- 53 -
However, Mr. Powell did subtract SNF ancillary services,
Medicare, and HMO billings for noncontract patients.
The ad hoc committee calculated medical expenses by first
calculating the sum of SNF, ALU, and SCU operating expenses,
expenses related to the emergency-pull-cord system, and certain
adjustments related to food service, environmental service,
utilities, and insurance. It then subtracted noncontract patient
fees for the SNF, ALU, and SCU, and depreciation and amortization
allocable to the SNF, ALU, and SCU.34 In addition to including
operating expenses of the SNF, ALU, and SCU, Mr. Powell included
interest expense allocable to the SNF and ALU. He did not
include an expense for the emergency-pull-cord system or
adjustments for food service, environmental service, utilities,
or insurance. Mr. Powell did not subtract either noncontract
patient fees for the ALU and SCU or depreciation and amortization
of the SNF, ALU, and SCU. However, he did subtract SNF ancillary
services, Medicare, and HMO billings for noncontract patients.
The ad hoc committee and Mr. Powell used slightly different
financial figures in their reports.
34In the Health Facility Information report, expenses
related to depreciation are included in the medical expenses
allocable to the SNF, ALU, and SCU. Allocations for amortization
of debt issue cost, amortization of preopening cost, and interest
expense are not included.
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