CNML Test
1. DRGs Diagnostic-Related Groups: payment rate based on spe-
cific diagnoses
2. Prospective Pay-
ment System
Used by Medicare-participating hospitals: pretreatment
diagnosis billings based on DRGs; rate decided ahead of
time between insurance companies and hospitals
3. Exclusive
Provider
Used by HMO's: insurance coverage for contracted
providers or institutions
4. HMOs Health maintenance organizations: comprehensive
healthcare to people who pay a fee for a fixed period of
time
5. Capitation Fixed rate paid to provider per member per month for
healthcare services; set fee paid by insurance company
per month for all the patient needs
6. PPOs Preferred provider organizations: special reduced rate for
services when customers use certain providers approved
by the insurance company; usually fee-for-service
7. IPAs Individual provider arrangements: provide care in their
offices for prepaid plans; coalition of physicians who serve
HMO patients and third-party patients
8. Fulltime FTE
Hours
2080 hours (1.0 @ 40 hours per week)
9. Capital Expens-
es
Long-term equipment or physical purchases: usually over
$500-$1000 that will last years and depreciate over time
and be used multiple times
10. Zero-Based Bud-
get
With each new budget (i.e. fiscal year), it is determined
which programs/areas get money; no historical context is
used; may rank packages and then only fund top-ranked
ones; can be time-consuming way to create a budget
11.
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CNML Test
Variance Calcu-
lation & Re-
minders
Variance $ /Budgeted $ X 100 = % difference; contract
staff on separate line of budget; many staff sick costs
more than a few staff on LOA
12. Cost of Nursing
Services Calcu-
lation
Nurse Time X (Avg. RN Hourly Rate + Benefits + Indi-
rects) = Total Nursing Cost per DRG
13. General Nurse
Staffing Calcula-
tion
# of RNs needed X days open / # days worked per RN
14. FTE Definition &
Calculation
Full-time equivalent = full-time employee paid for 1 year
FTE = (Hours per shift X # of days worked) / 40 hours
15. Fixed Costs Stay the same no matter the census: manager salaries,
keeping phones on, rent, etc.
16. Variable Costs Change with census and how much staffing is used
17. Net Revenue Cal-
culation
Gross Revenue - Deductions from Revenue (DRGs and
the Contractual allowances paid by insurance compa-
nies)
18. UAP Unlicensed assistive personnel (CNA's)
19. ADC Average daily census (patients in a bed at midnight)
20. Total Patient
Days Calculation
ADC X Days open per year (for SCH - ADC X 365)
21. Nurse Hours
Per Patient Day
(HPPD) Calcula-
tion
Total Direct Care Hours / Total Patient Days = # of RN
hours needed to provide care for a pt. for 24 hours.
For example - for 12 hour staff and 12 workers each shift
you multiply 12 staff X 2 shifts = 24 staff X 12 hours each
= 288 divided by midnight census of 31 = NHPPD
22. VBP
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CNML Test
Value-based purchasing: how CMS determines how
much to reimburse a hospital for care (benchmarked stan-
dards and how they are meeting it); quality of care &
following best practice & patient experience
23. Per Diem Rate Negotiated pay for services by insurance companies re-
gardless of what services were actually completed; per
day admitted
24. UOS Unit of service: patient days for inpatient nursing but could
be visits or # of procedures or whatever that healthcare
organization counts
25. RVU Relative value unit: what ancillary services might use to
add up their UOS; # of hi-flows hooked up or vents started
for RT., for example
26. ALOS Calcula-
tion
Average length of stay = # of pt. days / # of discharges (in
same time period)
27. CPUOS Cost per unit of service = salaries / UOS
28. Productivity # of staff hours or $'s / # of UOS
RN hours / patients in beds @ midnight (HOC)
RN salaries / UOS
Output / input
Amount of work performed by a set # of staff
29. Minimum
Staffing
Minimum staff needed to operate unit usually determined
by law, hospital policy, and pt safety
30. Breakeven Needed in order not to lose money; minimum patients
needed to meet budget using minimum staffing; can't
control admissions but some would work with staffing
office to ensure minimum occupancy occurred
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CNML Test
31. Medicare Federal program that helps those over 65, those on
dialysis/ESRD, and combines with state run Medicaid,
younger people who are permanently disabled, and
physician residency training
32. EMTALA Emergency Medical Treatment and Active Labor Act:
must treat people in ED regardless of ability to pay, cit-
izenship, and legal status
33. Case Mix Index A system that classifies patients by age, diagnosis, treat-
ment, clinical, and financial categories to develop the
reimbursement rate
34. Productive Time 2080 hours - Benefit hours
35. Revenue Gross = $ charged
Net = $ collected
36. OE for Budgets Operating Expenses: salaries, supplies, rent, non-pro-
ductive time, etc.
37. Margin Difference between expenses and how much money is
collected
Margins down = less gross or net income
Margins up = more gross or net income
38. Workload Per
Day
Total workload hours / 365 days / 24 hours
39. Costs in a Bud-
get
Fixed, variable & non-recurring (like installing new piece
of equipment or 100th anniversary party for the hospital)
40. Replacement
Factor
Adding up the benefit time because nurses don't actually
work 2080 hours per year; add this to the total FTE's
41. HCAHPS Hospital Consumer Assessment of Healthcare Providers
and Systems: national survey asking patients how their
stay was
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CNML Test
42. National Labor
Relations Act
(NLRA)
(AKA: Wagner Act) Passed to end the depression; pre-
vented employers from cutting wages; lots of power
to unions/employees; 1974 amendments created union
needs to give notice before striking, no strikes during no-
tice time, written notice to employers about new contract
need, mediation needs, board of inquiry to settle disputes,
and allowed employees to bow out of joining; created
unfair labor practices against employers from stopping
unions or discriminating against union employees
Rights of unions/workers
43. Labor Manage-
ment Relations
Act
(AKA: Taft-Hartley Act) Listed union restrictions to even
out rights between employees and employers from the
NLRA/Wagner Act; placed restrictions on labor organiza-
tions like forcing employees to join or refusing to bargain;
created code of contact for unions
Rights of management
44. Civil Rights Act
of 1964
Prohibits discrimination against race, religion, sex, creed,
color, gender, national origin
45. Recognition
Phase of
Negotiations
Need 30% of nurses to sign individualized authorization
cards before labor union can rep them
46. Decertification Employees elect to stop using the union; also need 30%
of the vote before even going to the NLRB to start the
process
47. Hill-Burton Act Funding given to healthcare facilities so these facilities
must treat any patient through ED, participate in CMS,
post things in language of 10% of population, etc.
48. Fair Labor Act Federal law that establishes minimum wage, overtime pay
eligibility, and child labor standards
49. Shared Gover-
nance
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CNML Test Practice Exam with Answers (175 Solved Questions)

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