State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 33 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments BUENA PARK NURSING CENTER JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05571K Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENTS TO REPORTED COSTS 9 10.5 015 4 8A-2 015 4 Depreciation - Buildings and Improvements $62,969 ($62,969) $0 To eliminate cost of ownership in lieu of related party lease expenses due to lack of documentation. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 10 10.5 165 1 8A-2 165 1 Administration - Salaries and Wages * $462,970 ($16,849) $446,121 * To adjust administrator compensation based on the federal guidelines. 42 CFR 413.102 / CMS Pub. 15-1, Sections 901, 902.3, 904 and 1005 11 10.5 165 4 8A-2 165 4 Administration - Other - Nonlabor * $498,906 ($291,587) $207,319 To adjust reported home office costs to agree with the U.S. Skilled Serve Home Office Audit Report for fiscal period ended December 31, 2009. 42 CFR 413.17 / CMS Pub. 15-1, Sections 2150.2 and 2304 12 10.5 060 4 8A-2 060 4 Laundry and Linen - Other - Nonlabor $33,189 ($2,258) $30,931 10.5 075 4 8A-2 075 4 Patient Supplies - Other - Nonlabor 181,187 (25,523) 155,664 10.5 077 4 8A-2 077 4 Specialized Support Surfaces - Other - Nonlabor * 9,191 (786) 8,405 10.5 085 4 8A-2 085 4 Pharmacy - Other - Nonlabor 246,150 (15,513) 230,637 * 10.5 105 4 8A-2 105 4 Skilled Nursing Care - Other - Nonlabor * 265,934 (24,074) 241,860 * 10.5 125 4 8A-2 125 4 Subacute Care - Other - Nonlabor * 590,013 (50,442) 539,571 * To eliminate the profit factor from related party transactions. 42 CFR 413.17 / CMS Pub. 15-1, Section 1005 13 10.5 167 4 8A-2 167 4 Administration - DPH Licensing Fees * $47,878 ($6,837) $41,041 To adjust the reported DPH licensing fees to agree with the provider's invoice. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 *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 33 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments BUENA PARK NURSING CENTER JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05571K Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENTS TO REPORTED COSTS 14 10.5 168 4 8A-2 168 4 Administration - Liability Insurance $139,433 ($1,028) $138,405 To adjust the reported liability insurance to agree with the provider's invoice. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 15 10.5 169 4 8A-2 169 4 Administration - Quality Assurance Fees $463,451 ($319) $463,132 To adjust the reported Quality Assurance Fees to agree with the provider's invoice. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 16 10.5 105 4 8A-2 105 4 Skilled Nursing Care - Other - Nonlabor * $241,860 ($751) $241,109 To eliminate equipment rental expenses not applicable to the fiscal period under review. 42 CFR 413.5 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2302.1 17 10.5 125 4 8A-2 125 4 Subacute Care - Other - Nonlabor * $539,571 ($547) $539,024 * To eliminate oxygen and other gas expenses not applicable to the fiscal period under review. 42 CFR 413.5 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2302.1 18 10.5 165 1 8A-2 165 1 Administration - Salaries and Wages * $446,121 ($23,143) $422,978 To adjust administrator's salary to agree with the payroll records. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Section 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 33 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments BUENA PARK NURSING CENTER JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05571K Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENTS TO REPORTED STATISTICS 19 10.7 005 2, 3 7 005 Plant Operations and Maintenance (Square Feet) 0 736 736 10.7 010 2, 3 7 010 Housekeeping 05656 10.7 060 2, 3 7 060 Laundry and Linen 0 558 558 10.7 065 2, 3 7 065 Dietary 0 1,632 1,632 10.7 085 2, 3 7 085 Pharmacy 03535 10.7 155 2, 3 7 155 Social Services 0 135 135 10.7 160 2, 3 7 160 Activities 0 171 171 10.7 165 2, 3 7 165 Administration 0 993 993 10.7 166 2, 3 7 166 Medical Records 0 208 208 10.7 170 2, 3 7 170 Inservice Education - Nursing 0 70 70 To adjust square footage statistics to agree with the provider's statistics schedule. 