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Longwood Management Corporation - Department of Health Care

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					                            REPORT
                             ON THE
                        HOME OFFICE AUDIT
            LONGWOOD MANAGEMENT CORPORATION
                 LOS ANGELES, CALIFORNIA
                       FISCAL PERIOD ENDED
                         FEBRUARY 29, 2008




                      Audits Section - Burbank
                       Financial Audits Branch
                      Audits and Investigations
           California Department of Health Care Services




Section Chief: Daniel J. Giardinelli
Audit Supervisor: Debra K. Blake
Auditor: Yanique French
                               State of California—Health and Human Services Agency
                              Department of Health Care Services

DAVID MAXWELL-JOLLY                                                                                     ARNOLD SCHWARZENEGGER
       Director                                                                                                 Governor




        February 19, 2009

        Randy Adler
        Chief Financial Officer
        Longwood Management Corporation
        4032 Wilshire Blvd, Room 600
        Los Angeles, CA 90010

        LONGWOOD MANAGEMENT CORPORATION
        FISCAL PERIOD ENDED FEBRUARY 29, 2008

        We have examined the Medi-Cal Home Office Cost Report for the fiscal period ended
        February 29, 2008. Our examination was made under the authority of Section 14170 of
        the Welfare and Institutions Code and, accordingly, included such tests of the
        accounting records and such other auditing procedures as we considered necessary in
        the circumstances.

        In our opinion, the data presented in the Summary of Audited Home Office Costs to
        Health Care Facilities represents a proper determination of home office allowable costs
        for the above fiscal period in accordance with Medi-Cal reimbursement principles. The
        audited home office cost will be incorporated, by separate adjustment, into each
        applicable facility audit report.

        This audit report includes the:

        1.        Summary of Audited Home Office Costs to Health Care Facilities and Supporting
                  Schedules

        2.        Audit Adjustments Schedule

        If you disagree with the decision of the Department, the results of the home office audit
        may only be appealed through each individual facility's audit report. Please refer to the
        appeal instructions in each facility’s audit report.




             Financial Audits/Burbank/A & I, MS 2101, 1405 North San Fernando Boulevard, Room 203, Burbank, CA 91504
                                            Telephone (818) 295-2620 FAX: (818) 563-3324
                                                  Internet Address: www.dhcs.ca.gov
Randy Adler
Page 2



If you have questions regarding this report, you may call the Audits Section—Burbank at
(818) 295-2620.

Original Signed By

Daniel J. Giardinelli, Chief
Audits Section—Burbank
Financial Audits Branch

Certified
                            TABLE OF CONTENTS


                                  SCHEDULES


1 -     SUMMARY OF AUDITED HOME OFFICE COSTS

2 -     AUDITED HOME OFFICE COST - CONCURRENT

2.1 -   CONCURRENT COST ALLOCATION - MOVABLE EQUIPMENT


2.2 -   CONCURRENT COST ALLOCATION - BUILDING AND FIXTURES


2.3 -   CONCURRENT COST ALLOCATION - NONCAPITAL


2.4 -   CONCURRENT COST ALLOCATION - QUALITY ASSURANCE


2.5 -   CONCURRENT COST ALLOCATION - DIETARY


2.6 -   CONCURRENT COST ALLOCATION - PLANT OPERATION


2.7 -   CONCURRENT COST ALLOCATION - SNF SUPPORT SERVICES


3 -     AUDITED HOME OFFICE COST - NONCONCURRENT

3.1 -   NONCONCURRENT COST ALLOCATION - MOVABLE EQUIPMENT

3.2 -   NONCONCURRENT COST ALLOCATION - BUILDING AND FIXTURES

3.3 -   NONCONCURRENT COST ALLOCATION - NONCAPITAL

3.4 -   NONCONCURRENT COST ALLOCATION - QUALITY ASSURANCE

3.5 -   NONCONCURRENT COST ALLOCATION - DIETARY

3.6 -   NONCONCURRENT COST ALLOCATION - PLANT OPERATION


3.7 -   NONCONCURRENT COST ALLOCATION - SNF SUPPORT SERVICES

4 -     ALLOCATION RATIO - CONCURRENT AND NONCONCURRENT

5 -     TOTAL AUDITED HOME OFFICE COSTS

6 -     AUDIT ADJUSTMENTS TO REPORTED HOME OFFICE COST
STATE OF CALIFORNIA                                                                                                        SCHEDULE 1

                                              SUMMARY OF AUDITED HOME OFFICE COSTS




HOME OFFICE:                                                                                                FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                             FEBRUARY 29, 2008

                                          MEDI-CAL                        AUDITED           AUDITED       TOTAL
         CHAIN COMPONENTS                 NUMBER         REPORTED      CONCURRENT       NONCONCURRENT    AUDITED        VARIANCE
                 1                           2              3                4                 5              6              7
                                                                        (From Sch 2)      (From Sch 3) (Col 5 & Col 4) (Col 6 - Col 3)

1. Alden Terrace Convalescent Hospital ZZT06237F            $697,612          $95,312            $285,936       $381,248      ($316,364)
2. Alameda Care Center                       ZZT18404I       280,564          127,738              25,548        153,286       (127,278)
3.    Broadway Manor Care Center             ZZT05670J       295,787          134,705              26,941        161,646       (134,141)
4.    Burbank Rehab Health Center            ZZT06129I       756,954          344,294              68,859        413,153       (343,801)
5.    Burlington Convalescent Hospital       ZZT05666I       374,049           68,139             136,278        204,418       (169,631)
6.    California Rehab Center                ZZT06149I       917,143          417,644              83,529        501,173       (415,970)
7.    Casa Bonita Convalescent Hospital      LTC06291J       503,899          229,487              45,897        275,384       (228,515)
8.    Chino Valley Rehab Center              ZZT05126I       310,323          140,977              28,195        169,172       (141,151)
9.    Colonial Care Center                   LTC06043G       803,864          366,075              73,215        439,290       (364,574)
10.   Covina Care Center                     ZZT05449H       545,157          248,254              49,651        297,905       (247,252)
11.   Crenshaw Convalescent Hospital         ZZT05525F       156,293           28,462              56,924         85,386        (70,907)
12.   Green Acres Lodge                      ZZT18146K       238,752          108,463              21,693        130,155       (108,597)
13.   Imperial Care Center                   ZZT05418G       438,613          199,522              39,904        239,427       (199,186)
14.   Imperial Crest Care Center             LTC55662G       336,465          152,883              30,577        183,460       (153,005)
15.   Intercommunity Healthcare              ZZT05457J       453,129          205,919              41,184        247,102       (206,027)
16.   Live Oak Rehab Center                  ZZT06127H       419,842          191,203              38,241        229,443       (190,399)
17.   Longwood Manor Care Center             ZZT05753F       827,614          151,032             302,064        453,095       (374,519)
18.   Magnolia Gardens Convalescent Hospital ZZT05142G       378,168           69,020             138,039        207,059       (171,109)
19.   Monterey Care Center                   ZZT18634J       288,832          131,542              26,308        157,850       (130,982)
20.   Montrose Healthcare                    ZZT05135H       222,701          101,364              20,273        121,637       (101,064)
21.   Northridge Care Center                 ZZT06224L       374,454          170,535              34,107        204,642       (169,812)
22.   Park Anaheim Healthcare                ZZT55035G       620,826          282,387              56,477        338,865       (281,961)
23.   Pico Rivera Healthcare                 ZZT05170L       311,794          141,791              28,358        170,149       (141,645)
24.   San Gabriel Convalescent Center        LTC05181H       487,386          221,966              44,393        266,359       (221,027)
25.   Shea Rehab Subacute Center             ZZT05764H       636,396          289,886              57,977        347,863       (288,533)
26.   Sherman Oaks Rehab Center              ZZT06250I       535,354          243,788              48,758        292,546       (242,808)
27.   Sherman Village Care Center            ZZT06159M       587,059          267,004              53,401        320,405       (266,654)
28.   Studio City Convalescent Hospital      LTC55686F       715,170          325,681              65,136        390,817       (324,353)
29.   Sunnyview Convalescent Hospital        LTC55071G       305,757          139,248              27,850        167,097       (138,660)
30.   View Park Convalescent Hospital        LTC55065G       329,719           60,290             120,580        180,870       (148,849)
31.   West Hills Rehab Center                ZZT06133H       572,282          260,342              52,068        312,411       (259,871)
32.   Western Convalescent Hospital          ZZT06233I       638,935          290,964              58,193        349,157       (289,778)
      Total - Health Care Facilities                     $15,360,893       $6,205,917          $2,186,554     $8,392,471    ($6,968,422)

      OTHER COMPONENTS
33. Mission Hospice                           N/A           $371,825        $147,994              $29,599      $177,592      ($194,233)
34. California Villa of Van Nuys              N/A            154,872          61,642               12,328        73,971        (80,901)
35. Crofton Manor                             N/A            107,061          17,045               34,090        51,134        (55,927)
36. Huntington Retirement Hotel               N/A            198,929          79,178               15,836        95,013       (103,916)
37. Pasadena Manor                            N/A             37,406           5,955               11,911        17,866        (19,540)
38. San Dimas Retirement Center               N/A            165,433          65,846               13,169        79,015        (86,418)
39. Woodland Hills Retirement                 N/A            119,128          18,966               37,932        56,898        (62,230)
40. Parkhurst Retirement Residential          N/A              1,253             449                  150           598           (655)
      Total - Other Components                            $1,155,907        $397,074             $155,014      $552,088      ($603,819)

