FACHE Exam Flashcards

Q: What are the 10 knowledge domains on the FACHE Board of Governors Exam?

Effective August 1, 2023: Healthcare (15%), Management and Leadership (13%), Finance (12%), Human Resources (12%), Laws and Regulations (9%), Quality and Performance Improvement (9%), Business (8%), Healthcare Technology and Information Management (8%), Professionalism and Ethics (8%), and Governance and Organizational Structure (6%). Together the top four domains make up over half the scored questions.

Q: What happens if I fail the FACHE Board of Governors Exam?

ACHE requires a flat 60-day waiting period before you can retake the exam, and this wait does not escalate even after multiple failures (unlike some other professional exams). You must pay a new $225 exam registration fee for each attempt, and you have a 2-year eligibility window from application approval to pass; if you don't pass within that window, you must reapply.

Q: Do I need employer sponsorship to sit for the FACHE exam?

No employer or firm sponsorship is required - candidates apply directly to ACHE. However, you must independently meet ACHE's eligibility bar: a master's degree or higher, at least 5 years of healthcare management experience, current ACHE membership, 36 continuing education credits (including 12 in-person), and documented community/civic and healthcare-related activities.

Q: How is the FACHE exam scored, and what is a passing score?

Of the 230 total questions, only 200 are scored (30 are unscored pretest items you cannot identify during the exam). ACHE uses a criterion-referenced passing standard, set by subject-matter experts, that works out to approximately 65% of scored items - not a fixed percentile curve against other test-takers.

Q: How often do I need to recertify my FACHE credential?

FACHE certification renews on a 3-year cycle. You can recertify either by completing the required continuing education credits or by retaking and passing the Board of Governors Exam again.

Question 1

What distinguishes an HMO from a PPO in care delivery?

Accepted Answer

HMOs require a primary care physician (PCP) gatekeeper and referrals to see specialists, using a narrow network to control costs. PPOs let members see specialists and out-of-network providers without a referral, trading lower cost-sharing for that flexibility.

Question 2

What is an Accountable Care Organization (ACO)?

Accepted Answer

A group of providers and hospitals that voluntarily coordinates care for a defined patient population and shares in the savings (and sometimes losses) generated by improving quality and lowering costs, as under the Medicare Shared Savings Program.

Question 3

How does a Patient-Centered Medical Home (PCMH) organize primary care?

Accepted Answer

It uses a team-based model centered on the primary care physician to coordinate comprehensive, continuous care, emphasizing prevention and care coordination over episodic, one-off visits.

Question 4

What separates an Integrated Delivery Network (IDN) from a Clinically Integrated Network (CIN)?

Accepted Answer

An IDN operates multiple care settings (hospitals, clinics, post-acute) under one common governance and ownership structure. A CIN links independently owned providers through shared clinical protocols and data without common ownership.

Question 5

Rank the levels of care from first contact through the most specialized.

Accepted Answer

Primary (first contact, prevention) leads to Secondary (community hospital, specialist) leads to Tertiary (subspecialty care, e.g., transplant) leads to Quaternary (highly specialized, experimental care), with subacute care and hospice sitting along the post-acute and end-of-life continuum.

Question 6

What is a Community Health Needs Assessment (CHNA)?

Accepted Answer

A periodic study, required by federal tax law for nonprofit hospitals, that identifies a community's priority health needs and produces an implementation strategy to address them, tied to maintaining tax-exempt status.

Question 7

What are social determinants of health (SDOH)?

Accepted Answer

Non-clinical conditions - housing, food security, transportation, income, and education - that influence health outcomes as much as or more than clinical care; executives increasingly screen for and address them to cut readmissions and disparities.

Question 8

How does population health management differ from traditional fee-for-service care?

Accepted Answer

Population health focuses on managing the outcomes and cost of a defined group over time using data analytics, risk stratification, and preventive outreach, rather than reacting only to individual episodes of illness.

Question 9

What is transformational leadership?

Accepted Answer

A style that inspires followers around a shared vision and drives significant organizational change through motivation and role-modeling, rather than through the reward-and-punishment exchanges of transactional leadership.

Question 10

What does situational leadership theory recommend for a manager choosing a leadership style?

Accepted Answer

Adapt your style - directing, coaching, supporting, or delegating - based on a specific follower's competence and commitment for the task at hand, rather than applying one fixed style to everyone.

Question 11

What are the key stages of Kotter's model for leading organizational change?

Accepted Answer

Create urgency, build a guiding coalition, form a strategic vision, enlist broad support, remove barriers to action, generate short-term wins, sustain momentum, and institute the change into the culture.

Question 12

How does Lewin's change model differ from Kotter's approach?

Accepted Answer

Lewin's 3-stage model (unfreeze, change, refreeze) is a simple conceptual framework for making a change stick, while Kotter's 8-step model provides a more detailed, sequential action plan for large-scale organizational change.

