State of California Department of Health Care Services Provider Name Fiscal Period Provider Number WINDSOR GARDENS CARE CENTER OF FULLERTON 23 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted MEMORANDUM ADJUSTMENT 1 To reconcile provider's reported statistics on page 10.7 to provider's reported statistics on page 11.1. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 Page 1 Adjustments JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05689G Cost Report Explanation of Audit Adjustments Report References Audit Report This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number WINDSOR GARDENS CARE CENTER OF FULLERTON 23 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05689G Cost Report Explanation of Audit Adjustments Report References Audit Report RECLASSIFICATIONS OF REPORTED COSTS 2 10.5 035 4 8A-2 035 4 Leases and Rentals $856,708 ($29,206) $827,502 * 10.5 105 1 8A-2 105 1 Skilled Nursing Care - Salaries and Wages 2,181,093 (29,445) 2,151,648 10.5 105 2 8A-2 105 2 Skilled Nursing Care - Fringe Benefits 618,369 (8,001) 610,368 10.5 105 4 8A-2 105 4 Skilled Nursing Care - Other - Nonlabor 248,500 (2,225) 246,275 * 10.5 155 4 8A-2 155 4 Social Services - Other - Nonlabor 4,900 (1,960) 2,940 10.5 160 2 8A-2 160 2 Activities - Fringe Benefits 26,622 (828) 25,794 10.5 166 2 8A-2 166 2 Medical Records - Fringe Benefits 18,599 (1,880) 16,719 10.5 166 4 8A-2 166 4 Medical Records - Other - Nonlabor 94,036 (85,096) 8,940 10.5 170 2 8A-2 170 2 Inservice Education - Nursing - Fringe Benefits 16,707 (941) 15,766 10.5 170 4 8A-2 170 4 Inservice Education - Nursing - Other - Nonlabor 6,714 (6,714) 0 10.5 030 4 8A-2 030 4 Depreciation and Amortization - Other 0 4,171 4,171 10.5 055 4 8A-2 055 4 Interest - Other 0 29,896 29,896 * 10.5 075 4 8A-2 075 4 Patient Supplies - Other - Nonlabor 46,142 36,553 82,695 10.5 140 4 8A-2 140 4 Beauty and Barber - Other - Nonlabor 0 2,964 2,964 10.5 155 2 8A-2 155 2 Social Services - Fringe Benefits 14,172 828 15,000 10.5 160 4 8A-2 160 4 Activities - Other - Nonlabor 9,204 1,959 11,163 10.5 165 1 8A-2 165 1 Administration - Salaries and Wages 475,377 29,444 504,821 * 10.5 165 2 8A-2 165 2 Administration - Fringe Benefits 142,009 3,610 145,619 * 10.5 165 4 8A-2 165 4 Administration - Other - Nonlabor 720,945 56,871 777,816 * To reclassify reported expenses to the appropriate cost centers. 42 CFR 413.20 and 413.24 CMS Pub. 15-1, Sections 2300, 2302.4 and 2302.8 3 10.5 165 4 8A-2 165 4 Administration - Other - Nonlabor * $777,816 $6,671 $784,487 * 10.5 167 4 8A-2 167 4 DPH Licensing Fees 35,084 (6,671) 28,413 To reclassify miscellaneous licensing fees to the appropriate cost center. 42 CFR 413.20 and 413.24 CMS Pub. 15-1, Sections 2300, 2302.4 and 2302.8 4 10.5 100 4 8A-2 100 4 Other Ancillary Services - Other - Nonlabor $87,433 $1,751 $89,184 10.5 105 4 8A-2 105 4 Skilled Nursing Care - Other - Nonlabor * 246,275 (1,751) 244,524 * To reclassify offsite physician services cost to the appropriate cost center. 42 CFR 413.20 and 413.24 / CCR, Title 22, Section 51511(c) CMS Pub. 15-1, Sections 2300, 2302.4 and 2302.8 *Balance carried forward from prior/to subsequent adjustments Page 2 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number WINDSOR GARDENS CARE CENTER OF FULLERTON 23 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05689G Cost Report Explanation of Audit Adjustments Report References Audit Report RECLASSIFICATIONS OF REPORTED COSTS 5 10.5 105 4 8A-2 105 4 Skilled Nursing Care - Other - Nonlabor * $244,524 ($3,000) $241,524 * 10.5 165 4 8A-2 165 4 Administration - Other - Nonlabor * 784,487 3,000 787,487 * To reclassify medical director fees to the appropriate cost center. 