                TOTALS                                   $16,516,800       $6,602,991          $2,341,568     $8,944,559    ($7,572,241)
STATE OF CALIFORNIA                                                                                                                                                              SCHEDULE 2

                                                                      AUDITED HOME OFFICE COST - CONCURRENT




HOME OFFICE:                                                                              FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                           FEBRUARY 29, 2008

                                             MEDI-CAL     New Cap. Rel.   New Cap. Rel.       Non-          Quality           Dietary            Plant         SNF Support          Total
         CHAIN COMPONENTS                    NUMBER        Mov. Equip.     Bldg. Fixt.       Capital       Assurance                           Operations       Services
                 1                              2              3               4               5               6                 7                 8               9                 10
                                                          (From Sch 2.1) (From Sch 2.2) (From Sch 2.3)    (From Sch 2.4)   (From Sch 2.5)     (From Sch 2.6)   (From Sch 2.7)    (Cols 3 - 9)

1. Alden Terrace Convalescent Hospital       ZZT06237F             $258            $307         $49,061          $9,906              $3,534         $10,655            $21,590       $95,312
2. Alameda Care Center                        ZZT18404I             346             412          65,752          13,277               4,737          14,280             28,935       127,738
3. Broadway Manor Care Center                ZZT05670J              365             435          69,338          14,001               4,995          15,059             30,513       134,705
4. Burbank Rehab Health Center                ZZT06129I             933           1,111         177,221          35,785              12,767          38,489             77,988       344,294
5. Burlington Convalescent Hospital           ZZT05666I             185             220          35,074           7,082               2,527           7,617             15,435        68,139
6. California Rehab Center                    ZZT06149I           1,132           1,347         214,977          43,408              15,486          46,689             94,603       417,644
7. Casa Bonita Convalescent Hospital         LTC06291J              622             740         118,126          23,852               8,509          25,655             51,982       229,487
8. Chino Valley Rehab Center                  ZZT05126I             382             455          72,566          14,653               5,227          15,760             31,933       140,977
9. Colonial Care Center                      LTC06043G              993           1,181         188,433          38,048              13,574          40,924             82,922       366,075
10. Covina Care Center                       ZZT05449H              673             801         127,786          25,803               9,205          27,753             56,233       248,254
11. Crenshaw Convalescent Hospital           ZZT05525F               77              92          14,650           2,958               1,055           3,182              6,447        28,462
12. Green Acres Lodge                        ZZT18146K              294             350          55,830          11,273               4,022          12,125             24,569       108,463
13. Imperial Care Center                     ZZT05418G              541             644         102,702          20,738               7,398          22,305             45,195       199,522
14. Imperial Crest Care Center               LTC55662G              415             493          78,695          15,890               5,669          17,091             34,630       152,883
15. Intercommunity Healthcare                ZZT05457J              558             664         105,994          21,402               7,636          23,020             46,644       205,919
16. Live Oak Rehab Center                    ZZT06127H              518             617          98,419          19,873               7,090          21,375             43,310       191,203
17. Longwood Manor Care Center               ZZT05753F              409             487          77,742          15,698               5,600          16,884             34,211       151,032
18. Magnolia Gardens Convalescent Hospital   ZZT05142G              187             223          35,527           7,174               2,559           7,716             15,634        69,020
19. Monterey Care Center                     ZZT18634J              357             424          67,709          13,672               4,878          14,705             29,796       131,542
20. Montrose Healthcare                      ZZT05135H              275             327          52,176          10,535               3,759          11,332             22,961       101,364
21. Northridge Care Center                   ZZT06224L              462             550          87,781          17,725               6,324          19,064             38,629       170,535
22. Park Anaheim Healthcare                  ZZT55035G              766             911         145,356          29,350              10,471          31,569             63,965       282,387
23. Pico Rivera Healthcare                   ZZT05170L              384             457          72,985          14,737               5,258          15,851             32,118       141,791
24. San Gabriel Convalescent Center          LTC05181H              602             716         114,254          23,070               8,231          24,814             50,279       221,966
25. Shea Rehab Subacute Center               ZZT05764H              786             935         149,215          30,130              10,749          32,407             65,664       289,886
26. Sherman Oaks Rehab Center                 ZZT06250I             661             787         125,487          25,338               9,040          27,254             55,222       243,788
27. Sherman Village Care Center              ZZT06159M              724             861         137,437          27,751               9,901          29,849             60,481       267,004
28. Studio City Convalescent Hospital        LTC55686F              883           1,051         167,640          33,850              12,076          36,408             73,772       325,681
29. Sunnyview Convalescent Hospital          LTC55071G              378             449          71,676          14,473               5,163          15,567             31,542       139,248
30. View Park Convalescent Hospital          LTC55065G              163            195           31,034           6,266            2,236              6,740             13,657        60,290
31. West Hills Rehab Center                  ZZT06133H              706            840          134,008          27,059            9,654             29,104             58,972       260,342
32. Western Convalescent Hospital             ZZT06233I             789            939          149,770          30,242           10,789             32,527             65,908       290,964
33. Total - Health Care Facilities                              $16,826        $20,022       $3,194,422        $645,020         $230,119           $693,771         $1,405,738    $6,205,917

    OTHER COMPONENTS
34. Mission Hospice                             N/A                $599          $713          $113,775              $0           $8,196            $24,710                 $0      $147,994
35. California Villa of Van Nuys                N/A                 250            297           47,390               0            3,414             10,292                  0        61,642
36. Crofton Manor                               N/A                  69             82           13,104               0              944              2,846                  0        17,045
37. Huntington Retirement Hotel                 N/A                 321            382           60,871               0            4,385             13,220                  0        79,178
38. Pasadena Manor                              N/A                  24             29            4,578               0              330                994                  0         5,955
39. San Dimas Retirement Center                 N/A                 267            317           50,621               0            3,647             10,994                  0        65,846
40. Woodland Hills Retirement                   N/A                  77             91           14,581               0            1,050              3,167                  0        18,966
41. Parkhurst Retirement Residential            N/A                   2              2              345               0               25                 75                  0           449
42. Total - Other Components                                     $1,608         $1,913         $305,265              $0          $21,991            $66,298                 $0      $397,074

                 TOTALS                                         $18,434        $21,935       $3,499,686        $645,020         $252,109           $760,069         $1,405,738    $6,602,991
                                                                                                                                                                                    (To Sch 1)
STATE OF CALIFORNIA                                                                                                  SCHEDULE 2.1

                                         CONCURRENT COST ALLOCATION - MOVABLE EQUIPMENT


HOME OFFICE:                                                                                          FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                       FEBRUARY 29, 2008

                         PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                                   Allocation    New Cap. Rel. New Cap. Rel. New Cap. Rel.
               FACILITY                                  Ratio    Statistic Cost  Mov. Equip.   Mov. Equip. Mov. Equip.
                    1                          2           3             4            5             6             6
                                                                     (Adj 28)
1.     Health Care Facilities                          0.910539    $250,141,518        $22,754    Ratio       Concurrent
2.     Other Components                                0.089461       24,576,663         2,236 Concurrent        Cost
3.               TOTAL                                 1.000000    $274,718,181        $24,990                Allocation
                                                                                 (From Sch 5)

