Deck 12: Financial Planning, Management, and Budgeting

Question 1

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

Answer 1

True

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

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.

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:

A) Productive time.
B) Full-time equivalent.
C) Taxable hours.
D) Accountable equivalent.

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?

A) Number of units of care
B) Insurance deduction rate
C) Bad debt
D) Allowances

Question 7

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

A) Medically necessary and evidence-based.
B) Skilled and evidence-based.
C) Functional and skilled.
D) Medically necessary and skilled.

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):

A) CPT code.
B) ICD code.
C) G-code.
D) HCPC code.

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:

A) Capital allocation.
B) Expense accounting.
C) Depreciation.
D) Overhead.

Question 10

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

A) Volume-driven costs.
B) Direct costs.
C) Variable costs.
D) Net expense.

Question 11

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

A) Hospitals
B) Outpatient clinics
C) Skilled nursing facilities
D) Hospitals, outpatient clinics, and skilled nursing facilities

Question 12

Which of the following is not true regarding productivity?

A) It is a measure of the time spent in billable activity during a predetermined period.
B) It is affected only by billable or productive time.
C) Expectations for productivity vary a great deal from setting to setting.
D) It is commonly expressed as a percentage subset of the total amount of time worked in a day or week.

Question 13

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

A) Tracking accounts
B) Managing risk
C) Monitoring cash flow
D) All of the above

Question 14

Which of the following best defines the term fiscal year?

A) A period of time representing one full budget cycle
B) A period of time representing a federal tax period
C) A period of time representing a staff recruitment cycle based on graduation dates
D) A period of time representing a year of performance used to determine staff merit increases (pay increases)

Question 15

Which of the following best defines the term net revenue?

A) The total revenue charged after multiplying total units provided by charge per unit during a specific period
B) The total revenue charged minus any expenses such as salary, rent, and equipment purchased
C) Gross revenue minus any allowances, deductions, and anticipated bad debt that are applied
D) The revenue that varies according to the volume of work produced

Question 16

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

A) The number of hours paid to a full-time employee during a designated time period, including payment of vacation or other benefit time
B) The productive hours paid to a full-time employee equivalent to one caseload in a particular setting
C) The volume of work produced by one full-time employee who is meeting established productivity expectations
D) The number of hours used to determine if a full-time employee has reached "exempt" status and must be paid overtime

Question 17

The term productivity can best be defined as:

A) Care that is provided that proves to be beneficial to the patient in retrospective reviews.
B) The number of rehabilitation treatments provided to a patient during a Medicare-approved acute hospital stay.
C) Care that is provided that is medically necessary and deemed to be a skilled service.
D) The number of units of billed care or the percentage of time spent in billable activity during a predetermined period of time.

Question 18

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

A) The correct ICD code and the correct CPT code.
B) Medical necessity and the correct CPT code.
C) Medical necessity and qualifying as skilled service.
D) Qualifying as skilled service and the correct ICD code.

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?

A) Capital improvements
B) Capital equipment
C) Capital investments
D) Capital depreciation

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):

A) ICD code.
B) HCPCS code.
C) CPT code.
D) CO code.