STATE OF FLORIDA NEC <9 0 DIVISION OF ADMINISTRATIVE HEARINGS SHOE THE COURT AT PALM AIRE, Petitioner, M Wi / chore A DOAH CASE NO. 02-2270MPI vs. Agency Provider No. 211761 AGENCY FOR HEALTHCARE RENDITION NO.: AHCA-02- ~S-MDA ADMINISTRATION, ae - Respondent. FINAL ORDER ae THE PARTIES resolved all disputed issues and executed a Settlement Agreement on November 24 , 2002, which is incorporated by reference. The parties are directed to comply with the terms of the attached settlement agreement. Based on the foregoing, this file is CLOSED. ~ DONE and ORDERED on this the LA day of \¢ [CY Dae , 2002, in Tallahassee, Florida. Rhonda M. Medows, MD, Sagretary Agency for Health Care Administration A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED _IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Garnett Chisenhall, Esquire Agency for Health Care Administration (Interoffice Mail) Eric M, Miller, Esquire Agency for Health Care Administration (Interoffice Mail) Christine Wiegal, Controller Holiday Retirement Corp. Post Office Box 14111 Salem, OR 97309-5026 (U.S. Mail) Michael Parrish Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-3060 Judy Hefren, Deputy Inspector General Lisa Milton, Medicaid Program Development CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to the above named addressees by U.S. Mail on this the Gp day ol later lu pao fCealand McCharen, Esquire Agency Clerk State of Florida Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308-5403 (850) 922-5873 SEP-19-2002 @5:24 AGENCY HEALTH CARE ADMIN 856 921 8158 P.@2 STATE OF FLORIDA An DIVISION OF ADMINISTRATIVE HEARINGS = 2 15 pu THE COURT AT PALM AIRE, Petitioner, DOAH CASE NO. 02-2270MPI AGENCY PROVIDER NO. 211761 vs. AGENCY FOR HEALTHCARE ADMINISTRATION, Respondent. SETTLEMENT AGREEMENT STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION (“AHCA” or “the Agency”), and Petitioner, Holiday Retirement Corporation d/b/a THE COURT AT PALM AIRE (“the Provider”), by and through the undersigned, stipulate and agree as follows: 1, This Agreement is entered into between the parties for the purpose of avoiding the costs and burdens of litigation. 2. The PROVIDER is.a,Medicaid-pravider.in.the State.of Florida.operating, a facility that was audited by the Agency. 3, In audit engagement number NH02-044M, AHCA audited the PROVIDER’S cost report for the audit period ending December 31, 2000. 4. In its Audit Report issued on March 26, 2002 pursuant to the foregoing audit engagement, AHCA notified the PROVIDER that a review of its cost report showed, in its opinion, some claims in whole or in part were not reimbursable by Received Time Sep.19. 12:58PM DEFOL-ee UDt 22 AGENCY HEALTH CARE ADMIN 856 921 4158 P.@3 Medicaid. The Agency further notified the PROVIDER of the adjustments AHCA was making to the cost report. In response to the Audit Report, the PROVIDER filed a timely petition for administrative hearing that was assigned DOAH case number 02-2270MPI. 5. In its petition for an administrative hearing, the PROVIDER identified specific adjustments being contested. 6. Subsequent to issuance of the Audit Report, AHCA and the PROVIDER exchanged documents and discussed the disputed adjustments. 7. As a result of the foregoing discussions, the parties agree the Agency’s Adjustments, which are the subject of this proceeding, are valid except for adjustment numbers 4, 5, 6, 11, 12, 13, and 14. Adjustment number 4, in the amount of $(316.00), will be removed from the audit report. Adjustment number 5, in the amount of $(1,256.00), will be removed from the audit report. Adjustment number 6, in the amount of $(1,495.00) will be removed from the audit report. Adjustment number 11, in the amount of 3(25,900.00), will be removed from the audit report. Adjustment number 12, in the amount of $(6,045.00), will be removed from the audit report. Adjustment number 13, in the amount of $(8,642.00), will be removed from the audit report. Adjustment number. 14, in. the amount.of.3(1,087.00),will he removed.from. the. audit repart. 