                        PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                      Allocation      New Cap. Rel.      Ratio       New Cap. Rel.
        CHAIN COMPONENTS                      MEDI-CAL     Ratio       Statistic:      Mov. Equip.     Concurrent     Mov. Equip.
                                              NUMBER                 (Total Cost)
                                                                        (Adj 33)                      (From Sch 4)
 1.   Alden Terrace Convalescent Hospital    ZZT06237F   0.045427      $11,363,262          $1,034      0.250000            $258
 2.   Alameda Care Center                     ZZT18404I  0.018265         4,568,763            416      0.833333              346
 3.   Broadway Manor Care Center             ZZT05670J   0.019261         4,817,938            438      0.833333              365
 4.   Burbank Rehab Health Center             ZZT06129I  0.049229        12,314,225          1,120      0.833333              933
 5.   Burlington Convalescent Hospital        ZZT05666I  0.024357         6,092,763            554      0.333333              185
 6.   California Rehab Center                 ZZT06149I  0.059717        14,937,698          1,359      0.833333            1,132
 7.   Casa Bonita Convalescent Hospital      LTC06291J   0.032813         8,207,953            747      0.833333              622
 8.   Chino Valley Rehab Center               ZZT05126I  0.020158         5,042,248            459      0.833333              382
 9.   Colonial Care Center                   LTC06043G   0.052343        13,093,232          1,191      0.833333              993
10.   Covina Care Center                     ZZT05449H   0.035497         8,879,185            808      0.833333              673
11.   Crenshaw Convalescent Hospital         ZZT05525F   0.010174         2,544,964            232      0.333333               77
12.   Green Acres Lodge                      ZZT18146K   0.015509         3,879,336            353      0.833333              294
13.   Imperial Care Center                   ZZT05418G   0.028529         7,136,233            649      0.833333              541
14.   Imperial Crest Care Center             LTC55662G   0.021860         5,468,100            497      0.833333              415
15.   Intercommunity Healthcare              ZZT05457J   0.029443         7,364,998            670      0.833333              558
16.   Live Oak Rehab Center                  ZZT06127H   0.027339         6,838,670            622      0.833333              518
17.   Longwood Manor Care Center             ZZT05753F   0.053988        13,504,720          1,228      0.333333              409
18.   Magnolia Gardens Convalescent Hospital ZZT05142G   0.024672         6,171,497            561      0.333333              187
19.   Monterey Care Center                   ZZT18634J   0.018809         4,704,789            428      0.833333              357
20.   Montrose Healthcare                    ZZT05135H   0.014494         3,625,458            330      0.833333              275
21.   Northridge Care Center                 ZZT06224L   0.024384         6,099,443            555      0.833333              462
22.   Park Anaheim Healthcare                ZZT55035G   0.040377        10,100,024            919      0.833333              766
23.   Pico Rivera Healthcare                 ZZT05170L   0.020274         5,071,378            461      0.833333              384
24.   San Gabriel Convalescent Center        LTC05181H   0.031738         7,938,960            722      0.833333              602
25.   Shea Rehab Subacute Center             ZZT05764H   0.041449        10,368,231            943      0.833333              786
26.   Sherman Oaks Rehab Center               ZZT06250I  0.034858         8,719,471            793      0.833333              661
27.   Sherman Village Care Center            ZZT06159M   0.038178         9,549,822            869      0.833333              724
28.   Studio City Convalescent Hospital      LTC55686F   0.046568        11,648,476          1,060      0.833333              883
29.   Sunnyview Convalescent Hospital        LTC55071G   0.019910         4,980,409            453      0.833333              378
30.   View Park Convalescent Hospital        LTC55065G   0.021552         5,390,930            490      0.333333              163
31.   West Hills Rehab Center                ZZT06133H   0.037225         9,311,548            847      0.833333              706
32.   Western Convalescent Hospital           ZZT06233I  0.041604        10,406,794            947      0.833333              789
33.   Total - Health Care Facilities                     1.000000     $250,141,518         $22,754                        $16,826

      OTHER COMPONENTS                                                   (Adj )
34.   Mission Hospice                            N/A      0.321674       $7,905,671          $719      0.833333             $599
35.   California Villa of Van Nuys               N/A      0.133984        3,292,878            300     0.833333               250
36.   Crofton Manor                              N/A      0.092620        2,276,290            207     0.333333                69
37.   Huntington Retirement Hotel                N/A      0.172098        4,229,592            385     0.833333               321
38.   Pasadena Manor                             N/A      0.032361          795,324             72     0.333333                24
39.   San Dimas Retirement Center                N/A      0.143120        3,517,405            320     0.833333               267
40.   Woodland Hills Retirement                  N/A      0.103060        2,532,870            230     0.333333                77
41.   Parkhurst Retirement Residential           N/A      0.001084           26,633              2     0.750000                 2
42.   Total - Other Components                            1.000000      $24,576,663         $2,236                         $1,608

            GRAND TOTALS                                               $274,718,181        $24,990                        $18,434
                                                                                                                        (To Sch 2)
STATE OF CALIFORNIA                                                                                                 SCHEDULE 2.2

                               CONCURRENT COST ALLOCATION - NEW CAPITAL - BUILDING AND FIXTURES


HOME OFFICE:                                                                                           FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                        FEBRUARY 29, 2008

                           PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                                     Allocation    New Cap. Rel. New Cap. Rel. New Cap. Rel.
                FACILITY                                  Ratio     Statistic Cost Building & Fix. Building & Fix. Building & Fix.
                    1                          2            3              4              5              6               7
                                                                       (Adj 28)
1.     Health Care Facilities                           0.910539     $250,141,518         $27,076       Ratio       Concurrent
2.     Other Components                                 0.089461        24,576,663          2,660 Concurrent            Cost
3.               TOTAL                                  1.000000     $274,718,181         $29,736                    Allocation
                                                                                    (From Sch 5)

                         PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                       Allocation    New Cap. Rel.       Ratio    New Cap. Rel.
        CHAIN COMPONENTS                     MEDI-CAL       Ratio       Statistic:   Building & Fix. Concurrent Building & Fix.
                                             NUMBER                   (Total Cost)
                                                                         (Adj 33)                    (From Sch 4)
 1.   Alden Terrace Convalescent Hospital   ZZT06237F     0.045427      $11,363,262          $1,230    0.250000           $307
 2.   Alameda Care Center                    ZZT18404I    0.018265         4,568,763            495    0.833333            412
 3.   Broadway Manor Care Center            ZZT05670J     0.019261         4,817,938            522    0.833333            435
 4.   Burbank Rehab Health Center            ZZT06129I    0.049229        12,314,225          1,333    0.833333          1,111
 5.   Burlington Convalescent Hospital       ZZT05666I    0.024357         6,092,763            659    0.333333            220
 6.   California Rehab Center                ZZT06149I    0.059717        14,937,698          1,617    0.833333          1,347
 7.   Casa Bonita Convalescent Hospital     LTC06291J     0.032813         8,207,953            888    0.833333            740
 8.   Chino Valley Rehab Center              ZZT05126I    0.020158         5,042,248            546    0.833333            455
 9.   Colonial Care Center                 LTC06043G      0.052343        13,093,232          1,417    0.833333          1,181
10.   Covina Care Center                    ZZT05449H     0.035497         8,879,185            961    0.833333            801
11.   Crenshaw Convalescent Hospital        ZZT05525F     0.010174         2,544,964            275    0.333333             92
12.   Green Acres Lodge                     ZZT18146K     0.015509         3,879,336            420    0.833333            350
13.   Imperial Care Center                  ZZT05418G     0.028529         7,136,233            772    0.833333            644
14.   Imperial Crest Care Center           LTC55662G      0.021860         5,468,100            592    0.833333            493
15.   Intercommunity Healthcare             ZZT05457J     0.029443         7,364,998            797    0.833333            664
16.   Live Oak Rehab Center                 ZZT06127H     0.027339         6,838,670            740    0.833333            617
17.   Longwood Manor Care Center            ZZT05753F     0.053988        13,504,720          1,462    0.333333            487
18.   Magnolia Gardens Convalescent Hospit ZZT05142G      0.024672         6,171,497            668    0.333333            223
19.   Monterey Care Center                  ZZT18634J     0.018809         4,704,789            509    0.833333            424
20.   Montrose Healthcare                   ZZT05135H     0.014494         3,625,458            392    0.833333            327
21.   Northridge Care Center                ZZT06224L     0.024384         6,099,443            660    0.833333            550
22.   Park Anaheim Healthcare               ZZT55035G     0.040377        10,100,024          1,093    0.833333            911
23.   Pico Rivera Healthcare                ZZT05170L     0.020274         5,071,378            549    0.833333            457
24.   San Gabriel Convalescent Center       LTC05181H     0.031738         7,938,960            859    0.833333            716
25.   Shea Rehab Subacute Center            ZZT05764H     0.041449        10,368,231          1,122    0.833333            935
26.   Sherman Oaks Rehab Center              ZZT06250I    0.034858         8,719,471            944    0.833333            787
27.   Sherman Village Care Center           ZZT06159M     0.038178         9,549,822          1,034    0.833333            861
28.   Studio City Convalescent Hospital     LTC55686F     0.046568        11,648,476          1,261    0.833333          1,051
29.   Sunnyview Convalescent Hospital       LTC55071G     0.019910         4,980,409            539    0.833333            449
30.   View Park Convalescent Hospital      LTC55065G      0.021552         5,390,930            584    0.333333            195
31.   West Hills Rehab Center               ZZT06133H     0.037225         9,311,548          1,008    0.833333            840
32.   Western Convalescent Hospital          ZZT06233I    0.041604        10,406,794          1,126    0.833333            939
33.   Total - Health Care Facilities                      1.000000     $250,141,518         $27,076                    $20,022

      OTHER COMPONENTS                                                     (Adj )
34.   Mission Hospice                         N/A         0.321674         $7,905,671          $856     0.833333            $713
35.   California Villa of Van Nuys            N/A         0.133984          3,292,878            356    0.833333              297
36.   Crofton Manor                           N/A         0.092620          2,276,290            246    0.333333               82
37.   Huntington Retirement Hotel             N/A         0.172098          4,229,592            458    0.833333              382
38.   Pasadena Manor                          N/A         0.032361            795,324             86    0.333333               29
39.   San Dimas Retirement Center             N/A         0.143120          3,517,405            381    0.833333              317
40.   Woodland Hills Retirement               N/A         0.103060          2,532,870            274    0.333333               91
41.   Parkhurst Retirement Residential        N/A         0.001084             26,633              3    0.750000                2
42.   Total - Other Components                            1.000000        $24,576,663         $2,660                       $1,913

            GRAND TOTALS                                                 $274,718,181        $29,736                      $21,935
                                                                                                                        (To Sch 2)
STATE OF CALIFORNIA                                                                                             SCHEDULE 2.3