42 CFR 413.20 and 413.24 CMS Pub. 15-1, Sections 2300, 2302.4 and 2302.8 CCR, Title 22, Sections 52000 and 72305 6 10.5 105 4 8A-2 105 4 Skilled Nursing Care - Other - Nonlabor * $241,524 ($12,600) $228,924 * 10.5 165 4 8A-2 165 4 Administration - Other - Nonlabor * 787,487 12,600 800,087 * To reclassify medical director fees to the appropriate cost center. 42 CFR 413.20 and 413.24 CMS Pub. 15-1, Sections 2300, 2302.4 and 2302.8 CCR, Title 22, Sections 52000 and 72305 *Balance carried forward from prior/to subsequent adjustments Page 3 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number WINDSOR GARDENS CARE CENTER OF FULLERTON 23 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05689G Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENTS TO REPORTED COSTS 10.5 165 4 8A-2 165 4 Administration - Other - Nonlabor * $800,087 7 To eliminate marketing expense not related to patient care. ($539) 42 CFR 413.9(c)(3) CMS Pub. 15-1, Sections 2102.3, 2105.7, 2136.2 and 2139.1 8 To eliminate contribution expense not related to patient care. (345) 42 CFR 413.9(c)(3) CMS Pub. 15-1, Sections 2102.3, 2105.7 and 2139.1 9 To eliminate bad debt expense that is not recognized under the (90,436) Medi-Cal program. 42 CFR 413.89 and 413.178 / CMS Pub. 15-1, Section 300 10 To eliminate Franchise Tax Board expense not related to patient care. (25,180) 42 CFR 413.9(c)(3) CMS Pub. 15-1, Section 2102.3, 2122.2 and 2122.4 11 To abate other revenue against related costs. (76,441) 42 CFR 413.5 and 413.9 / CMS Pub. 15-1, Section 2328 12 To abate other income against related costs. (511) 42 CFR 413.5 and 413.9 / CMS Pub. 15-1, Section 2328 13 To eliminate political contribution/lobby fees not related to patient care. (2,906) 42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2139 14 To adjust reported home office costs to agree with the SnF Management (71,465) Company, Inc. home office audit report for the fiscal period ended ($267,823) $532,264 December 31, 2009. 42 CFR 413.17 / CMS Pub. 15-1, Sections 2150.2 and 2304 *Balance carried forward from prior/to subsequent adjustments Page 4 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number WINDSOR GARDENS CARE CENTER OF FULLERTON 23 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05689G Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENTS TO REPORTED COSTS 10.5 105 4 8A-2 105 4 Skilled Nursing Care - Other - Nonlabor * $228,924 15 To eliminate utilization review expense due to the fact that the State ($31,850) performs its own utilization review. CMS Pub. 15-1, Section 2126 CCR, Title 22, Sections 50009.1 and 51159 16 To eliminate physician services expense due to insufficient (13,145) documentation. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 17 To eliminate utilization review expense due to the fact that the State (500) performs its own utilization review. ($45,495) $183,429 CMS Pub. 15-1, Section 2126 CCR, Title 22, Sections 50009.1 and 51159 18 10.5 055 4 8A-2 055 4 Interest - Other * $29,896 ($331) $29,565 To abate interest income against interest expense. 