Financial Impact

This calculation was prepared by William Hartung of Edgewood Consulting Group. It is a calculation of the financial impact of the change in case mix indices for Rural Health Care (Indianapolis, IN). This calculation has been prepared based on the time-weighted CMI report summaries, an April 1, 2006 Medicaid rate calculation, and information from the Long-Term Care Information System maintained by Myers and Stauffer. The time period covered by this analysis is July 1, 2005 through March 31, 2007.

The estimated financial benefit of the increase in the Medicaid case mix index is as follows. The estimate is based on a baseline Medicaid case mix index of 0.80.

Period Begining Period Ending Rate Change Revenue Change

July 1, 2005 September 30, 2005 $(0.63) $(2,696)

October 1, 2005 December 31, 2005 0.64 2,758

January 1, 2006 March 31, 2006 1.22 5,115

April 1, 2006 June 30, 2006 3.35 14,626

July 1, 2006 September 30, 2006 4.02 16,864

October 1, 2006 December 31, 2006 3.35 14,053*

January 1, 2007 March 31, 2007 2.68 10,999*

Total Reimbursement Increase $61,719

*Based on Medicaid patient days for the quarter ended September 30, 2006

50 Bed Facility

The Medicaid case mix index for Rural Health Care was 0.80 prior to the implementation of the Qtrac Software in the first quarter of 2005. The Medicaid case mix indices were as follows during 2005 and 2006.

It should be noted that the case mix index for all residents went from 0.86 in 2004 to 0.82 in 2005. Once the 2006 year is completed, there will likely be an increase in the case mix index for all residents.

Quarter Ended CMI

March 31, 2005                       0.79
June 30, 2005                         0.81
September 30, 2005                0.83
December 31, 2005                 0.85
March 31, 2006                       0.86
June 30, 2006                         0.85
September 30, 2006                0.84

Illinois Reimbursement Case Study

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