                                         CONCURRENT COST ALLOCATION - NONCAPITAL



HOME OFFICE:                                                                                    FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                 FEBRUARY 29, 2008

                       PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                             Allocation     Noncapital   Noncapital              Noncapital
             FACILITY                              Ratio    Statistic Cost
                  1                       2          3             4            5           6                        7
                                                               (Adj 28)
1.   Health Care Facilities                      0.910539    $250,141,518     $4,319,924                        Concurrent
2.   Other Components                                0.089461      24,576,663         424,437       Ratio          Cost
3.              TOTAL                                1.000000   $274,718,181       $4,744,361     Concurrent     Allocation
                                                                                (From Sch 5)


                    PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                Allocation      Noncapital          Ratio        Noncapital
     CHAIN COMPONENTS                    MEDI-CAL     Ratio      Statistic:                       Concurrent
                                         NUMBER                 (Total Cost)
                                                                  (Adj 33)                       (From Sch 4)
1. Alden Terrace Convalescent Hospital   ZZT06237F   0.045427    $11,363,262        $196,243      0.250000             $49,061
2. Alameda Care Center                   ZZT18404I   0.018265       4,568,763          78,902     0.833333               65,752
3. Broadway Manor Care Center            ZZT05670J   0.019261       4,817,938          83,205     0.833333               69,338
4. Burbank Rehab Health Center           ZZT06129I   0.049229      12,314,225         212,666     0.833333             177,221
5. Burlington Convalescent Hospital      ZZT05666I   0.024357       6,092,763         105,222     0.333333               35,074
6. California Rehab Center               ZZT06149I   0.059717      14,937,698         257,973     0.833333             214,977
7. Casa Bonita Convalescent Hospital     LTC06291J   0.032813       8,207,953         141,751     0.833333             118,126
8. Chino Valley Rehab Center             ZZT05126I   0.020158       5,042,248          87,079     0.833333               72,566
9. Colonial Care Center                  LTC06043G   0.052343      13,093,232         226,119     0.833333             188,433
10. Covina Care Center                   ZZT05449H   0.035497       8,879,185         153,343     0.833333             127,786
11. Crenshaw Convalescent Hospital       ZZT05525F   0.010174       2,544,964          43,951     0.333333               14,650
12. Green Acres Lodge                    ZZT18146K   0.015509       3,879,336          66,996     0.833333               55,830
13. Imperial Care Center                 ZZT05418G   0.028529       7,136,233         123,242     0.833333             102,702
14. Imperial Crest Care Center           LTC55662G   0.021860       5,468,100          94,434     0.833333               78,695
15. Intercommunity Healthcare            ZZT05457J   0.029443       7,364,998         127,193     0.833333             105,994
16. Live Oak Rehab Center                ZZT06127H   0.027339       6,838,670         118,103     0.833333               98,419
17. Longwood Manor Care Center           ZZT05753F   0.053988      13,504,720         233,225     0.333333               77,742
18. Magnolia Gardens Convalescent Hosp ZZT05142G     0.024672       6,171,497         106,581     0.333333               35,527
19. Monterey Care Center                 ZZT18634J   0.018809       4,704,789          81,251     0.833333               67,709
20. Montrose Healthcare                  ZZT05135H   0.014494       3,625,458          62,611     0.833333               52,176
21. Northridge Care Center               ZZT06224L   0.024384       6,099,443         105,337     0.833333               87,781
22. Park Anaheim Healthcare              ZZT55035G   0.040377      10,100,024         174,427     0.833333             145,356
23. Pico Rivera Healthcare               ZZT05170L   0.020274       5,071,378          87,582     0.833333               72,985
24. San Gabriel Convalescent Center      LTC05181H   0.031738       7,938,960         137,105     0.833333             114,254
25. Shea Rehab Subacute Center           ZZT05764H   0.041449      10,368,231         179,059     0.833333             149,215
26. Sherman Oaks Rehab Center            ZZT06250I   0.034858       8,719,471         150,585     0.833333             125,487
27. Sherman Village Care Center          ZZT06159M   0.038178       9,549,822         164,925     0.833333             137,437
28. Studio City Convalescent Hospital    LTC55686F   0.046568      11,648,476         201,168     0.833333             167,640
29. Sunnyview Convalescent Hospital      LTC55071G   0.019910       4,980,409          86,011     0.833333               71,676
30. View Park Convalescent Hospital      LTC55065G   0.021552       5,390,930          93,101     0.333333               31,034
31. West Hills Rehab Center              ZZT06133H   0.037225       9,311,548         160,810     0.833333             134,008
32. Western Convalescent Hospital        ZZT06233I   0.041604      10,406,794         179,724     0.833333             149,770
33. Total - Health Care Facilities                   1.000000   $250,141,518       $4,319,924                      $3,194,422


     OTHER COMPONENTS                                              (Adj )
34. Mission Hospice                         N/A      0.321674      $7,905,671       $136,530      0.833333          $113,775
35. California Villa of Van Nuys            N/A      0.133984       3,292,878          56,868     0.833333               47,390
36. Crofton Manor                           N/A      0.092620       2,276,290          39,311     0.333333               13,104
37. Huntington Retirement Hotel             N/A      0.172098       4,229,592          73,045     0.833333               60,871
38. Pasadena Manor                          N/A      0.032361         795,324          13,735     0.333333                4,578
39. San Dimas Retirement Center             N/A      0.143120       3,517,405          60,745     0.833333               50,621
40. Woodland Hills Retirement               N/A      0.103060       2,532,870          43,742     0.333333               14,581
41. Parkhurst Retirement Residential        N/A      0.001084          26,633            460      0.750000                 345
42. Total - Other Components                         1.000000    $24,576,663        $424,437                        $305,265

           GRAND TOTALS                                         $274,718,181       $4,744,361                      $3,499,686
(To Sch 2)
STATE OF CALIFORNIA                                                                                                SCHEDULE 2.4

                                     CONCURRENT COST ALLOCATION - QUALITY ASSURANCE



HOME OFFICE:                                                                                        FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                     FEBRUARY 29, 2008

                  PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                           Allocation     Quality    Quality                          Quality
             FACILITY                             Ratio  Statistic Cost Assurance   Assurance                        Assurance
                  1                     2           3           4           5          6                                7
                                                            (Adj 29)
1.   Health Care Facilities                     0.910539  $250,141,518     $872,282                                  Concurrent
2.   Other Components                                  0.089461     24,576,663                         Ratio           Cost
3.              TOTAL                                  1.000000   $274,718,181       $872,282       Concurrent       Allocation
                                                                                 (From Sch 5)


                  PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                  Allocation       Quality             Ratio          Quality
     CHAIN COMPONENTS                      MEDI-CAL     Ratio      Statistic:    Assurance             Non-          Assurance
                                           NUMBER                 (Total Cost)                      Concurrent
                                                                    (Adj 34)                        (From Sch 4)
1. Alden Terrace Convalescent Hospital    ZZT06237F    0.045427    $11,363,262        $39,625        0.250000            $9,906
2. Alameda Care Center                     ZZT18404I   0.018265      4,568,763         15,932        0.833333            13,277
3. Broadway Manor Care Center              ZZT05670J   0.019261      4,817,938         16,801        0.833333            14,001
4. Burbank Rehab Health Center             ZZT06129I   0.049229     12,314,225         42,942        0.833333            35,785
5. Burlington Convalescent Hospital        ZZT05666I   0.024357      6,092,763         21,246        0.333333             7,082
6. California Rehab Center                 ZZT06149I   0.059717     14,937,698         52,090        0.833333            43,408
7. Casa Bonita Convalescent Hospital       LTC06291J   0.032813      8,207,953         28,622        0.833333            23,852
8. Chino Valley Rehab Center               ZZT05126I   0.020158      5,042,248         17,583        0.833333            14,653
9. Colonial Care Center                   LTC06043G    0.052343     13,093,232         45,658        0.833333            38,048
10. Covina Care Center                    ZZT05449H    0.035497      8,879,185         30,963        0.833333            25,803
11. Crenshaw Convalescent Hospital        ZZT05525F    0.010174      2,544,964          8,875        0.333333             2,958
12. Green Acres Lodge                     ZZT18146K    0.015509      3,879,336         13,528        0.833333            11,273
13. Imperial Care Center                  ZZT05418G    0.028529      7,136,233         24,885        0.833333            20,738
14. Imperial Crest Care Center            LTC55662G    0.021860      5,468,100         19,068        0.833333            15,890
15. Intercommunity Healthcare              ZZT05457J   0.029443      7,364,998         25,683        0.833333            21,402
16. Live Oak Rehab Center                 ZZT06127H    0.027339      6,838,670         23,847        0.833333            19,873
17. Longwood Manor Care Center            ZZT05753F    0.053988     13,504,720         47,093        0.333333            15,698
18. Magnolia Gardens Convalescent Hosp ZZT05142G       0.024672      6,171,497         21,521        0.333333             7,174
19. Monterey Care Center                   ZZT18634J   0.018809      4,704,789         16,406        0.833333            13,672
20. Montrose Healthcare                   ZZT05135H    0.014494      3,625,458         12,643        0.833333            10,535
21. Northridge Care Center                 ZZT06224L   0.024384      6,099,443         21,270        0.833333            17,725
22. Park Anaheim Healthcare               ZZT55035G    0.040377     10,100,024         35,220        0.833333            29,350
23. Pico Rivera Healthcare                 ZZT05170L   0.020274      5,071,378         17,685        0.833333            14,737
24. San Gabriel Convalescent Center       LTC05181H    0.031738      7,938,960         27,684        0.833333            23,070
25. Shea Rehab Subacute Center            ZZT05764H    0.041449     10,368,231         36,156        0.833333            30,130
26. Sherman Oaks Rehab Center              ZZT06250I   0.034858      8,719,471         30,406        0.833333            25,338
27. Sherman Village Care Center           ZZT06159M    0.038178      9,549,822         33,302        0.833333            27,751
28. Studio City Convalescent Hospital     LTC55686F    0.046568     11,648,476         40,620        0.833333            33,850
29. Sunnyview Convalescent Hospital       LTC55071G    0.019910      4,980,409         17,367        0.833333            14,473
30. View Park Convalescent Hospital       LTC55065G    0.021552      5,390,930         18,799        0.333333             6,266
31. West Hills Rehab Center               ZZT06133H    0.037225      9,311,548         32,471        0.833333            27,059
32. Western Convalescent Hospital          ZZT06233I   0.041604     10,406,794         36,290        0.833333            30,242
33. Total - Health Care Facilities                     1.000000   $250,141,518       $872,282                          $645,020


