Question 1

Net revenue is equal to gross revenue minus any allowances, deductions, and anticipated bad debt.

Accepted Answer

Net revenue is calculated by subtracting allowances, deductions, and anticipated bad debt from gross revenue, providing a more accurate representation of the actual revenue expected to be received.

Question 2

The term fiscal year refers to the time period used by the federal government to assess taxes for private businesses.

Accepted Answer

The term fiscal year refers to a 12-month period that companies and governments use for accounting purposes and preparing financial statements, which may not necessarily align with the calendar year. It is not specifically for the federal government to assess taxes for private businesses.

Question 3

Costs that increase when volume increases and decrease when volume decreases are commonly referred to as variable costs.

Accepted Answer

Variable costs change in proportion to the level of production or business activity, increasing as volume increases and decreasing as volume decreases.

Question 4

Salary costs for social workers and case managers are an example of a direct cost that would be applied to most occupational therapy departments in traditional hospitals and inpatient rehabilitation hospitals.

Accepted Answer

Salary costs for social workers and case managers are typically considered indirect costs for occupational therapy departments, as these professionals do not directly deliver occupational therapy services but rather support the broader treatment and administrative framework within which occupational therapy is provided.

Question 5

The number of hours paid to a full-time employee during a designated time period, including payment of vacation or other benefit time, would best be called:

Accepted Answer

Full-time equivalent (FTE) is a term used to represent the number of hours paid to a full-time employee, including hours for work, vacation, or other benefits, to standardize the workload or payroll across different employment situations.

Question 6

To determine the gross revenue for a department, you need to identify the charges for each service provided and which of the following?

Accepted Answer

To determine the gross revenue for a department, it is essential to identify the charges for each service provided and the number of units of care (e.g., number of procedures, consultations, or products sold). This combination allows for the calculation of total revenue before any deductions or adjustments.

Question 7

Two key conditions that often must be satisfied to justify reimbursement are that services are:

Accepted Answer

The answer of Two key conditions that often must be...

Question 8

A type of code that identifies a specific diagnosis and is used to classify morbidity data from inpatient and outpatient records is a(n):

Accepted Answer

ICD codes, or International Classification of Diseases codes, are used globally to classify and code diagnoses, symptoms, and procedures. These codes are essential for morbidity and mortality statistics, and for billing and insurance purposes in healthcare.

Question 9

A method of allocating the cost of a major asset, such as a piece of capital equipment, over its useful life for tax and accounting purposes is best called:

Accepted Answer

Depreciation is the accounting method of allocating the cost of a tangible or physical asset over its useful life. It reflects how the asset's value decreases over time due to use, wear and tear, or obsolescence.

Question 10

Costs that vary with the volume of services provided would best be called:

Accepted Answer

Variable costs change in proportion to the level of services provided, making them directly tied to the volume of output.

Question 11

Medicare diagnostic-related groups, or DRGs, are a type of payment provided in which of the following settings?

Accepted Answer

Medicare diagnostic-related groups (DRGs) are a system used to classify hospital cases into one of approximately 500 groups, intended to cover all types of patients a hospital might treat. This system is used to determine how much Medicare pays the hospital, since patients within each group are expected to use a similar level of hospital resources. DRGs are specifically used for hospital payment, not for outpatient clinics or skilled nursing facilities.

Question 12

Which of the following is not true regarding productivity?

Accepted Answer

Productivity is influenced by a variety of factors beyond just billable or productive time, including efficiency, effectiveness, and the quality of work produced. It's not solely determined by the amount of billable time.

Question 13

Basic principles of accounting as identified by Ellexson include which of the following?

Accepted Answer

Ellexson's basic principles of accounting include tracking accounts, managing risk, and monitoring cash flow, thus encompassing all the options listed.

Question 14

Which of the following best defines the term fiscal year?

Accepted Answer

A fiscal year is a one-year period that companies and governments use for financial reporting and budgeting. It is often aligned with a budget cycle rather than a calendar year.

Question 15

Which of the following best defines the term net revenue?

Accepted Answer

Net revenue is defined as gross revenue minus any allowances, deductions, and anticipated bad debt. This calculation provides a more accurate representation of the actual revenue expected to be received.

Question 16

Which of the following best defines the term full-time equivalent (FTE)?

Accepted Answer

The term full-time equivalent (FTE) refers to the number of hours paid to a full-time employee during a designated time period, including payment for vacation or other benefit time. This measurement helps organizations understand their labor costs and workforce needs by standardizing the work effort across different employment types.

Question 17

The term productivity can best be defined as:

Accepted Answer

Productivity, in the context of healthcare and many other industries, is often measured by the amount of work done or services provided in a certain period of time. Choice D accurately reflects this by mentioning "the number of units of billed care or the percentage of time spent in billable activity during a predetermined period of time," which directly relates to the efficiency and output of work, making it the best definition of productivity among the given options.

Question 18

The two concepts that are used to determine if services provided under Medicare in hospital settings are appropriate as billed services are:

Accepted Answer

Medical necessity and the correct Current Procedural Terminology (CPT) code are essential to determine if services provided under Medicare in hospital settings are appropriate as billed. Medical necessity ensures that the services are needed for the diagnosis or treatment of a medical condition, while the correct CPT code accurately represents the specific services provided.

Question 19

A single piece of equipment that exceeds a predetermined amount (e.g., $5,000) and has a life span of longer than a predetermined period (e.g., 1 year) would best be called which of the following?

Accepted Answer

The answer of A single piece of equipment that exceeds...

Question 20

A type of code used by an occupational therapy practitioner to describe the type of services provided by an occupational therapy practitioner, a physical therapy practitioner, a physician, or other healthcare provider would best be called a(n):

Accepted Answer

The answer of A type of code used by an...

Quiz 12: Financial Planning, Management, and Budgeting