Exam 14: Health Care Providers

During a particular year,a not-for-profit hospital provides services that at standard rates would be billed at $400 million.This amount includes $20 million of charity care.Of the remaining $380 million,the hospital estimates that $240 million will be billed to third-party providers which,per contractual agreements,will pay only 75 percent of the standard rate i.e. ,$180 million).Of the $140 million to be billed to individuals,the hospital estimates that $80 million will have to be written off as bad debts.The hospital should recognized net patient care revenue of

Prepaid health care plans that earn revenue from agreements to provide services record revenue when services are rendered.

In accounting for health care organizations,restricted net assets are:

During the current year,a voluntary health and welfare organization receives $800,000 in unrestricted pledges.Of this amount,$300,000 has been designated by donors for use next year to support operations in the pharmacy.If 20 percent of the unrestricted pledges are expected to be uncollectible,what amount of unrestricted support should the organizations recognize in its current-year financial statements?

Health care organizations provide uncompensated patient care as a matter of policy but not law.

Based upon St.Thomas Hospital's established billing rate structure,the hospital would have earned patient service revenue of $5,100,000 for the year.However,the hospital does not expect to collect this amount because of charity care provided in the amount of $600,000 and contractual allowances to third-party payers of $450,000.How much should the hospital record as patient service revenue for the year?

In prior years,a not-for-profit hospital received funds from a donor who restricted the use of those funds to providing nursing scholarships.During the current year $8,000 of scholarships were awarded.These scholarships should be reported

The statement of financial position of a not-for-profit health care organization should distinguish among unrestricted,temporarily restricted,and permanently restricted net assets.

Charity care provided by a health care organization would be recorded in a contra-revenue account.

Restricted funds of a not-for-profit nursing home are not available for current use;however,the income earned on the funds is available.

The LRF Healthcare Foundation donated 1,800,000 as a permanent endowment to a senior citizen health and welfare organization during the year.The foundation stipulated that the income and investment appreciation be used to maintain its preventive care center for the elderly.The endowment principal had an investment appreciation of $120,000 and investment income of $160,000.The organization spent $140,000 to maintain its preventive care center during the year.What is the amount of change in temporarily restricted net assets that the organization should report?

Not-for-profit hospitals are accounted for similarly to businesses but must adhere to the FASB's standards for not-for-profit entities.

A not-for-profit hospital signs a contract with an insurance company in which the company agrees to pay the hospital $9 million in capitation fees for the year July 1,2014,through June 30,2015.Between July 1,2011 and December 31,2011,the hospital provides services that,at its standard rates,would bill at $5.1 million.Between January 1,2011,and June 30,2012,it provides services that it would bill at $4.2 million.For the year ending December 31,2011,the hospital should recognize capitation revenue of

During the current year,St.Louise's Hospital a not-for-profit entity)earned,based on its normal billing rate,$1 million in patient service revenues.Many of these patients belong to a health plan that has an established pay schedule.Based on the specific services rendered to members of the plan,the hospital estimates that $0.05 million will not be collectible from the plan or the patient.Some of the patients are hospital employees.These employees are given a 50 percent discount on the services rendered.Employee discounts for the current year total $0.01 million.Some of the patients are uninsured and the hospital estimates that,of the amount billed to the uninsured patients,$0.2 million will not be collectible bad debts).The amount of net patient service revenues for St.Louise's Hospital for the current year is

The amount of unrestricted revenue that should be recognized by Pelican in the year of the gift is

A hospital carried a 2-year malpractice insurance policy that allows for retroactive premium adjustments based on experience claims actually incurred).The basic premium is $300,000,payable in advance.At the end of the first year the hospital estimates that it will have to pay an additional $80,000 in premiums as a result of claims filed in the current year and it estimates that it will incur additional premiums in the second year of $100,000 as a result of claims filed in the second year.The amount of insurance expense that should appear on the financial statements at the end of the first year should be

In the process of general purpose external financial reporting,a health care organization is required to present

A specialized health care facility normally purchases its medicines.However,this month a wealthy philanthropist donates the medicines.The donated medicines should be recorded at fair market value and should be credited to:

An accountant has encountered a perplexing financial reporting issue related to the hospital for which she is preparing financial statements.The issue is not specifically addressed by FASB statements.To which of the following sources would the accountant probably look first for industry-specific guidance?

Medicaid is a federally sponsored and managed health care program for retirees.