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Unit Four Assignment Healthcare Finance

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Unit 4 Assignment

Short Answer (2 @ 5 = 10)

1. List and discuss the three payment-determination bases.

Cost base - —A payment system that uses provider cost, as opposed to charges, as the starting point to determine the amount of payment. A cost-payment basis simply means that the underlying method for payment is the provider’s cost. The rules for determining cost are specified in the contract between the payer and the healthcare provider.
Fee-schedule -—The actual payment is predetermined and is unrelated to either the provider’s cost or the provider’s actual prices. A fee-schedule basis means that the actual payment is predetermined and is unrelated to either the provider’s cost or the provider’s actual prices
Price related -—The provider is paid for services based on some relationship to its total charges or price for the services delivered to the patient. A price-related payment basis means the provider is paid for services based on some relationship to its total charges or price for the services delivered to the patient.

2. List and describe the three categories of net assets.

Unrestricted net assets —All net assets (including those that have been restricted by management, the governing board, contractual agreements, or other legal documents) not restricted by donors.
Temporarily restricted net assets – These are funds that can be used for a specific purpose only, or funds that may be released for a specific purpose only, funds that may be released for general purposes after a passage of time

Permanently restricted net assets – These are often of an endowment nature. Only the income of the fund can be used, and the principal cannot be used to fund any purpose

Multiple Choice (4 @ 4 = 16)

3. Which of the following is not a “principle” of financial accounting? A.

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