8. In order to resolve this matter without further administrative proceedings, the PROVIDER and AHCA expressly agree the adjustment resolutions, as set forth above, completely resolve and settle this case and this agreement constitutes the PROVIDER’S withdrawal of its petition for administrative hearing, with prejudice. 9. The PROVIDER and AHCA further agree the Agency shall recalculate Received Time Sep.19. 12:58PM 2 SEP-LS-22 ubiee AGENCY HEALTH CARE ADMIN 858 921 9158 P.84 the per diem rate for this time period, and issue a notice of the recalculation. Where the PROVIDER was overpaid, the PROVIDER will remit payment to the Agency in the full amount of the overpayment within thirty (30) days of such notice. Where the PROVIDER was underpaid, AHCA will remit payment to the PROVIDER in the full amount of the underpayment within forty-five (45) days of such notice. 10. Payment shall be made to: AGENCY FOR HEALTH CARE ADMINISTRATION See TEAR AL TH CARE ADMINISTRATION Medicaid Accounts Receivable Post Office Box 13749 Tallahassee, FL 32317-3749 Notices to each Provider shall be made to: (Name of Provider) Christine Wiegal Controller Holiday Retirement Corporation 2250 McGilchrist St. S.E., Suite 200 Salem, Oregon 97302 Payment shall clearly indicate it is pursuant to a settlement agreement, shall reference the Case Number, and shall reference the audit/engagement number, 11, The PROVIDER agrees that failure to pay any monies due and owing under the terms.af this Agreement shall. canstitute.the PRQVIDER’ S.autharization for the. Agency, without further notice, to withhold the total remaining amount due under the terms of this agreement from any monies due and owing to the PROVIDER for any Medicaid claims. 12, AHCA is entitled to enforce this Agreement under the laws of the State of Florida, the Rules of the Medicaid Program, and all other applicable law. 13. This settlement does not constitute an admission of wrongdoing or error Received Time Sep.19. 12:58PM 3 DERO1S-eied UDF ee HGENCY HEHLIH CARE ADMIN B54 Yel B158 P.@5 by the parties with respect to this case or any other matter. However, the parties believe this matter should be settled because they have agreed to the foregoing terms. 14, Each party shal] bear their respective attorneys’ fees and costs, if any. 15. The signatories to this Agreement, acting in their respective representative capacities, are duly authorized to enter into this Agreement on behalf of the party tepresented. The parties further agree a facsimile or photocopy reproduction of this Agreement shall be sufficient for the parties to enforce the Agreement. The PROVIDER agrees, however, to forward a copy of this Agreement to AHCA with ori ginal signatures, and understand a Final Order may not be issued until said original Agreement is received by AHCA. 16. This Agreement shall be construed in accordance with the provisions of the laws of Florida. Venue for any action arising from this Agreement shal] be in Leon County, 17. This Agreement constitutes the entire agreement between the PROVIDER and AHCA, including anyone acting for, associated with, or employed by them, respectively, concerning all matters and supersedes any prior discussions, agreements, or. understandings;. there. are, no. pramises, representations, or. agreements. between the PROVIDER and AHCA other than as set forth herein. No modification or waiver of any provision shall be valid unless a written amendment to the Agreement is completed and properly executed by the parties. 18. This is an Agreement of settlement and compromise, recognizing the patties may have different or incorrect understandings, information and contentions, as to facts and law, and with each party compromising and settling any potential correctness or Received Time Sep.19. 12:58PM 4 SEW-LO-ede = UDdiee HaeENLY HEHLIAH CHRE HUN Go 321 Wisd incorrectness of its understandings, information, and contentions as to facts and law, so that no misunderstanding or misinformation shall be a ground for rescission hereof. 19. The PROVIDER expressly waives in these matters its right to any hearing pursuant to §§120.569 or 120.57, Florida Statutes, the making of findings of fact and conclusions of law by the Agency, and all further and other proceedings to which it may be entitled by law or mies of the Agency regarding these proceedings and any and all issues raised herein, other than enforcement of this Agreement. The PROVIDER further agrees the Agency shall issue a Final Order which is consistent with the terms of this settlement, that adopts this Agreement and closes this matter. 