The Old Payment Method or ____ Was Based on Charges

question 29

Multiple Choice

The old payment method or ____ was based on charges or a percentage of charges that did not promote best practices and quality care because the hospital was paid based on charges;the higher the charges were,the higher was the payment.

• A)retrospective payment system
• B)prospective payment system
• C)preferred provider organization
• D)Tax Equity and Fiscal Responsibility Act

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Definitions:

Variable Costs

Expenses that change in proportion to the production or sales figures, like direct labor and raw materials.

Break-Even Point

The level of activity or sales volume at which total revenues equal total costs, resulting in no net loss or gain.

Automated Equipment

Machinery and tools that operate with minimal human intervention, often used to enhance efficiency in manufacturing or production processes.

Contribution Margin Ratio

A financial ratio that shows how much of a company's sales revenue is available to cover its fixed costs and contribute to net profit, calculated as contribution margin divided by sales revenue.