Exam 14: Health Care Providers

Daniel, an auditor, is performing a routine review of a not-for-profit hospital and notes the following account balances in the statement of activities for the fiscal year ending September 30, 2017: What amount should the hospital report as net patient service revenue in its statement of activities for the fiscal year ending September 30, 2017?

A consortium of physicians agrees to provide services to the employees of a large county government.The agreement calls for monthly payments from the county to the consortium in the amount of $200,000 per month.County employees are not billed for services rendered by the consortium.All county employees are required to use the consortium under their health care program (any services rendered to county employees by other physicians are not covered under the health plan).During the month the consortium performed services for county employees for which it would have billed $170,000.The consortium referred patients to other health care providers for services they could not perform.The consortium estimates that patients will be billed $10,000 for those services.The amount of revenue that should be recognized for the month by the consortium is

The services of Health Maintenance Organizations are prepaid and fixed.

"Variance power" refers to the ability

Sponsors of not-for-profit health care organizations generally include:

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

Hospital revenue usually includes which of the following?

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

Not-for-profit health care entities must provide information on the three categories of net asset donor restrictiveness.

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

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:

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

In 2016 St.Martin's Hospital received a $50,000 cash gift to be used to buy supplies and other items for the pediatric department of the hospital.In 2017, St.Martin's purchased puppets and other items to be used in explaining medical procedures to young children.The acquisition of the items causes a NET decrease in which class(es)of net assets?

As the comptroller of a hospital, you were just informed that one of the surgeons failed to remove an instrument from a patient's innards.The hospital is certain to be sued.How, if at all, should this information affect the hospital's financial statements?

The statement of activities must indicate net assets released from restriction and any transfers between funds.

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

A hospital estimates that, based on past experience, it will incur $5 million in malpractice claims as a result of services rendered in the current period.The hospital carries a malpractice insurance policy with a yearly $2 million deductible clause.The amount that should appear on its year-end financial statement as Claims Expense (Loss)should be

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

Capitation fees paid by HMOs to hospitals, physicians, and other medical groups generally are based on the number of persons covered and expected costs to be incurred rather than on actual services provided.

Intermountain Hospital, a not-for-profit health care provider, issued $70 million in term bonds to finance construction of a new wing at its main hospital.Terms of the bond issue require that $5 million of the proceeds of the bond issue be invested in U.S.government securities.The $5 million must be held until maturity of the bonds.The $5 million will increase which class of net assets?