20. This Agreement is and shall be deemed jointly drafted and written by all parties to it and shall not be construed or interpreted against the party originating or preparing it. 21. To the extent any provision of this Agreement is prohibited by law for any reason, such provision shall be effective to the extent not so prohibited, and such prohibition shall not affect any other provision of this Agreement. 25. This Agreement shall inure to the benefit of and be binding on each patty.’ s successors,.assigns, heirs, administrators, representatives,.and. trustees. . Holiday Retirement Corporation d/ba/ THE COURT AT PALM AIRE Petitioner/Provider on lihecgat Dated: lorfox (signature) By its: Cnutinlien! (title) Received Time Sep.19. 12:58PM > PrP. SEFTLo“d0de UD HUENLY HEHLIH CHRE AUMIN oS) 921 4158 P.Q? AGENCY FOR HEALTH CARE ADMINISTRATION 2727 Mahan Drive, Mail Stop #3 Tallahassee, FL 32308-5403 Dated: / foy/ 0 =< Bob Sharpe, Deputy Secretary, Medicaid vor Diy £ Latta (ley) Pai Dated: 7 ae Valda Clark Christian, General Counsel C Jil ba Le. Dated: VAS pe Eric H. Miller, Assistant General Counsel Received Time Sep.19. 12:58PM TOTAL P.a? | STATEOF FLORIDA t ~|AHCA AGENCY FOR HEALTH CARE ADMINISTRATION JE@ BUSH, GOVERNOR RHONDA M, MEDOWS, MO, FAAFP, SECRETARY March 26, 2002 Return Receipt No. 7000 1530 0000 5396 9547 COURT AT PALM AIRE, THE 2701 NORTH COURSE DRIVE POMPANO BEACH, FL 33069 Provider No.:. 211761 Audit Period/Engagement No.: December 31, 2000/NHO2-044M Dear Administrator: Lity’s Medicaid cost We have completed the audit of your faci A copy of the audit report for the period specified above. report is attached for your information. m the application of Medicaid as reported on the Medicaid cost you have the right to request Audit adjustments result fro reimbursement principles to costs xeport for the period specified. a formal or informal hearing pursuant to: Section 120.57, Florida Statutes. If a petition for a formal hearing is made, the petition must be made in compliance with Section 28-106.201, Florida Administrative Code. Please note that Section 28-106.201(2) specifies that the petition shall contain a concise discussion of specific items in dispute. additionally, you are hereby informed that if a request for a hearing is made, the request or petition must be received within twenty-one (21) days of yours. receipt of this letter, and that failure to timely request a hearing shall be deemed a waiver of your right to a hearing. a/or questions to Please address all petitions for a nearing an FL. 32308. 2727 Mahan Drive, Mail Stop 21, Tallahassee, Sincerely, . Cjiox DI un. Lisa D. Milton Administrator of Audit Services Medicaid Program Analysis (850) 487-1240 Attachment(s) : Vistt AHCA Online at 2727 Mahan Drive » Mail Stop #21 wow fdhe. state. fl.us Tallahassee, FL 32308 The Court at Palm-Aire Medicaid Audit Report For the Year Ended December 31, 2000 TABLE OF CONTENTS independent Auditors’ Report Schedules: Schedule of Costs Schedule of Charges Schedule of Statistics and Equity Capital Schedule of Allowable Medicaid Costs Schedule of Fair Rental Value System Data Notes to Schedules Attachment A: Schedule of Adjustments Suite 2700, Independent Square One Independent Drive _ PO, Box 190 Jacksonvilie, FL 32201-0190 INDEPENDENT ACCOUNTANTS’ REPORT Secretary Agency for Health Care Administration: We have examined the accompanying schedules and statistical data, as listed in the Table of Contents, which were derived from the Cost Report for Florida Medicaid Program Nursing Home Service Providers (Cost Report) of The Court at Palm-Aire (Provider) for the year ended December 31, 2000. These schedules and statistical data are the responsibility of the Provider’s management. Our responsibility is to express an opinion on the schedules and statistical data based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining on a test basis, evidence supporting the accompanying schedules