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$8,327,083. The report also shows average census figures for the
ILUs for 1997 and 1998. The schedule reflects that for 1997
there were 372 occupied ILUs containing 574 residents. For 1998,
there were 386 occupied ILUs containing 591 residents.
B. Mr. Dalton’s Calculations
On behalf of AFVW, Mr. Dalton calculated the deductible
portion of the monthly service fees paid in 1997 and 1998 for
AFVW residents living in ILUs. Mr. Dalton informed ILU residents
of his calculations and advised them to consult their tax adviser
for possible application on their tax returns. The general
approach utilized by Mr. Dalton was to use costs associated with
the SNF in determining the medical expense attributable to ILU
residents. Some of the figures used by Mr. Dalton to calculate
the allocation percentage are different from those outlined in
the Health Facility Information report.
1. Calculation of 1997 Medical Expenses
For 1997, Mr. Dalton used a percentage method to determine
the proper allocation of monthly service fees to medical care.
Mr. Dalton calculated the allocation percentage by determining
the total expenses associated with the SNF and subtracting from
this figure depreciation, interest expense, and Medicare and HMO
insurance reimbursements allocable to the SNF.7 He then divided
7Mr. Dalton did not allocate any medical costs for the
emergency-pull-cord system for 1997 or 1998.
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