Delbert L. and Margaret J. Baker - Page 59

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          inappropriate, we accept the allocations to the pull-cord system            
          and the other adjustments made by the ad hoc committee.                     
                    4.   SNF Ancillary Services, Medicare, and HMO                    
                         Billings, and ALU and SCU Noncontract Patient Fees           
               In his calculations, Mr. Powell excluded from both total               
          costs and medical costs expenses for SNF ancillary services,                
          Medicare, and HMO billings for AFVW residents and noncontract               
          patients, and ALU and SCU noncontract patient fees.  However, Mr.           
          Powell stated that he could not obtain an accurate amount of SNF            
          ancillary services, Medicare, and HMO billings for AFVW                     
          residents, and therefore he did not exclude any amount in his               
          calculations.  Respondent has not specifically argued or provided           
          any amount that we should exclude for SNF ancillary service,                
          Medicare, and HMO billings for AFVW residents.  Accordingly, we             
          need only address the remaining items as they relate to whether             
          expenses related to noncontract patients should be excluded from            
          total costs and medical expenses.                                           
               Both the ad hoc committee and Mr. Powell subtracted                    
          noncontract patient fees related to the SNF from total costs and            
          medical costs.  The committee also subtracted noncontract patient           
          fees related to the ALU and SCU.  After reviewing Mr. Powell’s              
          reasoning and respondent’s arguments (discussed in further detail           
          below) with respect to expenses and reimbursements related to               
          noncontract patients, we infer that this was an oversight on the            
          part of Mr. Powell, and the committee’s position on this issue is           





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