and statistical data and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Attachment A to this report includes a schedule of adjustments which, in our opinion, requires inclusion of such data in order for the schedules and statistical data, as reported, for the year ended December 31, 2000, to be presented based on federal and state Medicaid reimbursement principles as set forth in the Provider Reimbursement Manual (HCFA-Pub. 15-1); Florida Title XIX Long Term Care Reimbursement Plan; and the State of Florida’s Audit Services Medicaid Procedures Manual. To quantify the effect of the required adjustments, we have applied the. adjustments described in Attachment A to the accompanying schedules and statistical data, as reported. In our opinion, except for the effects of not including adjustments as discussed in the preceding paragraph, the accompanying schedules and statistical data as listed in the Table of Contents presents, in all material respects, the amounts and statistical data for the year ended December 31, 2000, based on federal and state Medicaid reimbursement principles as set forth in the Provider Reimbursement Manual (HCFA-Pub. 15-1); Florida Title XIX Long Term Care Reimbursement Plan; and the State of Florida’s Audit Services Medicaid Procedures Manual. ; This report is intended solely for the information and use of the State of Florida, Agency for Health Care Administration and management of The Court at Palm-Aire and is not intended to be and should not be used by anyone other than these specified parties. KPH LUP November 28, 2001 | | | a KPMG LLP KPMG LLP a US. ienuted liabuity partnershig, +s a member of KPMG Intermanonal, a Swiss association, # ost Center Totals The Court at Palm-Aire Schedule of Costs For the Year Ended December 31, 2000 pests to be allocated: As Reported Piant operations $ 126,586 Housekeeping 67,949 194,535 Administration 763,314 Owner's administrative compensation 0 957,849 Allowable ancillary cost centers: Physical therapy 188,586 Speech therapy 29,965 Occupational therapy 127,854 Audiological therapy 0 Medical supplies 8,405 Other 32,325 387,135 Patient care costs: Nursing 1,286,214 Dietary 404,523 Oxygen 0 Other 208,526 1,899,263 Laundry and linen costs 49,673 Property costs: Depreciation 71,051 Interest on property 80,034 Rent on property 0 Insurance on property 6,113 Taxes on property 80,098 Home office property 0 237,296 Nonallowable ancillary cost centers: Radiology §,606 Lab 4,804 Pharmacy 11,341 Other 0 21,751 Other nonreimbursable cost. centers: Beauty and barber 0 Gift shop 0 Clinic 0 Other 0 0 Total operating costs 3,552,967 0 Medicaid bad debts Total costs 3S _3562,967_ Increase (Decrease) As Adjusted 5 (5,928) $ 120,658 (1,256) 66,693 (7,184) 187,351 (120,341) 642,973 0 0 (127,525) 830,324 0 188,586 0 29,965 0 127,854 0 0 0 8,405 ie] 32,325 0 387,135 (25,900) 1,260,314 (6,045) 398,478 0 0 (8,642) = __ 199,884 ~~ ___ (40,587) 1,858,676 (1,087) 48,586 0 71,051 0 80,034 0 0 (1,089) 5,024 0 80,098 0 ; 0 (1,089) 236,207 0 5,606 0 4,804 0 11,344 0 0 0 21,751 1,987 1,987 0 0 0 0 0 0 1,987 1,987 (168,301) 3,384,666 0 0 $ (168,301) $ 3,384,666 NHO02-044M 21176-1 The accompanying notes are an integral part of this schedule. 2 The Court at Paim-Aire os Schedule of Charges foe For the Year Ended December 31, 2000 Increase r As Reported (Decrease) As Adjusted * ysual and customary daily rate $ 139.22 $ 0.00 $ 139.22 Patient Charges: Medicaid: Ancillary cost centers: Physical therapy $ f°) $ 0 $ 0 Speech therapy 0 0 0 Occupational therapy 0 0 0 Audiological therapy 0 0 0 Medical supplies 5,691 0 5,691 Other 0 0 0 Room and board 743,565 e} 743,565 Other 0 0 0 Totals 749,256 0 749,256 Medicare: Ancillary cost centers: Physica! therapy 357,402 0 357,402 Speech therapy 54,025 0 64,025 Occupational therapy 230,109 0 230,109 Audiological therapy 360 0 360 Medical supplies 24,704 0 24,704 Other 0 34,197 34,197 _ Room and board 662,422 0 662,422 Other 0 0 7 0 Totals 41,329,022 34,197 1,363,219 Private and other: Ancillary cost centers: Physical therapy 5,680 0 5,680 Speech therapy 0 0 0 Occupational therapy . 840 0 840 Audiological therapy 330 0 330 *Medical supplies 10,779 0 _ 10,779 Other 0 0 0 Room and board 1,414,846 0 1,414,846 Other . 