     OTHER COMPONENTS                                                (Adj )
34. Mission Hospice                           N/A      0.321674     $7,905,671               $0      0.833333                   $0
35. California Villa of Van Nuys              N/A      0.133984      3,292,878                  0    0.833333                   0
36. Crofton Manor                             N/A      0.092620      2,276,290                  0    0.333333                   0
37. Huntington Retirement Hotel               N/A      0.172098      4,229,592                  0    0.833333                   0
38. Pasadena Manor                            N/A      0.032361        795,324                  0    0.333333                   0
39. San Dimas Retirement Center               N/A      0.143120      3,517,405                  0    0.833333                   0
40. Woodland Hills Retirement                 N/A      0.103060      2,532,870                  0    0.333333                   0
41. Parkhurst Retirement Residential          N/A      0.001084         26,633                  0    0.750000                   0
42. Total - Other Components                           1.000000    $24,576,663               $0                                 $0

           GRAND TOTALS                                           $274,718,181       $872,282                          $645,020
(To Sch 2)
STATE OF CALIFORNIA                                                                                              SCHEDULE 2.5

                                           CONCURRENT COST ALLOCATION - DIETARY



HOME OFFICE:                                                                                     FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                  FEBRUARY 29, 2008

                       PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                             Allocation     Dietary      Dietary                   Dietary
             FACILITY                              Ratio   Statistic Cost
                  1                       2          3            4           5            6                            7
                                                              (Adj 29)
1.   Health Care Facilities                      0.910539   $250,141,518       $311,198                          Concurrent
2.   Other Components                                0.089461     24,576,663          30,575         Ratio          Cost
3.              TOTAL                                1.000000   $274,718,181        $341,773       Concurrent     Allocation
                                                                               (From Sch 5)


                    PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                Allocation       Dietary                           Dietary
     CHAIN COMPONENTS                    MEDI-CAL     Ratio      Statistic:                          Ratio
                                         NUMBER                 (Total Cost)                       Concurrent
                                                                  (Adj 34)                        (From Sch 4)
1. Alden Terrace Convalescent Hospital   ZZT06237F   0.045427    $11,363,262         $14,137        0.250000                 $3,534
2. Alameda Care Center                   ZZT18404I   0.018265      4,568,763           5,684        0.833333                  4,737
3. Broadway Manor Care Center            ZZT05670J   0.019261      4,817,938           5,994        0.833333                  4,995
4. Burbank Rehab Health Center           ZZT06129I   0.049229     12,314,225          15,320        0.833333                 12,767
5. Burlington Convalescent Hospital      ZZT05666I   0.024357      6,092,763           7,580        0.333333                  2,527
6. California Rehab Center               ZZT06149I   0.059717     14,937,698          18,584        0.833333                 15,486
7. Casa Bonita Convalescent Hospital     LTC06291J   0.032813      8,207,953          10,211        0.833333                  8,509
8. Chino Valley Rehab Center             ZZT05126I   0.020158      5,042,248           6,273        0.833333                  5,227
9. Colonial Care Center                  LTC06043G   0.052343     13,093,232          16,289        0.833333                 13,574
10. Covina Care Center                   ZZT05449H   0.035497      8,879,185          11,046        0.833333                  9,205
11. Crenshaw Convalescent Hospital       ZZT05525F   0.010174      2,544,964           3,166        0.333333                  1,055
12. Green Acres Lodge                    ZZT18146K   0.015509      3,879,336           4,826        0.833333                  4,022
13. Imperial Care Center                 ZZT05418G   0.028529      7,136,233           8,878        0.833333                  7,398
14. Imperial Crest Care Center           LTC55662G   0.021860      5,468,100           6,803        0.833333                  5,669
15. Intercommunity Healthcare            ZZT05457J   0.029443      7,364,998           9,163        0.833333                  7,636
16. Live Oak Rehab Center                ZZT06127H   0.027339      6,838,670           8,508        0.833333                  7,090
17. Longwood Manor Care Center           ZZT05753F   0.053988     13,504,720          16,801        0.333333                  5,600
18. Magnolia Gardens Convalescent Hosp ZZT05142G     0.024672      6,171,497           7,678        0.333333                  2,559
19. Monterey Care Center                 ZZT18634J   0.018809      4,704,789           5,853        0.833333                  4,878
20. Montrose Healthcare                  ZZT05135H   0.014494      3,625,458           4,510        0.833333                  3,759
21. Northridge Care Center               ZZT06224L   0.024384      6,099,443           7,588        0.833333                  6,324
22. Park Anaheim Healthcare              ZZT55035G   0.040377     10,100,024          12,565        0.833333                 10,471
23. Pico Rivera Healthcare               ZZT05170L   0.020274      5,071,378           6,309        0.833333                  5,258
24. San Gabriel Convalescent Center      LTC05181H   0.031738      7,938,960           9,877        0.833333                  8,231
25. Shea Rehab Subacute Center           ZZT05764H   0.041449     10,368,231          12,899        0.833333                 10,749
26. Sherman Oaks Rehab Center            ZZT06250I   0.034858      8,719,471          10,848        0.833333                  9,040
27. Sherman Village Care Center          ZZT06159M   0.038178      9,549,822          11,881        0.833333                  9,901
28. Studio City Convalescent Hospital    LTC55686F   0.046568     11,648,476          14,492        0.833333                 12,076
29. Sunnyview Convalescent Hospital      LTC55071G   0.019910      4,980,409           6,196        0.833333                  5,163
30. View Park Convalescent Hospital      LTC55065G   0.021552      5,390,930           6,707        0.333333                  2,236
31. West Hills Rehab Center              ZZT06133H   0.037225      9,311,548          11,584        0.833333                  9,654
32. Western Convalescent Hospital        ZZT06233I   0.041604     10,406,794          12,947        0.833333                 10,789
33. Total - Health Care Facilities                   1.000000   $250,141,518        $311,198                            $230,119


     OTHER COMPONENTS                                              (Adj )
34. Mission Hospice                         N/A      0.321674     $7,905,671          $9,835        0.833333                 $8,196
35. California Villa of Van Nuys            N/A      0.133984      3,292,878           4,097        0.833333                  3,414
36. Crofton Manor                           N/A      0.092620      2,276,290           2,832        0.333333                   944
37. Huntington Retirement Hotel             N/A      0.172098      4,229,592           5,262        0.833333                  4,385
38. Pasadena Manor                          N/A      0.032361        795,324               989      0.333333                   330
39. San Dimas Retirement Center             N/A      0.143120      3,517,405           4,376        0.833333                  3,647
40. Woodland Hills Retirement               N/A      0.103060      2,532,870           3,151        0.333333                  1,050
41. Parkhurst Retirement Residential        N/A      0.001084         26,633               33       0.750000                    25
42. Total - Other Components                         1.000000    $24,576,663         $30,575                                $21,991

           GRAND TOTALS                                         $274,718,181        $341,773                            $252,109
(To Sch 2)
STATE OF CALIFORNIA                                                                                                 SCHEDULE 2.6

                                        CONCURRENT COST ALLOCATION - PLANT OPERATION



HOME OFFICE:                                                                                        FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                     FEBRUARY 29, 2008

                   PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                           Allocation Plant OperationPlant OperationPlant Operation
             FACILITY                             Ratio  Statistic Cost
                  1                     2           3           4            5              6              7
                                                            (Adj 29)
1.   Health Care Facilities                     0.910539  $250,141,518      $938,210                  Concurrent
2.   Other Components                                   0.089461     24,576,663          92,180         Ratio            Cost
3.              TOTAL                                   1.000000   $274,718,181       $1,030,390     Concurrent       Allocation
                                                                                   (From Sch 5)