Question 13

Why is succession planning treated as a leadership responsibility, not just an HR task?

Accepted Answer

Executives must identify and develop internal talent for key roles to protect institutional knowledge and ensure continuity during leadership transitions, reducing reliance on costly, slower external searches.

Question 14

What should a hospital's emergency preparedness plan cover beyond natural disasters?

Accepted Answer

An all-hazards approach that also addresses infectious disease outbreaks, active shooter events, cyberattacks, and surge capacity, with defined incident command roles and regular drills.

Question 15

What is the purpose of a SWOT analysis in strategic planning?

Accepted Answer

It systematically evaluates internal Strengths and Weaknesses alongside external Opportunities and Threats to inform strategic decisions before an organization commits resources to a new initiative.

Question 16

What does the Days Cash on Hand ratio measure, and why does it matter to a CEO?

Accepted Answer

It measures how many days an organization could cover operating expenses using only its unrestricted cash and investments. A low figure signals liquidity risk that can affect bond ratings and vendor payment terms.

Question 17

How is Operating Margin calculated and what does it reveal?

Accepted Answer

Operating Margin equals operating income divided by operating revenue. It shows how much profit an organization generates from core patient care operations, excluding non-operating gains like investment income.

Question 18

What is the Debt Service Coverage Ratio used for?

Accepted Answer

It compares cash available for debt payments to the actual required principal and interest due, and lenders or bond covenants use it to judge whether an organization can meet its debt obligations.

Question 19

How does a Diagnosis-Related Group (DRG) payment work?

Accepted Answer

Medicare pays a fixed, predetermined amount per inpatient stay based on the patient's diagnosis and severity, regardless of the actual costs incurred, creating an incentive to manage length of stay and resource use efficiently.

Question 20

What is the key difference between capitation and fee-for-service reimbursement?

Accepted Answer

Capitation pays a fixed amount per patient per period regardless of services rendered, shifting utilization risk to the provider. Fee-for-service pays per unit of service, which rewards volume.

Question 21

What does the revenue cycle encompass, from start to finish?

Accepted Answer

Patient registration and scheduling, insurance verification, charge capture, coding, claims submission, and payment posting and collections. A breakdown at any step delays or reduces cash flow.

Question 22

What does the Family and Medical Leave Act (FMLA) guarantee?

Accepted Answer

Eligible employees at covered employers get up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons, with continued group health coverage during the leave.

Question 23

What must an employer do under the Americans with Disabilities Act (ADA)?

Accepted Answer

Provide reasonable accommodations to qualified employees with disabilities unless doing so would cause undue hardship to the organization, and avoid disability-based discrimination in employment decisions.

Question 24

What does the Fair Labor Standards Act (FLSA) regulate?

Accepted Answer

Minimum wage, overtime pay (time-and-a-half for non-exempt employees over 40 hours per week), recordkeeping, and child labor standards. Executives must classify staff correctly as exempt or non-exempt.

Question 25

What protection does the National Labor Relations Act (NLRA) provide?

Accepted Answer

It protects most private-sector employees' rights to organize, join unions, and engage in collective bargaining or other concerted activity for mutual aid, and it restricts certain employer interference with those rights.

Question 26

How is employee turnover rate calculated, and why do healthcare executives track it closely?

Accepted Answer

Turnover rate equals separations divided by average headcount over a period. High clinical turnover drives up recruiting and orientation costs and can directly harm quality and patient safety metrics.

Question 27

What is the purpose of a 360-degree performance review?

Accepted Answer

It gathers feedback on an employee, often a manager, from multiple perspectives - supervisors, peers, direct reports, and sometimes patients - producing a more complete picture than a single-rater review.

Question 28

What does EMTALA require of a hospital emergency department?

Accepted Answer

EMTALA requires any Medicare-participating hospital with an ED to provide a medical screening exam to anyone who arrives and to stabilize any emergency condition found, regardless of the patient's ability to pay or insurance status.

Question 29

Why is the Stark Law called a 'strict liability' law, unlike the Anti-Kickback Statute?

Accepted Answer

Stark Law prohibits physician self-referral for certain designated health services to entities in which the physician has a financial relationship, and a violation occurs regardless of intent. The Anti-Kickback Statute, by contrast, requires proof of intent to induce referrals.

Question 30

What does the False Claims Act penalize, and how are violations often uncovered?

Accepted Answer

It imposes civil liability for knowingly submitting false or fraudulent claims for payment to federal programs like Medicare. Violations are frequently reported by whistleblowers under qui tam provisions, which can earn them a share of recovered funds.

Question 31

What is 'deemed status' and which organization most commonly grants it?

Accepted Answer

Deemed status means a hospital accredited by a CMS-approved body - most often The Joint Commission - is presumed to meet Medicare Conditions of Participation, avoiding a separate state certification survey.