0 _ Oe Totals 1,432,475 0 1,432,475 Total charges $ 3,510,753 $ 34,197 $ 3,544,950 NHO02-044M 21176-1 The accompanying notes are an integral part of this schedule. 3 The Court at Palm-Aire edule of Statistics and Equity Capital For the Year Ended December 31, 2000 The accompanying notes are an integral 4 part of this schedule. Increase ; As Reported (Decrease) _ As Adjusted statistics: . Number of beds 60 0 60 Patient Days: Medicaid ~ 5,088 0 5,088 Medicare 4,576 0 4,576 Private and other 10,289 0 10,289 Total patient days 19,953 0 19,953 Percent Medicaid 25.50% 0.00% 25.50% Facility square footage: Allowable ancillary cost centers: Physical therapy 651 (165) 486 Speech therapy 199 17 216 Occupational therapy 460 37 497 Audiological therapy 0 0 0 Medical supplies 310 51 361 Other 58 2 60 Patient care 30,186 (3,358) 26,828 Laundry and linen 941 79 4,020 Radiology 0 0 0° Lab 0 0 0 Pharmacy 0 91 94 Other nonaflowable ancillary 0 0 0 Beauty and barber 0 289 289 Gift shop 0 0 0 Clinic 0 0 0 Other nonreimbursable 0 0 0 Total facility square footage 32,805 (2,957) 29,848 Equity Capital Ending equity capital S$ 716,348 $ 0 $ 716,348 Average equity capital $ 1,636,645 $ 0 3 1,536,645 Annual rate of return 6.0600% 0.1800% 6.2400% Return on equity before apportionment $ 93,121 $ 2,766 $ 95,887 Type of ownership: Partnership Date cost report accepted: April §, 2001 NHO02-044M 21176-1 4 " Total Costs: Reimbursement Class Operating Patient care Property Nonreimbursabie Totals (Page 2) Return on equity (Page 4) Non-Medicaid Totals Allowable Medicaid Costs: Reimbursement Class Operating Patient care Property Return on equity . Totals Allowable Medicaid Per Diem Costs: Reimbursement Class Operating Patient care Property Return on equity Initial Medicaid per diem (Note 3) The Court at Palm-Aire Schedule of Allowable Medicaid Costs For the Year Ended December 31, 2000 The accompanying notes are an integral part of this schedule. 5 LL ee aa a er epmtee = Allocations and Costs After Costs as Apportionment Allocations and Adjusted (Note 2) Apportionment $ 878,910 $ (685,007) $ 193,903 2,245,811 (1,770,689) 475,122 236,207 (175,974) 60,233 23,738 2,631,670 2,655,408 3,384,666 0 3,384,666 95,887 (75,227) 20,660 0 75,227 75,227 $ 3,480,553 $ 0 $ 3,480,553 Increase As Reported (Decrease) As Adjusted $ 223,124 $ (29,221) $ 193,903 485,489 (10,367) 475,122 60,496 (263) 60,233 20,158 502 20,660 $ 789,267 $ (39,349) $ 749,918 Increase As Reported (Decrease) As Adjusted $ 43.85 $ (5.74) $ 38.11 95.42 (2.04) 93.38 11.89 (0.05) 11.84 : 3.96 0.10 4.06 $.. 165.12 $ (7.73) $ 147.39 NHO2-044M 21176-1 The Court at Palm-Aire a ‘edule of Fair Rental Value System Data ( For the Year Ended December 31, 2000 ro Increase * Gapital Additions and Improvements: As Reported (Decrease) As Adjusted Acquisition costs: 01/01/00 To 06/30/00 . $ 0 $ 0 $ 0 07/01/00 To 12/31/00 0 0 Totals - $ 0 $ 0 $ 0 Original loan amount $ 0 $ 0 $ 0 Retirements $ 0 $ (9) $ 0 Capital Replacements: Acquisition costs $ 16,616 $ (852) $ 16,064 Original loan amount $ 0 $ (a) 0 Pass-through costs (Note 4) The accompanying notes are an integral part of this schedule. 6 Se SSS A SPUR Acquisitions: 01/01/00 To 12/31/00 Depreciation $ 2,479 $ (16) $ 2,463 Interest 0 0 0 Prior to 01/01/00 21,626 (245) 21,381 Total $ 24,105 $ (261) $ 23,844 Equity in Capital Assets: Ending equity in capital assets $ (576,773) $ 0 $ (576,773) Average equity in capital assets $ 0 $ 0 a ee 0 Annual rate of return 6.0600% 0.1800% 6.2400% Return on equity in capital assets before apportionment $ 0 $ 0 $ 0 Return on equity in capital assets apportioned to Medicaid $ 0 $ 0 $ 0 Mortgage interest Rates: - 4/15/2000 7.56% Fixed 10/15/2000 7.56% Fixed NHO2-044M 21176-1 The Court at Palm-Aire a Notes to Schedules For the Year Ended December 31, 2000 Note 1 - Basis of Presentation The schedules, which were derived from the Cost Report for Florida Medicaid Program Nursing Home Service Providers (cost report) for the current period, have been prepared in conformity with federal and state Medicaid reimbursement principles as specified in the State of Florida Medicaid Program as defined