                  PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                   Allocation     Plant Operation                   Plant Operation
     CHAIN COMPONENTS                       MEDI-CAL     Ratio      Statistic:                          Ratio
                                            NUMBER                 (Total Cost)                      Concurrent
                                                                     (Adj 34)                        (From Sch 4)
1. Alden Terrace Convalescent Hospital     ZZT06237F    0.045427    $11,363,262         $42,620       0.250000            $10,655
2. Alameda Care Center                      ZZT18404I   0.018265      4,568,763          17,136       0.833333             14,280
3. Broadway Manor Care Center               ZZT05670J   0.019261      4,817,938          18,071       0.833333             15,059
4. Burbank Rehab Health Center              ZZT06129I   0.049229     12,314,225          46,187       0.833333             38,489
5. Burlington Convalescent Hospital         ZZT05666I   0.024357      6,092,763          22,852       0.333333               7,617
6. California Rehab Center                  ZZT06149I   0.059717     14,937,698          56,027       0.833333             46,689
7. Casa Bonita Convalescent Hospital       LTC06291J    0.032813      8,207,953          30,786       0.833333             25,655
8. Chino Valley Rehab Center                ZZT05126I   0.020158      5,042,248          18,912       0.833333             15,760
9. Colonial Care Center                    LTC06043G    0.052343     13,093,232          49,109       0.833333             40,924
10. Covina Care Center                     ZZT05449H    0.035497      8,879,185          33,303       0.833333             27,753
11. Crenshaw Convalescent Hospital         ZZT05525F    0.010174      2,544,964           9,545       0.333333               3,182
12. Green Acres Lodge                      ZZT18146K    0.015509      3,879,336          14,550       0.833333             12,125
13. Imperial Care Center                   ZZT05418G    0.028529      7,136,233          26,766       0.833333             22,305
14. Imperial Crest Care Center             LTC55662G    0.021860      5,468,100          20,509       0.833333             17,091
15. Intercommunity Healthcare               ZZT05457J   0.029443      7,364,998          27,624       0.833333             23,020
16. Live Oak Rehab Center                  ZZT06127H    0.027339      6,838,670          25,650       0.833333             21,375
17. Longwood Manor Care Center             ZZT05753F    0.053988     13,504,720          50,652       0.333333             16,884
18. Magnolia Gardens Convalescent Hosp ZZT05142G        0.024672      6,171,497          23,148       0.333333               7,716
19. Monterey Care Center                    ZZT18634J   0.018809      4,704,789          17,646       0.833333             14,705
20. Montrose Healthcare                    ZZT05135H    0.014494      3,625,458          13,598       0.833333             11,332
21. Northridge Care Center                 ZZT06224L    0.024384      6,099,443          22,877       0.833333             19,064
22. Park Anaheim Healthcare                ZZT55035G    0.040377     10,100,024          37,882       0.833333             31,569
23. Pico Rivera Healthcare                 ZZT05170L    0.020274      5,071,378          19,021       0.833333             15,851
24. San Gabriel Convalescent Center        LTC05181H    0.031738      7,938,960          29,777       0.833333             24,814
25. Shea Rehab Subacute Center             ZZT05764H    0.041449     10,368,231          38,888       0.833333             32,407
26. Sherman Oaks Rehab Center               ZZT06250I   0.034858      8,719,471          32,704       0.833333             27,254
27. Sherman Village Care Center            ZZT06159M    0.038178      9,549,822          35,819       0.833333             29,849
28. Studio City Convalescent Hospital      LTC55686F    0.046568     11,648,476          43,690       0.833333             36,408
29. Sunnyview Convalescent Hospital        LTC55071G    0.019910      4,980,409          18,680       0.833333             15,567
30. View Park Convalescent Hospital        LTC55065G    0.021552      5,390,930          20,220       0.333333               6,740
31. West Hills Rehab Center                ZZT06133H    0.037225      9,311,548          34,925       0.833333             29,104
32. Western Convalescent Hospital           ZZT06233I   0.041604     10,406,794          39,033       0.833333             32,527
33. Total - Health Care Facilities                      1.000000   $250,141,518        $938,210                          $693,771


     OTHER COMPONENTS                                                 (Adj )
34. Mission Hospice                            N/A      0.321674     $7,905,671         $29,652       0.833333            $24,710
35. California Villa of Van Nuys               N/A      0.133984      3,292,878          12,351       0.833333             10,292
36. Crofton Manor                              N/A      0.092620      2,276,290           8,538       0.333333               2,846
37. Huntington Retirement Hotel                N/A      0.172098      4,229,592          15,864       0.833333             13,220
38. Pasadena Manor                             N/A      0.032361        795,324           2,983       0.333333                  994
39. San Dimas Retirement Center                N/A      0.143120      3,517,405          13,193       0.833333             10,994
40. Woodland Hills Retirement                  N/A      0.103060      2,532,870           9,500       0.333333               3,167
41. Parkhurst Retirement Residential           N/A      0.001084         26,633             100       0.750000                  75
42. Total - Other Components                            1.000000    $24,576,663         $92,180                           $66,298

           GRAND TOTALS                                            $274,718,181       $1,030,390                         $760,069
(To Sch 2)
STATE OF CALIFORNIA                                                                                                 SCHEDULE 2.7

                                     CONCURRENT COST ALLOCATION - SNF SUPPORT SERVICES



HOME OFFICE:                                                                                         FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                      FEBRUARY 29, 2008

                  PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                           Allocation   SNF Support SNF Support SNF Support
             FACILITY                             Ratio  Statistic Cost  Services    Services     Services
                  1                     2           3           4            5           6           7
                                                            (Adj 30)
1.   Health Care Facilities                     0.910539  $250,141,518    $1,901,027             Concurrent
2.   Other Components                                   0.089461     24,576,663                         Ratio           Cost
3.              TOTAL                                   1.000000   $274,718,181     $1,901,027       Concurrent       Allocation
                                                                                  (From Sch 5)


                  PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                   Allocation     SNF Support                        SNF Support
     CHAIN COMPONENTS                       MEDI-CAL     Ratio      Statistic:     Services             Ratio          Services
                                            NUMBER                 (Total Cost)                      Concurrent
                                                                     (Adj 35)                        (From Sch 4)
1. Alden Terrace Convalescent Hospital      ZZT06237F   0.045427    $11,363,262        $86,359        0.250000           $21,590
2. Alameda Care Center                      ZZT18404I   0.018265      4,568,763         34,722        0.833333            28,935
3. Broadway Manor Care Center               ZZT05670J   0.019261      4,817,938         36,615        0.833333            30,513
4. Burbank Rehab Health Center              ZZT06129I   0.049229     12,314,225         93,586        0.833333            77,988
5. Burlington Convalescent Hospital         ZZT05666I   0.024357      6,092,763         46,304        0.333333            15,435
6. California Rehab Center                  ZZT06149I   0.059717     14,937,698        113,524        0.833333            94,603
7. Casa Bonita Convalescent Hospital        LTC06291J   0.032813      8,207,953         62,379        0.833333            51,982
8. Chino Valley Rehab Center                ZZT05126I   0.020158      5,042,248         38,320        0.833333            31,933
9. Colonial Care Center                     LTC06043G   0.052343     13,093,232         99,506        0.833333            82,922
10. Covina Care Center                      ZZT05449H   0.035497      8,879,185         67,480        0.833333            56,233
11. Crenshaw Convalescent Hospital          ZZT05525F   0.010174      2,544,964         19,341        0.333333             6,447
12. Green Acres Lodge                       ZZT18146K   0.015509      3,879,336         29,482        0.833333            24,569
13. Imperial Care Center                    ZZT05418G   0.028529      7,136,233         54,234        0.833333            45,195
14. Imperial Crest Care Center              LTC55662G   0.021860      5,468,100         41,556        0.833333            34,630
15. Intercommunity Healthcare               ZZT05457J   0.029443      7,364,998         55,973        0.833333            46,644
16. Live Oak Rehab Center                   ZZT06127H   0.027339      6,838,670         51,973        0.833333            43,310
17. Longwood Manor Care Center              ZZT05753F   0.053988     13,504,720        102,633        0.333333            34,211
18. Magnolia Gardens Convalescent Hosp ZZT05142G        0.024672      6,171,497         46,902        0.333333            15,634
19. Monterey Care Center                    ZZT18634J   0.018809      4,704,789         35,755        0.833333            29,796
20. Montrose Healthcare                     ZZT05135H   0.014494      3,625,458         27,553        0.833333            22,961
21. Northridge Care Center                  ZZT06224L   0.024384      6,099,443         46,355        0.833333            38,629
22. Park Anaheim Healthcare                 ZZT55035G   0.040377     10,100,024         76,758        0.833333            63,965
23. Pico Rivera Healthcare                  ZZT05170L   0.020274      5,071,378         38,541        0.833333            32,118
24. San Gabriel Convalescent Center         LTC05181H   0.031738      7,938,960         60,335        0.833333            50,279
25. Shea Rehab Subacute Center              ZZT05764H   0.041449     10,368,231         78,797        0.833333            65,664
26. Sherman Oaks Rehab Center               ZZT06250I   0.034858      8,719,471         66,266        0.833333            55,222
27. Sherman Village Care Center             ZZT06159M   0.038178      9,549,822         72,577        0.833333            60,481
28. Studio City Convalescent Hospital       LTC55686F   0.046568     11,648,476         88,526        0.833333            73,772
29. Sunnyview Convalescent Hospital         LTC55071G   0.019910      4,980,409         37,850        0.833333            31,542
30. View Park Convalescent Hospital         LTC55065G   0.021552      5,390,930         40,970        0.333333            13,657
31. West Hills Rehab Center                 ZZT06133H   0.037225      9,311,548         70,766        0.833333            58,972
32. Western Convalescent Hospital           ZZT06233I   0.041604     10,406,794         79,090        0.833333            65,908
33. Total - Health Care Facilities                      1.000000   $250,141,518     $1,901,027                         $1,405,738


