

A)Salary and non-salary items
B)Patient care income expected for the budget period
C)Expected revenues and expenses for the coming year
D)All of the above

Question 27

The expense budget represents:

A)Salary and non-salary items
B)Patient care income expected for the budget period
C)Expected revenues and expenses for the coming year
D)All of the above

Question 28

The best definition of a budget variance is:

A)The difference between the amount that was budgeted for a specific cost and the actual cost
B)Differences in the budget as a result of increases or decreases in patient volume
C)The difference between budgeted and actual nursing care hours provided
D)The difference between budgeted and actual hourly rates paid

Question 29

The best definition of a volume variance is:

A)The difference between the amount that was budgeted for a specific cost and the actual cost
B)Differences in the budget as a result of increases or decreases in patient volume
C)The difference between budgeted and actual nursing care hours provided
D)The difference between budgeted and actual hourly rates paid

Question 30

The best definition of an efficiency variance is:

A)The difference between the amount that was budgeted for a specific cost and the actual cost
B)Differences in the budget as a result of increases or decreases in patient volume
C)The difference between budgeted and actual nursing care hours provided
D)The difference between budgeted and actual hourly rates paid

Question 31

The best definition of a rate variance is:

A)The difference between the amount that was budgeted for a specific cost and the actual cost
B)Differences in the budget as a result of increases or decreases in patient volume
C)The difference between budgeted and actual nursing care hours provided
D)The difference between budgeted and actual hourly rates paid

Question 32

One of the most challenging aspects of a nurse manager's job is to accurately project the personnel budget for the upcoming fiscal year. Budget preparation requires knowledge of previous and future trends in care delivery, market information to predict changes in services offered, and unit productivity measures.The inclusive median salary for registered nurses is $26.00 per hour. Last year your department had a working budget of 98,892 total staff hours. Assume that the budgeted nursing care hours and pay rate is the basis used in the following questions.The hospital is attempting to reduce length of stay, so patient days are expected to decrease by 2%. Projected budget hours will be 98% of previous budget hours. The new total working budget hours will be:

A)96914 working hours
B)98330 working hours
C)99161 working hours
D)None of the above

Question 33

Inflation and raises are expected to raise salaries of registered nurses by 2.5% next year. The new median salary for registered nurses will be:

A)$26.60 per hour
B)$26.35 per hour
C)$26.65 per hour
D)$26.50 per hour

Question 34

What are the new total average monthly projected working hours for the 12 month period?

A)8076.16
B)8086.66
C)8086.16
D)8076.66

Question 35

Based on the new total average monthly projected working hours for the 12 month period and the new wage structure for registered nurses, your new budget in monthly nursing hours will cost:

A)$215,229.66
B)$216,292.70
C)$214,999.01
D)$215,229.76

Question 36

Based on the new total average monthly projected working hours for the 12 month period and the new wage structure for registered nurses, your new budget in annual nursing hours will cost:

A)$2,582,758.10
B)$2,582,158.10
C)$2,585,158.13
D)$2,588,758.10

Question 37

The nurse manager prepares a monthly financial statement that identifies actual revenues and expenses and compares those to the monthly break down of the annual budget. In order to effectively monitor the budget, the nurse manager must:

A)Compare each line-item to the projected budget
B)Compare yearly profit/ loss ratios for the last 36 months
C)Compare overall totals and amortize
D)None of the above

Question 38

A discrepancy in a line-item comparison of a monthly financial statement is called:

A)A variance
B)An unplanned expenditure
C)A revenue discrepancy
D)Hard costs

Question 39

Variances may be indicative of:

A)Errors
B)Necessary changes
C)Lack of control
D)All of the above

Question 40

Continued variances to budgets that are not supported by increased revenues will:

A)Result in a poor annual budget performance
B)Result in loss of department funding
C)Result in a poor department evaluation
D)Result in a departmental audit

Question 41

Why is it essential to consider goals and objectives when developing a budget?

A)It helps define services to be provided
B)It provides a roadmap of needed staff, supplies and services to be offered
C)It helps clearly identify variances
D)All of the above

Question 42

One duty of the nurse manager is analyzing the budget. The questions below are based on the more commonly used nursing department economic evaluation methods.What is cost analysis?

A)A measurement of the cost of a product, service or intervention
B)Costs spent per outcome achieved
C)Ratio of total costs to total benefits expressed in both dollars and benefit value
D)Comparison of interventions to achieve one quality-adjusted life year

Question 43

What is a cost-effective analysis?

A)A measurement of the cost of a product, service or intervention
B)Costs spent per outcome achieved
C)Ratio of total costs to total benefits expressed in both dollars and benefit value
D)Comparison of interventions to achieve one quality-adjusted life year

Question 44

What is a cost- benefit analysis?

A)A measurement of the cost of a product, service or intervention
B)Costs spent per outcome achieved
C)Ratio of total costs to total benefits expressed in both dollars and benefit value
D)Comparison of interventions to achieve one quality-adjusted life year

Question 45

Nurse managers use a budget variance report to gauge department performance by comparing one set of figures to another. A well-rounded budget variance report will address:

A)Trends
B)Overspending
C)Under spending
D)All of the above

Question 46

Nurse managers use variance tables to:

A)Show variances by item
B)Show variances by project
C)Show variances by budget period
D)All of the above

Question 47

Nurse managers use variance graphs to:

A)Spot trends
B)Spot discrepancies
C)Measure outcome goals
D)Measure benefits expressed

Question 48

One of the more difficult tasks nurse managers face is estimating the levels of floor staff, patient care levels, supplies and department overhead. Expense forecasting can be a challenge to any business, but the expense forecasting the business of healthcare can be daunting. In determining department staffing requirements, the nurse manager should include:

A)All overhead including capitol budgeting
B)Staffed beds and cost variance
C)Levels of staffing, vacation time and paid training time
D)Cost-benefit analysis

Question 49

In determining staffing requirements for expense forecasting, the nurse manager must take into account:

A)Intensity of care levels
B)Department or unit type
C)History of total unit census
D)All of the above

Question 50

Budget forecasting for staffing requires the nurse manager to include variables into the equation. Some of the more important variables that must be considered are:

A)Staffed beds, cost variance and levels of staffing
B)The difference between the amount that was budgeted for a specific cost and the actual cost
C)Unit type, month, day, shift and time
D)All of the above