by applicable cost and reimbursement principles, policies, and regulations per Medicaid principles of reimbursement as interpreted by the Provider Reimbursement Manual (HCFA-Pub. 15-1), Florida Title XIX Long-term Care Reimbursement Plan, and the State of Florida's Audit Services Medicaid Procedures Manual. The format and content of the information included in the schedules have been developed by the State of Florida's Audit Services. The balances in the "As Reported" columns of the schedules are the assertions and responsibility of the management of the nursing home. The balances in the "As Adjusted” columns are the result of applying the adjustments reflected in the "Increase (Decrease)" columns to the balances in the "As Reported" columns. Note 2 - Allocations and Apportionment Schedules G, G-1 and H of the cost report allocate allowable administration, plant operation and housekeeping costs to allowable and nonallowable ancillary, patient care, laundry and linen and nonreimbursable cost centers based on predetermined statistical bases, such as square footage or total costs, as explained in the cost report. These schedules then apportion allowable costs after allocations to the Medicaid program based on other statistical bases, such as patient days or ancillary charges, as explained in the cost report. The net effect of such allocations and apportionments on each reimbursement class is presented in the Schedule of Allowable Medicaid Costs. Note 3 - Initial Medicaid Per Diem Allowable Medicaid per diem costs for property and return on equity have been calculated under the provisions of the applicable revision of the Florida Title XIX Long-term Care Reimbursement Plan, except that fair rental value provisions are not applied. The effect, if any, of the fair rental value system, will be determined during the rate setting process, in where applicable, prospective rates will be calculated by applying inflation factors, incentives, low utilization penalties and reimbursement ceilings. Note 4 - Capital Replacement Pass-through Costs Capital replacement pass-through costs in the form of depreciation and interest are presented without regard to the number of years remaining, if any, to full fair rental value system phase-in. Accordingly, pass-through reimbursement will be calculated based on amounts equal to or less than fifty percent of the costs presented herein as capital replacement pass-through costs. Once full fair rental value system phase-in has occurred no capital replacement costs are allowed to be passed-through. NH02-044M 21176-1 The Court at Palm-Aire Schedule of Adjustments For the Year Ended December 31, 2000 authoritative citations. All other adjustments presented herein are in accordance with Chapter 2300, primarily Section 2304, Adequacy of Cost Information, HIM 15. Account Classification Number Comment Adjustments affecting costs (Page 2) Plant operations: 4. Swimming 7607 To disallow expenses not related to patient care. (Section pools 2102.3, HIM 15) To disallow expenses not related to patient care. (Section 2. Swimming 7668 pools 2102.3, HIM 15) 3. Cable/satellite 7820 To disallow expenses not related to patient care. (Section Tv 2102.3, HIM 15) 4, Salaries - 7506 To disallow expenses due to lack of supporting maintenance documentation. (Section 2304, HIM 15) Housekeeping: ; 5. Salaries - 6906 To disallow expenses due to lack of supporting housekeeping documentation. (Section 2304, HIM 15) Administration: 6. Salaries - 8370 To disallow expenses due to lack of supporting management documentation. (Section 2304, HIM 15) Attachment A The following adjustments, which are included in the Schedule of Costs and those affecting ending equity capital in the Schedule of Statistics and Equity Capital, are supported by explanations and Increase (Decrease) $ (625) (115) (4,872) (316) (5,928) (4,258) (1,256) (1,495) NHO02-044M 21176-1 The Court at Palm-Aire eo Schedule of Adjustments . Attachme: For the Year Ended December 31, 2000 asgenment A Account Increase Classification Number Comment (Decrease) Administration (continued): 7. Activities - 6705 To disallow expenses due to lack of supporting : (34,512) residential