     OTHER COMPONENTS                                                 (Adj )
34. Mission Hospice                            N/A      0.321674     $7,905,671               $0      0.833333                 $0
35. California Villa of Van Nuys               N/A      0.133984      3,292,878                  0    0.833333                    0
36. Crofton Manor                              N/A      0.092620      2,276,290                  0    0.333333                    0
37. Huntington Retirement Hotel                N/A      0.172098      4,229,592                  0    0.833333                    0
38. Pasadena Manor                             N/A      0.032361        795,324                  0    0.333333                    0
39. San Dimas Retirement Center                N/A      0.143120      3,517,405                  0    0.833333                    0
40. Woodland Hills Retirement                  N/A      0.103060      2,532,870                  0    0.333333                    0
41. Parkhurst Retirement Residential           N/A      0.001084         26,633                  0    0.750000                    0
42. Total - Other Components                            1.000000    $24,576,663               $0                               $0

           GRAND TOTALS                                            $274,718,181     $1,901,027                         $1,405,738
(To Sch 2)
STATE OF CALIFORNIA                                                                                                                                                                SCHEDULE 3

                                                                     AUDITED HOME OFFICE COST - NONCONCURRENT




HOME OFFICE:                                                                         FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                      FEBRUARY 29, 2008

                                        MEDI-CAL      New Cap. Rel. New Cap. Rel.          Non-           Quality            Dietary             Plant               SNF               Total
         CHAIN COMPONENTS               NUMBER         Mov. Equip.    Bldg & Fixt         Capital        Assurance                             Operations       Support Services
                 1                         2               3              4                 5               6                   7                  8                   9               7
                                                     (From Sch 3.1) (From Sch 3.2)    (From Sch 3.3)    (From Sch 3.4)    (From Sch 3.5)      (From Sch 3.6)     (From Sch 3.7) (Cols 3, 4, 5 & 6)

1. Alden Terrace                        ZZT06237F            $775           $922            $147,182           $29,719              $10,603          $31,965             $64,769      $285,936
2. Alameda Care Center                   ZZT18404I              69             82              13,150            2,655                  947            2,856               5,787         25,548
3. Broadway Manor Care Center           ZZT05670J               73             87              13,868            2,800                  999            3,012               6,103         26,941
4. Burbank Rehab Healthcare              ZZT06129I             187            222              35,444            7,157                2,553            7,698              15,598         68,859
5. Burlington Convalescent Hospital      ZZT05666I             369            440              70,148           14,164                5,053           15,235              30,869        136,278
6. California Rehab                      ZZT06149I             226            269              42,995            8,682                3,097            9,338              18,921         83,529
7. Casa Bonita Convalescent Hospital    LTC06291J              124            148              23,625            4,770                1,702            5,131              10,396         45,897
8. Chino Valley Healthcare               ZZT05126I              76             91              14,513            2,931                1,045            3,152               6,387         28,195
9. Colonial Care Center                 LTC06043G              199            236              37,687            7,610                2,715            8,185              16,584         73,215
10. Covina Care Center                  ZZT05449H              135            160              25,557            5,161                1,841            5,551              11,247         49,651
11. Crenshaw Convalescent Hospital      ZZT05525F              154            184              29,301            5,916                2,111            6,364              12,894         56,924
12. Green Acres Lodge                   ZZT18146K               59             70              11,166            2,255                  804            2,425               4,914         21,693
13. Imperial Care Center                ZZT05418G              108            129              20,540            4,148                1,480            4,461               9,039         39,904
14. Imperial Crest                      LTC55662G               83             99              15,739            3,178                1,134            3,418               6,926         30,577
15. Intercommunity Healthcare           ZZT05457J              112            133              21,199            4,280                1,527            4,604               9,329         41,184
16. Live Oak Rehab Center               ZZT06127H              104            123              19,684            3,975                1,418            4,275               8,662         38,241
17. Longwood Manor Care Center          ZZT05753F              819            975             155,484           31,395               11,201           33,768              68,422        302,064
18. Magnolia Gardens Convalescent       ZZT05142G              374            445              71,054           14,347                5,119           15,432              31,268        138,039
19. Monterey Care Center                ZZT18634J               71             85              13,542            2,734                  976            2,941               5,959         26,308
20. Montrose Healthcare                 ZZT05135H               55             65              10,435            2,107                  752            2,266               4,592         20,273
21. Northridge Care Center              ZZT06224L               92            110              17,556            3,545                1,265            3,813               7,726         34,107
22. Park Anaheim Health Care            ZZT55035G              153            182              29,071            5,870                2,094            6,314              12,793         56,477
23. Pico Rivera Healthcare              ZZT05170L               77             91              14,597            2,947                1,052            3,170               6,424         28,358
24. San Gabriel Convalescent Center     LTC05181H              120            143              22,851            4,614                1,646            4,963              10,056         44,393
25. Shea Rehab Healthcare               ZZT05764H              157            187              29,843            6,026                2,150            6,481              13,133         57,977
26. Sherman Oaks Rehab                   ZZT06250I             132            157              25,097            5,068                1,808            5,451              11,044         48,758
27. Sherman Village Care Center         ZZT06159M              145            172              27,487            5,550                1,980            5,970              12,096         53,401
28. Studio City Convalescent Hospital   LTC55686F              177            210              33,528            6,770                2,415            7,282              14,754         65,136
29. Sunnyview Convalescent Hospital     LTC55071G               76             90              14,335            2,895                1,033            3,113               6,308         27,850
30. View Park Convalescent Hospital     LTC55065G              327            389              62,067           12,533                4,471           13,480              27,313        120,580
31. West Hills Rehab Center             ZZT06133H              141            168              26,802            5,412                1,931            5,821              11,794         52,068
32. Western Convalescent Hospital        ZZT06233I             158            188              29,954            6,048                2,158            6,505              13,182         58,193
33. Total - Health Care Facilities                          $5,928         $7,054          $1,125,502         $227,262              $81,079         $244,439            $495,289     $2,186,554

    OTHER COMPONENTS
34. Mission Hospice                        N/A                $120           $143            $22,755                 $0              $1,639            $4,942                 $0        $29,599
35. California Villa of Van Nuys           N/A                  50             59              9,478                  0                 683             2,058                  0         12,328
36. Crofton Manor                          N/A                 138            164             26,208                  0               1,888             5,692                  0         34,090
37. Huntington Retirement Hotel            N/A                  64             76             12,174                  0                 877             2,644                  0         15,836
38. Pasadena Manor                         N/A                  48             57              9,157                  0                 660             1,989                  0         11,911
39. San Dimas Retirement Center            N/A                  53             63             10,124                  0                 729             2,199                  0         13,169
40. Woodland Hills Retirement              N/A                 154            183             29,162                  0               2,101             6,333                  0         37,932
41. Parkhurst Retirement Residential       N/A                   1              1                115                  0                   8                25                  0            150
42. Total - Other Components                                  $628           $747           $119,172                 $0              $8,585           $25,882                 $0       $155,014

                 TOTALS                                     $6,556         $7,801          $1,244,675         $227,262              $89,664         $270,321            $495,289     $2,341,568
                                                                                                                                                                                       (To Sch 1)
STATE OF CALIFORNIA                                                                                              SCHEDULE 3.1

                                     NONCONCURRENT COST ALLOCATION - MOVABLE EQUIPMENT


HOME OFFICE:                                                                                      FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                   FEBRUARY 29, 2008

                        PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                                 Allocation   New Cap. Rel. New Cap. Rel. New Cap. Rel.
                FACILITY                              Ratio    Statistic Cost  Mov. Equip.   Mov. Equip.   Mov. Equip.
                    1                        2          3             4            5             6             6
                                                                  (Adj 31)                                   Non-
1.     Health Care Facilities                       0.910539    $250,141,518        $22,754    Ratio       Concurrent
2.     Other Components                                0.089461      24,576,663           2,236       Non-           Cost
3.                TOTAL                                1.000000   $274,718,181         $24,990     Concurrent      Allocation
                                                                                  (From Sch 5)