42 CFR 413.153(b)(2)(iii) / CMS Pub. 15-1, Section 202.2 19 10.5 165 1 8A-2 165 1 Administration - Salaries and Wages * $504,821 ($44,896) $459,925 10.5 165 2 8A-2 165 2 Administration - Fringe Benefits * 145,619 (9,509) 136,110 To adjust administrator's compensation based on the Department of Health Care Services guidelines. 42 CFR 413.102 / CMS Pub. 15-1, Chapter 9 and Section 1005 SPA 05-005, Section (III)(J) / W&I Code, Section 14126.023(f) Medi-Cal Bulletin 371 20 10.5 168 4 8A-2 168 4 Administration - Liability Insurance $79,626 ($18,969) $60,657 To reconcile the reported expenses to agree with the provider's liability insurance policies. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 *Balance carried forward from prior/to subsequent adjustments Page 5 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number WINDSOR GARDENS CARE CENTER OF FULLERTON 23 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05689G Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENTS TO REPORTED COSTS 21 10.5 169 4 8A-2 169 4 Quality Assurance Fees $328,132 ($884) $327,248 To properly accrue quality assurance fees. 42 CFR 413.20 and 413.24 CMS Pub. 15-1, Sections 2300 and 2304 22 10.5 015 4 8A-2 015 4 Depreciation - Buildings and Improvements $0 $38,044 $38,044 10.5 035 4 8A-2 035 4 Leases and Rentals * 827,502 (802,164) 25,338 10.5 050 4 8A-2 050 4 Interest - Property, Plant, and Equipment 0 31,128 31,128 To include costs of ownership for assets subject to DEFRA in lieu of related party lease expense. 42 CFR 413.134, 413.17, 413.20 and 413.24 CMS Pub. 15-1, Sections 104.10 and 1011.5 *Balance carried forward from prior/to subsequent adjustments Page 6 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number WINDSOR GARDENS CARE CENTER OF FULLERTON 23 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05689G Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENT TO REPORTED STATISTICS 23 10.7 010 1, 2 7 010 Housekeeping (Square Feet) 0 1,975 1,975 10.7 060 1-3 7 060 Laundry and Linen 0 615 615 10.7 065 1-3 7 065 Dietary 0 2,232 2,232 10.7 075 1-3 7 075 Patient Supplies 87 (87) 0 10.7 080 1-3 7 080 Physical Therapy 212 (26) 186 10.7 082 1-3 7 082 Occupational Therapy 62 124 186 10.7 083 1-3 7 083 Speech Pathology 15 171 186 10.7 085 1-3 7 085 Pharmacy 72 (72) 0 10.7 105 1-3 7 105 Skilled Nursing Care 10,089 1,818 11,907 10.7 140 1-3 7 140 Beauty and Barber 40 (5) 35 10.7 155 1-3 7 155 Social Services 0 128 128 10.7 160 1-3 7 160 Activities 03636 10.7 165 1-3 7 165 Administration 0 701 701 10.7 166 1-3 7 166 Medical Records 08989 10.7 175 1 7 N/A Total Statistics - Square Feet 10,577 7,699 18,276 10.7 175 2 7 N/A Total Statistics - Square Feet 10,577 7,699 18,276 10.7 175 3 7 N/A Total Statistics - Square Feet 10,577 5,724 16,301 To adjust square footage to agree with the audited totals for the fiscal year ended December 31, 2008. 42 CFR 413.24 and 413.50 / CMS Pub. 15-1, Sections 2304 and 2306 Page 7 This is trial version www.adultpdf.com . CFR 413.20 and 413.24 / CMS Pub. 15 -1, Sections 2300 and 2304 Page 1 Adjustments JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05689G Cost Report Explanation of Audit Adjustments Report References Audit. (Decrease) Adjusted Adjustments JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05689G Cost Report Explanation of Audit Adjustments Report References Audit Report RECLASSIFICATIONS OF REPORTED COSTS 2 10.5. (Decrease) Adjusted Adjustments JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05689G Cost Report Explanation of Audit Adjustments Report References Audit Report RECLASSIFICATIONS OF REPORTED COSTS 5 10.5