CHAPTER 10 Questions
Assignment Exercise 10–1: Components of Balance Sheet and Statement of Net Income
Refer to the Metropolis Health System (MHS) Supplemental Information at the back of the Examples and Exercises section. Use the MHS comparative Balance Sheet, Statement of Revenue and Expenses, and Statement of Fund Balance for this assignment (above). I’ve attached the chart for you to use. Fill it in completely.
Required
Identify the following MHS Balance Sheet components. List the name of each component and its amount(s) from the appropriate MHS financial statement.
• Current Liabilities
• Total Assets
• Income from Operations
• Accumulated Depreciation
• Total Operating Revenue
• Current Portion of Long-Term Debt
• Interest Income
• Inventories
CHAPTER 12 Questions
Assignment Exercise 12–1: Unadjusted Rate of Return
Metropolis Health Systems’ Laboratory Director expects to purchase a new piece of equipment. The assumptions for the transaction are as follows:
• Average annual net income = $70,000
• Original investment amount = $410,000
• Unrecovered asset cost at the end of useful life (salvage value) = $41,000
Required
1. Compute the Unadjusted Rate of Return using the original investment amount.
2. Compute the Unadjusted Rate of Return using the average investment method.
Chapter 10
10-1
1. nonstandard clearing house
2. London bills of Mortality
3. Systemized nomenclature of Pathology
4. American Psychiatric Association
5. Current Procedure Terminology
True/False
6. F
7. T
8. T
9. F
10. T
10-2
1. T
2. F
3. T
4. F
5. T
6. T
7. T
8. F
9. T
10. F
10-3
1. T
2. T
3. F
4. F
5. T
6. F
7. F
8. F
9. F
10. T
Fill in the blank
11. Physician services
12. outpatient perspective payment systems
13. Clinical pathology
14. Revenue cycle
15. National employer identifier
Chapter Review
1. d
2. c
3. c
4. d
5. d
True/False
6. T
7. F
8. F
9. T
10 T
Fill in the blank
11. claims administration, utilization
12. Medicaid
13. CHAMPUS
14. SCHIP
15. Claims administration
16. Subscribers
17. Self-insurance plan
18. PACE programs
19. Workers compensation
20. Indian health services
21. Unnecessary cost
22. Fraud
23. National electronic standard
24. Pre established
25. Retrospective
26. Civilian employees
27. Copay
28. Deductible
29. HMOAA 1973
30. Cost builder
Short answer
31. Medical nomenclature is vocabulary of clinical and medical terms. Coding system organizes a medical nomenclature according to similar conditions, diseases, procedures and services, and established codes. Also called classification system.
32. The intent of standard coding guidelines is to simplify claims submission for health care providers who deal with multiple third party payer and to improve data quality.
33.Public domain refers to computer resources, normally software which is available for download and usage for free. Public domain software is normally created, supported, and updated by end users.
34. The new codes in the ICD-10 system have seven characters and are alphanumeric. The capital letters “I” and “O” are not used since they are too easily confused with the numbers “1” and “0.”No punctuation is used in the ICD-10 classification. In the ICD-9 International Classification of Diseases, codes are mostly numeric. Categories and subcategories are used to provide the greatest detail to a diagnosis code. The codes referenced in ICD-9 can have one, or sometimes, two numbers after a decimal which represent the categories and subcategories of each diagnosis code.
35. SNOMED CT (Systematized Nomenclature of Medicine — Clinical Terms) is a standardized, multilingual vocabulary of clinical terminology that is used by physicians and other health care providers for the electronic exchange of clinical health information.
According to the International Health Terminology Standards Development Organization (IHTSDO), which distributes the standard, SNOMED CT currently contains more than 300,000 medical concepts, divided into hierarchies as diverse as body structure, clinical findings, geographic location and pharmaceutical/biological product. Each concept is represented by an individual number and several concepts can be used simultaneously to describe a complex condition.
By using numbers to represent medical concepts, SNOMED CT provides a standard by which medical conditions and symptoms can be referred, eliminating the confusion that may result from the use of regional or colloquial terms. The numerical reference system also facilitates the exchange of clinical information among disparate health care providers and electronic medical records (EMR) systems.
36. The franklin health assurance company was the first United States Company to provide private health care coverage. Prior to the early 1900’s most people paid cash for health care services with some choosing not to seek health care. The first prepaid health care plans now called managed care were introduced in 1920. Group health care insurance became available to full time employees as a benefit in the 1940’s. The Taft Harley Act of 1947 created third party administrators and by 1950 insurance companies began offering major medical insurance which provided coverage for catastrophic or prolonged illnesses. The Dependents of medical care act of 1956 provided health care to dependents of active military personnel, amendments to the SSA created Medicare and Medicaid in 1965.
37. A Prospective Payment System (PPS) is a method of reimbursement in which Medicare payment is made based on a predetermined, fixed amount.The retrospective payment method is considered a fee-for service payment method. This methodology involves insurance companies and other third parties making payments after the provider has rendered a service, based on what the provider charges for the service rendered.
38. A charge master lists all the procedures, services, and supplies provided to patients by a hospital. Charges for each may also appear.
39. Identifiers
Identifiers are HIPAA standards that will create a uniform and centralized way to designate an employer, provider, health plan or patient in electronic transactions.
Establishes a standard unique ID, adopting the NPI (National Provider Identifier) as the standard identifier for all health care providers under HIPAAThe final rule was published on 1-23-04
40. A Local Coverage Determinations (LCDs) is a policy created by Medicare Administrative Contractor (MAC). The Benefit Improvement Protection Act (BIPA) §522 created Local Coverage Determinations (LCDs) that consist only of reasonable and necessary information. LCDs are carrier developed coverage policies, pertaining to services or items not addressed in NCDs or program manuals. LCDs contain coding and utilization guidelines as well as descriptive passages. LCDs sometimes contain some CMS language as well, which would be italicized. LCDs are developed for various reasons, some of which are:
1. To define the appropriate use of new technologies.
2. To address services with an abuse history or potential.
3. High volume, high dollar services.