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The following chart prepared by Mr. Powell reflects his
calculations for 1998:
Operating Expenses Source for Amount
$17,759,058 Total operating expenses for AFVW,
including depreciation and interest
expense
(107,134) Issuance costs associated with debt
financing
(1,315,694) SNF room and board revenues for
noncontract patients
(378,905) SNF ancillary services, Medicare, and
HMO billings for noncontract patients
15,957,325 Total for denominator
Medical Expenses Source for Amount
$3,330,031 Operating expenses allocated to SNF
984,333 Operating expenses allocated to ALU
796,306 Operating expenses allocated to SCU
466,912 10 percent of interest expenses to SNF
311,275 6.67 percent of interest expenses to ALU
311,275 6.67 percent of interest expenses to SCU
(1,315,694) SNF room and board revenues for
noncontract patients
(378,905) SNF ancillary services, Medicare, and
HMO billings for noncontract patients
(0) Ancillary services, Medicare, and HMO
billings for residents; not included
4,505,533 Total for numerator
For 1998, the percentage is 28.2 percent ($4,505,533 �
$15,957,325).
To complete his procedure, Mr. Powell chose to apply the
percentages to the total monthly service fees that petitioners
paid to Village West. As previously mentioned, petitioners’
monthly service fees were $2,170 and $2,254 for 1997 and 1998,
respectively. Thus, Mr. Powell calculated that petitioners were
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