42 CFR 413.24 and 413.50 / CMS Pub. 15-1, Sections 2304 and 2306 20 10.7 080 1 7 080 Physical Therapy (Square Feet) 190 87 277 10.7 080 2, 3 7 080 Physical Therapy * 190 87 277 10.7 082 1 7 082 Occupational Therapy 190 64 254 10.7 082 2, 3 7 082 Occupational Therapy * 190 64 254 10.7 083 1 7 083 Speech Pathology 190 (151) 39 10.7 083 2, 3 7 083 Speech Pathology * 35 4 39 To reclassify square footage statistics for proper cost findings. 42 CFR 413.24 and 413.50 / CMS Pub. 15-1, Sections 2304 and 2306 21 10.7 105 4 7 105 Skilled Nursing Care (Laundry Pounds) 714 164,796 165,510 To adjust pounds of laundry statistics to agree with the provider's statistics schedule. 42 CFR 413.24 and 413.50 / CMS Pub. 15-1, Sections 2304 and 2306 22 10.7 105 5 7 105 Skilled Nursing Care (Patient Meals) 99,306 14,551 113,857 10.7 125 5 7 125 Subacute Care 28,866 (7,303) 21,563 To adjust dietary statistics to agree with the provider's statistics schedule. 42 CFR 413.24 and 413.50 / CMS Pub. 15-1, Sections 2304 and 2306 Page 5 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 33 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments BUENA PARK NURSING CENTER JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05571K Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENT TO REPORTED TOTAL CHARGES 23 13 10 2 SA2 11.00 Total Ancillary Charges - Patient Supplies $269,994 ($54,697) $215,297 13 12 2 SA2 22.00 Total Ancillary Charges - Specialized Support Surfaces 4,625 (2,984) 1,641 13 15 2 SA2 33.00 Total Ancillary Charges - Physical Therapy 544,412 (3,727) 540,685 13 16 2 SA2 44.00 Total Ancillary Charges - Respiratory Therapy 4,610,391 (125,035) 4,485,356 13 17 2 SA2 55.00 Total Ancillary Charges - Occupational Therapy 428,532 (292) 428,240 13 18 2 SA2 66.00 Total Ancillary Charges - Speech Pathology 26,622 (3,884) 22,738 13 20 2 SA2 77.00 Total Ancillary Charges - Pharmacy 1,240,399 (36,439) 1,203,960 13 25 2 SA2 88.00 Total Ancillary Charges - Laboratory 136,010 (5,225) 130,785 13 35 2 SA2 110.00 Total Ancillary Charges - Other Ancillary Services 94,774 (1,356) 93,418 To adjust total ancillary charges to agree with the provider's trial balance. 42 CFR 413.20 and 413.50 / CMS Pub. 15-1, Section 2206 Page 6 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 33 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments BUENA PARK NURSING CENTER JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05571K Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENTS TO REPORTED MEDI-CAL SETTLEMENT DATA - SUBACUTE 24 4.3 100 2 SA1 48.00 Medi-Cal Subacute Days - Ventilator 2,893 (1,324) 1,569 4.3 120 2 SA1 44.00 Medi-Cal Subacute Days - Total 9,634 (6,177) 3,457 To adjust Medi-Cal Settlement Data to agree with the following EDS Paid Claims Summary: Report Date: September 15, 2010 Payment Period: January 1, 2009 through August 31, 2010 Service Period: January 1, 2009 through December 31, 2009 42 CFR 413.20, 413.50, 413.53, 413.60 and 413.64 CMS Pub. 15-1, Sections 2304 and 2408 25 4.3 100 1 SA1 48.00 Total Subacute Days - Ventilator 2,893 2,876 5,769 4.3 115 1 SA1 49.00 Total Subacute Days - Nonventilator 9,817 (2,876) 6,941 To adjust total subacute ventilator and nonventilator patient days to agree with the provider's patient census reports. 42 CFR 413.20 / CMS Pub. 15-1, Section 2304 26 13 10 4 SA2 11.00 Subacute Ancillary Charges - Patient Supplies $54,698 ($54,698) $0 13 12 4 SA2 22.00 Subacute Ancillary Charges - Specialized Support Services 2,984 (2,984) 0 13 15 4 SA2 33.00 Subacute Ancillary Charges - Physical Therapy 3,726 (3,726) 0 13 17 4 SA2 55.00 Subacute Ancillary Charges - Occupational Therapy 292 (292) 0 13 18 4 SA2 66.00 Subacute Ancillary Charges - Speech Pathology 3,884 (3,884) 0 13 20 4 SA2 77.00 Subacute Ancillary Charges - Pharmacy 36,439 (36,439) 0 13 25 4 SA2 88.00 Subacute Ancillary Charges - Laboratory 5,225 (5,225) 0 13 35 4 SA2 110.00 Subacute Ancillary Charges - Other Ancillary Services 1,350 (1,350) 0 To adjust subacute ancillary charges to agree with the provider's trial balance. 