documentation. (Section 2304, HIM 15) 8. Special events 6728 To disallow expenses due to lack of supporting (549) documentation. (Section 2304, HIM 15) 9. Vendor interest 9385 To disallow amounts not related to patient care. (Sections (3,043) 2304 and 2320, HIM 15) 10. Management 8425 To adjust costs to audited amount. (Sections 2304 and 2320, (80,742) fees HIM 15) (120,341) Patient care: 11, Salaries - 6006 To disallow expenses due to lack of supporting ; (25,900) director documentation. (Section 2304, HIM 15) 12. Salaries - 6811 To disallow expenses due to lack of supporting (6,045) facility documentation. (Section 2304, HIM 15) 13. Salaries - 8391 To disallow expenses due to lack of supporting (8,642) special help documentation. (Section 2304, HIM 15) : (40,587) NH02-044M 9 . 21176-1 aa aaa a ee The Court at Palm-Aire : Schedule of Adjustments ; Attachment a ror the Year Ended December 31, 2000 , Account Increase Classification Number Comment (Decrease) i Laundry and linen: : 14, Salaries - 7006 To disallow expenses due to lack of supporting . (1,087) laundry documentation. (Section 2304, HIM 15) - : — ! (1,087) Property: | 15. Fire/liability 7840 To disallow expenses due to lack of supporting (564) i insurance documentation. (Section 2304, HIM 15) : | i) 16. Vehicle 8420 To disallow expenses due to lack of supporting (525) insurance documentation. (Section 2304, HIM 15) (1,089) Other nonreimbursable: : 17. Beauty and To reinstate beauty and barber as a non-reimbursable cost 1,987 Barber center. (Section 2102.3, HIM 15) 1,987 Total adjustments affecting costs $ (168,301) Adjustments affecting ending equity capital (Page 4) No adjustments. NHO02-044M 10 21176-1 EEE ed The Court at Palm-Aire Schedule of Adjustments a Attachment A For the Year Ended December 31, 2000 a Account Increase Number Comment -__ (Decrease) Average equity capital $ - ‘Adjustments affecting statistics (Page 4) Facility square footage: Physical therapy To adjust to actual. (Sections 2102.3 and 2304, HIM 15) (165) Speech therapy To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 17 Occupational therapy To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 37 { Audiological therapy To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 0 | Medical supplies To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 51 i Other ancillary To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 2 Patient care To adjust to actual, (Sections 2102.3 and 2304, HIM 15) (3,358) Laundry and linen To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 79 Radiology To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 0 Lab To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 0 Pharmacy To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 91 Other nonallowable ancillary To adjust to actual. (Sections 2102.3 and 2304, HIM 15) - 0 Beauty and barber To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 289 Gift shop To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 0 Clinic To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 0 Other nonreimbursable To adjust to actual. (Sections 2102.3 and 2304, HIM 15) 0 Net adjustments to facility square footage ; ~____ (2,957). NH02-044M nl 21176-1 rr a renee The Court at Paim-Aire x. Schedule of Adjustments : Attachment A For the Year Ended December 31, 2000 ee) . Tne following adjustments reported in the Schedule of Fair Rental Value Data are in accordance with the fair rental value system provisions of the Florida Title XIX Long-term Care Reimbursement Plan and, where appropriate, the applicable sections of Chapters 100, Depreciation, and 2300, Adequate Cost Data and Cost Findings of the Provider Reimbursement Manual (HIM 15). The Provider has been furnished with schedules developed during the course of the audit which detail allowable components of the fair rental value system. Increase Classification (Decrease) Fair Rental Value System Data: Capital Additions 1. Acquisition costs $ 0 a Capital Replacements 2. Acquisition costs $ 552 3. Pass-through costs $ 261 ae NO Equity in Capital Assets 4. Ending equity $ 0 5. Average equity $ 0 | | 1 i NHO02-044M 12 21176-1 i EEE _OOEOeeOO

Docket for Case No: 02-002270MPI