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Free FACHE Practice Questions

10 free, exam-style Fellow of the American College of Healthcare Executives (FACHE) practice questions with answers and explanations. No signup required. Work through them below, then take the full free FACHE practice test to study every exam domain.

These 10 free FACHE questions are organized by exam domain, so you can see how each part of the Fellow of the American College of Healthcare Executives blueprint is tested. Reveal the answer and explanation under each question.

Domain 1: Healthcare 15% of exam

Question 1

A 200-bed community hospital acquires a multispecialty physician group practice, a home health agency, and an outpatient rehabilitation center to coordinate care across settings. This strategy is BEST described as:

  1. Vertical integration
  2. Horizontal integration
  3. Clinical affiliation
  4. Diversification
Show answer & explanation

Correct answer: A - Vertical integration

Domain 2: Management and Leadership 13% of exam

Question 2

A newly appointed CEO inherits a hospital with critically low employee morale following a failed merger attempt. Staff distrust senior leadership, physician engagement is minimal, and turnover has reached 28%. Which leadership approach is MOST appropriate for this situation?

  1. Laissez-faire leadership, giving departments autonomy to recover at their own pace without added pressure from above
  2. Autocratic leadership, making swift unilateral decisions to demonstrate decisive action and rapidly restore confidence
  3. Transactional leadership, establishing clear performance expectations with contingent rewards to stabilize day-to-day operations
  4. Transformational leadership, casting a compelling new vision while rebuilding trust through transparency and shared purpose
Show answer & explanation

Correct answer: D - Transformational leadership, casting a compelling new vision while rebuilding trust through transparency and shared purpose

Domain 3: Finance 12% of exam

Question 3

A non-profit hospital reports an operating margin of -1.8% but a total margin of +2.4%. The CFO attributes the positive total margin to strong investment returns and philanthropic contributions. When presenting this to the board, the CEO should emphasize that:

  1. The organization is financially healthy because total margin is positive and exceeds the industry median
  2. Core operations are losing money and cannot be sustained by non-operating revenue alone
  3. Investment returns should be reallocated to cover the operating deficit immediately
  4. The negative operating margin is typical for non-profit hospitals and does not require corrective action
Show answer & explanation

Correct answer: B - Core operations are losing money and cannot be sustained by non-operating revenue alone

Domain 4: Human Resources 12% of exam

Question 4

A nurse manager working 46 hours per week files a complaint claiming entitlement to overtime pay. Under the Fair Labor Standards Act, the determination of whether overtime is owed depends PRIMARILY on:

  1. The number of direct reports the manager supervises on each shift
  2. Whether the hospital has a written overtime policy that specifically covers management positions
  3. Whether the position is classified as exempt or non-exempt based on duties and salary
  4. Whether the employee agreed to a salaried compensation structure at the time of hiring
Show answer & explanation

Correct answer: C - Whether the position is classified as exempt or non-exempt based on duties and salary

Domain 5: Laws and Regulations 9% of exam

Question 5

A hospital's quality improvement team tests a new discharge communication protocol on one medical-surgical unit. After four weeks, data show a 12% reduction in 72-hour patient callback rates compared to baseline. According to the PDSA cycle, the team's NEXT step should be to:

  1. Implement the protocol hospital-wide immediately to maximize patient benefit across all units
  2. Publish the results to share findings with the broader healthcare community before further testing
  3. Analyze whether the reduction met predictions and determine if modifications are needed before expanding
  4. Disband the team and hand the protocol to nursing leadership for standardized rollout
Show answer & explanation

Correct answer: C - Analyze whether the reduction met predictions and determine if modifications are needed before expanding

Domain 6: Quality and Performance Improvement 9% of exam

Question 6

A health system CEO asks the strategy team to evaluate organizational performance across financial results, patient experience, internal operational efficiency, and workforce development simultaneously. Which framework is BEST suited for this analysis?

  1. PESTLE analysis
  2. Balanced Scorecard
  3. Porter's Five Forces
  4. SWOT analysis
Show answer & explanation

Correct answer: B - Balanced Scorecard

Domain 7: Business 8% of exam

Question 7

A hospital discovers that an unencrypted laptop containing the electronic protected health information of 3,200 patients was stolen from a physician's car. Under the HIPAA Breach Notification Rule, the organization is required to notify:

  1. The Department of Health and Human Services only, since the breach resulted from theft rather than employee negligence
  2. Law enforcement and the Department of Health and Human Services, with individual notification left to organizational discretion
  3. Only the affected individuals within 60 days of discovery, with no requirement to notify media outlets regardless of the total number of individuals affected
  4. The affected individuals, HHS within 60 days, and prominent media outlets because the breach exceeds 500 individuals
Show answer & explanation

Correct answer: D - The affected individuals, HHS within 60 days, and prominent media outlets because the breach exceeds 500 individuals

Domain 8: Healthcare Technology and Information Management 8% of exam

Question 8

A cardiologist who owns a 15% stake in a cardiac imaging center refers Medicare patients to that facility for stress echocardiograms. The cardiologist argues that the imaging center provides superior quality and faster turnaround. This arrangement MOST likely violates:

  1. The Anti-Kickback Statute, because the physician receives financial benefit from the referrals
  2. EMTALA, because patients may not receive an appropriate medical screening examination at the imaging center
  3. The False Claims Act, because the resulting Medicare claims are inherently fraudulent
  4. The Stark Law, because the physician has a financial relationship with an entity to which designated health services are referred
Show answer & explanation

Correct answer: D - The Stark Law, because the physician has a financial relationship with an entity to which designated health services are referred

Domain 9: Professionalism and Ethics 8% of exam

Question 9

A competent 78-year-old patient with terminal pancreatic cancer and a valid advance directive refusing mechanical ventilation develops acute respiratory failure. The patient's adult children demand that the care team intubate. The healthcare executive's role in supporting the clinical team is to ensure that:

  1. The ethics committee convenes to override the advance directive given the family's emotional distress
  2. The patient's advance directive is followed, as it represents the autonomous wishes of a competent adult
  3. The family's wishes are honored because next of kin have decision-making authority when a patient cannot speak
  4. A court order is obtained before any decision is made to protect the organization from legal liability
Show answer & explanation

Correct answer: B - The patient's advance directive is followed, as it represents the autonomous wishes of a competent adult

Domain 10: Governance and Organizational Structure 6% of exam

Question 10

During a board meeting, a trustee who is also CEO of a local construction firm advocates strongly for a $40 million campus expansion project. Several board members note that the trustee's firm would be a likely bidder. The board chair's MOST appropriate action is to:

  1. Require the trustee to disclose the conflict, recuse from all discussion and voting, and note it in the minutes
  2. Allow the trustee to participate fully in discussion but require abstention from the final vote on the project
  3. Table the project until the trustee's term on the board expires to avoid any appearance of impropriety
  4. Permit full participation since the trustee has not yet formally submitted a construction bid
Show answer & explanation

Correct answer: A - Require the trustee to disclose the conflict, recuse from all discussion and voting, and note it in the minutes

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