42 CFR 413.20 and 413.50 / CMS Pub. 15-1, Section 2206 Page 7 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 33 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments BUENA PARK NURSING CENTER JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05571K Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENTS TO OTHER MATTERS 27 Not Reported SA1 41.00 Contracted Number of Adult Subacute Beds 0 47 47 To adjust the reported number of beds to agree with the provider's subacute contract. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 28 Not Reported SA1 48.00 Ventilator Equipment $0 $96,142 $96,142 To include ventilator equipment expense in the audit report. 42 CFR 413.24 / CMS Pub. 15-1, Section 2304 29 10.5 101 4 8A-2 101 4 Subacute Ancillary Services - Other - Nonlabor $0 $11,210 $11,210 * 10.5 125 4 8A-2 125 4 Subacute Care - Other - Nonlabor * 539,024 (11,210) 527,814 * To reclassify the directly booked subacute nonprescription drugs for proper cost determination of subacute costs. CMS Pub. 15-1, Section 2304 CCR, Title 22, Section 51511.5 30 10.5 085 4 8A-2 085 4 Pharmacy - Other - Nonlabor * $230,637 $80,382 $311,019 * 10.5 125 4 8A-2 125 4 Subacute Care - Other - Nonlabor * 527,814 (80,382) 447,432 * To reclassify the directly booked subacute prescription drugs for proper cost determination of subacute costs. CMS Pub. 15-1, Section 2304 CCR, Title 22, Section 51511.5 31 10.5 085 4 8A-2 085 4 Pharmacy - Other - Nonlabor * $311,019 $117,815 $428,834 10.5 125 4 8A-2 125 4 Subacute Care - Other - Nonlabor * 447,432 (117,815) 329,617 * To reclassify the directly booked subacute prescription IV costs for proper cost determination of subacute costs. CMS Pub. 15-1, Section 2304 CCR, Title 22, Section 51511.5 *Balance carried forward from prior/to subsequent adjustments Page 8 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 33 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch. Line Sub No Reported (Decrease) Adjusted Adjustments BUENA PARK NURSING CENTER JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05571K Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENTS TO OTHER MATTERS 32 10.5 101 4 8A-2 101 4 Subacute Ancillary Services - Other - Nonlabor * $11,210 $21,394 $32,604 * 10.5 125 4 8A-2 125 4 Subacute Care - Other - Nonlabor * 329,617 (21,394) 308,223 To reclassify the direct costed subacute laboratory and x-ray costs for proper cost determination of subacute costs. CMS Pub. 15-1, Section 2304 CCR, Title 22, Section 51511.5 33 10.5 080 1 8A-2 080 1 Physical Therapy - Salaries and Wages $139,710 ($24,449) $115,261 10.5 080 2 8A-2 080 2 Physical Therapy - Fringe Benefits 43,174 (41,479) 1,695 10.5 082 1 8A-2 082 1 Occupational Therapy - Salaries and Wages 132,259 (22,233) 110,026 10.5 082 2 8A-2 082 2 Occupational Therapy - Fringe Benefits 25,169 (4,231) 20,938 10.5 082 4 8A-2 082 4 Occupational Therapy - Other - Nonlabor 10,464 (1,759) 8,705 10.5 083 1 8A-2 083 1 Speech Pathology - Salaries and Wages 18,986 (10,619) 8,367 10.5 083 2 8A-2 083 2 Speech Pathology - Fringe Benefits 5,209 (2,913) 2,296 10.5 083 4 8A-2 083 4 Speech Pathology - Other - Nonlabor 1,764 (987) 777 10.5 101 1 8A-2 101 1 Subacute Ancillary Services - Salaries and Wages 0 57,301 57,301 10.5 101 2 8A-2 101 2 Subacute Ancillary Services - Fringe Benefits 0 48,623 48,623 10.5 101 4 8A-2 101 4 Subacute Ancillary Services - Other - Nonlabor * 32,604 2,746 35,350 To reclassify subacute physical therapy, occupational therapy, and speech therapy services for proper cost determination of subacute costs. CMS Pub. 15-1, Section 2304 CCR, Title 22, Section 51511.5 *Balance carried forward from prior/to subsequent adjustments Page 9 This is trial version www.adultpdf.com . 2010 Payment Period: January 1, 2009 through August 31, 2010 Service Period: January 1, 2009 through December 31, 2009 42 CFR 413.20, 413.50, 413.53, 413.60 and 413.64 CMS Pub. 15 -1, Sections. (Decrease) Adjusted Adjustments BUENA PARK NURSING CENTER JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05571K Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENTS. (Decrease) Adjusted Adjustments BUENA PARK NURSING CENTER JANUARY 1, 2009 THROUGH DECEMBER 31, 2009 ZZT05571K Cost Report Explanation of Audit Adjustments Report References Audit Report ADJUSTMENT