Question 32

What are the three components of the Donabedian quality model?

Accepted Answer

Structure (resources, staffing, facilities), Process (how care is actually delivered), and Outcome (the resulting patient result). Quality problems can originate at any of these three levels.

Question 33

What are the three goals of the IHI Triple Aim?

Accepted Answer

Improve population health, improve the patient experience of care, and reduce the per capita cost of care. Later frameworks add clinician well-being as a 'Quadruple Aim.'

Question 34

What is a 'never event' and how does it differ from a sentinel event?

Accepted Answer

A never event is a specific, serious, largely preventable error from a standardized list, such as wrong-site surgery. A sentinel event is any unexpected occurrence involving death or serious harm, whether or not it appears on the never-event list.

Question 35

What is the purpose of a root cause analysis (RCA) after a serious safety event?

Accepted Answer

An RCA works backward from an adverse event to identify the underlying system and process failures that allowed it to occur, so corrective action addresses root causes rather than just the immediate incident.

Question 36

What four elements make up the marketing mix ('4 Ps')?

Accepted Answer

Product, Price, Place, and Promotion. Healthcare strategic marketing plans define each element to position a service line or facility against competitors.

Question 37

What is an environmental scan used for in strategic planning?

Accepted Answer

It systematically reviews external market conditions - competitor activity, demographic shifts, regulatory changes, and payer trends - to inform an organization's strategic direction before finalizing a business plan.

Question 38

What core sections does a healthcare business plan typically justify?

Accepted Answer

Market demand and feasibility, competitive analysis, an operational plan, and financial projections covering revenue, expenses, and capital needs, used to justify a new service line or capital investment to the board.

Question 39

What should an executive prioritize when negotiating a physician or vendor contract?

Accepted Answer

Aligning contract terms with organizational strategy and risk tolerance, covering compensation or pricing, term length, and termination and renewal clauses, and, where physicians are involved, compliance with Stark Law and Anti-Kickback Statute safe harbors.

Question 40

What does interoperability mean for electronic health records (EHRs)?

Accepted Answer

The ability of different EHR and health IT systems to exchange, interpret, and use patient data across care settings and organizations, enabling coordinated care rather than isolated data silos.

Question 41

How does the HIPAA Security Rule differ from the HIPAA Privacy Rule?

Accepted Answer

The Security Rule applies only to electronic protected health information (ePHI) and requires administrative, physical, and technical safeguards. The Privacy Rule applies to PHI in any form and governs permitted uses and disclosures.

Question 42

What is the goal of an IT disaster recovery plan in a hospital?

Accepted Answer

To restore critical clinical and administrative systems, such as the EHR, order entry, and billing, after an outage or cyberattack within a defined recovery time objective, minimizing disruption to patient care.

Question 43

How has telehealth changed the continuum of care delivery?

Accepted Answer

It lets patients receive consultations, monitoring, and some treatment remotely via video or digital platforms, expanding access, especially in rural areas, while raising new questions about licensure, reimbursement, and data security.

Question 44

What are the four core principles of biomedical ethics applied in healthcare management?

Accepted Answer

Autonomy (patient self-determination), Beneficence (acting for the patient's benefit), Nonmaleficence (avoiding harm), and Justice (fair distribution of resources and treatment).

Question 45

What is the purpose of the ACHE Code of Ethics for a healthcare executive?

Accepted Answer

It sets the professional standard of conduct for ACHE members, covering responsibilities to patients, the organization, employees, and the community, and it underpins disciplinary action against members who violate it.

Question 46

How should an executive handle a personal financial interest in a vendor being considered for a contract?

Accepted Answer

Disclose the conflict of interest to the appropriate governance body, such as the board or compliance officer, and recuse themselves from the decision, rather than relying on their own judgment about whether it is material.

Question 47

Why does cultural competence matter to hospital ethics committees and executives?

Accepted Answer

Patient populations are increasingly diverse, and failing to account for cultural and linguistic differences in care decisions and communication can create both ethical breaches and quality or disparity problems.

Question 48

What is the governing board's fiduciary duty in a healthcare organization?

Accepted Answer

The board holds ultimate legal responsibility for the organization's mission, quality of care, and financial health, and must act in the organization's best interest above personal or competing interests - distinct from management's operational execution role.

Question 49

What do medical staff bylaws govern, as opposed to corporate bylaws?

Accepted Answer

Medical staff bylaws set the rules for physician credentialing, privileging, peer review, and medical staff self-governance within a hospital, while corporate bylaws govern the organization's overall governance structure and procedures.

Question 50

What is the purpose of hospital board committees, such as quality, finance, or audit committees?

Accepted Answer

They let the full board delegate focused oversight of a specific domain to a smaller group with relevant expertise, which then reports recommendations back to the full board for final decisions.

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