                      PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                  Allocation      New Cap. Rel.       Ratio      New Cap. Rel.
       CHAIN COMPONENTS                    MEDI-CAL     Ratio     Statistic:       Mov. Equip.        Non-        Mov. Equip.
                                            NUMBER                (Total Cost)                     Concurrent
                                                                    (Adj 36)                      (From Sch 4)
1. Alden Terrace Convalescent Hospital     ZZT06237F   0.045427    $11,363,262          $1,034      0.750000             $775
2. Alameda Care Center                     ZZT18404I   0.018265      4,568,763             416      0.166667               69
3. Broadway Manor Care Center              ZZT05670J   0.019261       4,817,938            438      0.166667                 73
4.    Burbank Rehab Health Center          ZZT06129I   0.049229     12,314,225            1,120     0.166667                187
5.    Burlington Convalescent Hospital     ZZT05666I   0.024357      6,092,763              554     0.666667                369
6.    California Rehab Center              ZZT06149I   0.059717     14,937,698            1,359     0.166667                226
7.    Casa Bonita Convalescent Hospital    LTC06291J   0.032813      8,207,953              747     0.166667                124
8.    Chino Valley Rehab Center            ZZT05126I   0.020158      5,042,248              459     0.166667                 76
 9. Colonial Care Center                   LTC06043G   0.052343     13,093,232            1,191    0.166667                 199
10. Covina Care Center                     ZZT05449H   0.035497      8,879,185              808    0.166667                 135
11. Crenshaw Convalescent Hospital         ZZT05525F   0.010174      2,544,964              232    0.666667                 154
12.   Green Acres Lodge                    ZZT18146K   0.015509       3,879,336            353     0.166667                  59
13.   Imperial Care Center                 ZZT05418G   0.028529       7,136,233            649     0.166667                 108
14.   Imperial Crest Care Center           LTC55662G   0.021860       5,468,100            497     0.166667                  83
15.   Intercommunity Healthcare            ZZT05457J   0.029443       7,364,998            670     0.166667                 112
16. Live Oak Rehab Center                 ZZT06127H    0.027339      6,838,670              622    0.166667                 104
17. Longwood Manor Care Center            ZZT05753F    0.053988     13,504,720            1,228    0.666667                 819
18. Magnolia Gardens Convalescent Hospita ZZT05142G    0.024672       6,171,497            561      0.666667                374
19. Monterey Care Center                  ZZT18634J    0.018809       4,704,789            428      0.166667                 71
20.   Montrose Healthcare                  ZZT05135H   0.014494       3,625,458            330      0.166667                 55
21.   Northridge Care Center               ZZT06224L   0.024384       6,099,443            555      0.166667                 92
22.   Park Anaheim Healthcare              ZZT55035G   0.040377      10,100,024            919      0.166667                153
23.   Pico Rivera Healthcare               ZZT05170L   0.020274       5,071,378            461      0.166667                 77
24.   San Gabriel Convalescent Center      LTC05181H   0.031738      7,938,960             722      0.166667              120
25.   Shea Rehab Subacute Center           ZZT05764H   0.041449     10,368,231             943      0.166667              157
26.   Sherman Oaks Rehab Center            ZZT06250I   0.034858      8,719,471             793      0.166667              132
27.   Sherman Village Care Center          ZZT06159M   0.038178      9,549,822             869      0.166667              145
28.   Studio City Convalescent Hospital    LTC55686F   0.046568     11,648,476           1,060      0.166667              177
29.   Sunnyview Convalescent Hospital      LTC55071G   0.019910      4,980,409             453      0.166667               76
30.   View Park Convalescent Hospital      LTC55065G   0.021552      5,390,930             490      0.666667              327
31.   West Hills Rehab Center              ZZT06133H   0.037225      9,311,548             847      0.166667              141
32.   Western Convalescent Hospital        ZZT06233I   0.041604     10,406,794             947      0.166667              158
33.   Total - Health Care Facilities                   1.000000   $250,141,518         $22,754                         $5,928

      OTHER COMPONENTS                                              (Adj )
34.   Mission Hospice                         N/A      0.321674     $7,905,671            $719      0.166667             $120
35.   California Villa of Van Nuys            N/A      0.133984      3,292,878             300      0.166667               50
36.   Crofton Manor                           N/A      0.092620      2,276,290             207      0.666667              138
37.   Huntington Retirement Hotel             N/A      0.172098      4,229,592             385      0.166667               64
38.   Pasadena Manor                          N/A      0.032361        795,324              72      0.666667               48
39.   San Dimas Retirement Center             N/A      0.143120      3,517,405             320      0.166667               53
40.   Woodland Hills Retirement               N/A      0.103060      2,532,870             230      0.666667              154
41.   Parkhurst Retirement Residential        N/A      0.001084         26,633               2      0.250000                1
42.   Total - Other Components                         1.000000    $24,576,663          $2,236                           $628

             GRAND TOTALS                                         $274,718,181         $24,990                         $6,556
                                                                                                                    (To Sch 3)
STATE OF CALIFORNIA                                                                                                     SCHEDULE 3.2

                                         NONCONCURRENT COST ALLOCATION - BUILDING AND FIXTURES


HOME OFFICE:                                                                                            FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                         FEBRUARY 29, 2008

                            PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                                     Allocation     Cap. Rel.       Cap. Rel.             Cap. Rel.
                FACILITY                                  Ratio    Statistic Cost Building & Fix. Building & Fix.       Building & Fix.
                    1                           2           3             4             5               6                     7
                                                                      (Adj 31)                                               Non-
1.     Health Care Facilities                           0.910539    $250,141,518         $27,076       Ratio             Concurrent
2.     Other Components                                     0.089461     24,576,663            2,660        Non-            Cost
3.                TOTAL                                     1.000000   $274,718,181         $29,736      Concurrent       Allocation
                                                                                       (From Sch 5)

                       PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                       Allocation     New Cap. Rel.         Ratio       New Cap. Rel.
       CHAIN COMPONENTS                        MEDI-CAL      Ratio     Statistic:     Building & Fix.       Non-        Building & Fix.
                                                NUMBER                 (Total Cost)                      Concurrent
                                                                         (Adj 36)                        (From Sch 4)
1. Alden Terrace Convalescent Hospital         ZZT06237F    0.045427    $11,363,262           $1,230      0.750000                 $922
2. Alameda Care Center                         ZZT18404I    0.018265      4,568,763              495      0.166667                   82
3. Broadway Manor Care Center                  ZZT05670J    0.019261      4,817,938              522      0.166667                   87
4.    Burbank Rehab Health Center              ZZT06129I    0.049229     12,314,225            1,333      0.166667                  222
5.    Burlington Convalescent Hospital         ZZT05666I    0.024357      6,092,763              659      0.666667                  440
6.    California Rehab Center                  ZZT06149I    0.059717     14,937,698            1,617      0.166667                  269
7.    Casa Bonita Convalescent Hospital        LTC06291J    0.032813      8,207,953              888      0.166667                  148
8.    Chino Valley Rehab Center                ZZT05126I    0.020158      5,042,248              546      0.166667                   91
 9. Colonial Care Center                       LTC06043G    0.052343     13,093,232            1,417      0.166667                  236
10. Covina Care Center                         ZZT05449H    0.035497      8,879,185              961      0.166667                  160
11. Crenshaw Convalescent Hospital             ZZT05525F    0.010174      2,544,964              275      0.666667                  184
12.   Green Acres Lodge                        ZZT18146K    0.015509      3,879,336              420      0.166667                   70
13.   Imperial Care Center                     ZZT05418G    0.028529      7,136,233              772      0.166667                  129
14.   Imperial Crest Care Center               LTC55662G    0.021860      5,468,100              592      0.166667                   99
15.   Intercommunity Healthcare                ZZT05457J    0.029443      7,364,998              797      0.166667                  133
16. Live Oak Rehab Center                      ZZT06127H    0.027339      6,838,670              740      0.166667                  123
17. Longwood Manor Care Center                 ZZT05753F    0.053988     13,504,720            1,462      0.666667                  975
18. Magnolia Gardens Convalescent Hospita      ZZT05142G    0.024672      6,171,497              668      0.666667                  445
19. Monterey Care Center                       ZZT18634J    0.018809      4,704,789              509      0.166667                   85
20.   Montrose Healthcare                      ZZT05135H    0.014494      3,625,458              392      0.166667                   65
21.   Northridge Care Center                   ZZT06224L    0.024384      6,099,443              660      0.166667                  110
22.   Park Anaheim Healthcare                  ZZT55035G    0.040377     10,100,024            1,093      0.166667                  182
23.   Pico Rivera Healthcare                   ZZT05170L    0.020274      5,071,378              549      0.166667                   91
24.   San Gabriel Convalescent Center          LTC05181H    0.031738      7,938,960             859       0.166667                 143
25.   Shea Rehab Subacute Center               ZZT05764H    0.041449     10,368,231           1,122       0.166667                 187
26.   Sherman Oaks Rehab Center                 ZZT06250I   0.034858      8,719,471             944       0.166667                 157
27.   Sherman Village Care Center              ZZT06159M    0.038178      9,549,822           1,034       0.166667                 172
28.   Studio City Convalescent Hospital        LTC55686F    0.046568     11,648,476           1,261       0.166667                 210
29.   Sunnyview Convalescent Hospital          LTC55071G    0.019910      4,980,409             539       0.166667                  90
30.   View Park Convalescent Hospital          LTC55065G    0.021552      5,390,930             584       0.666667                 389
31.   West Hills Rehab Center                  ZZT06133H    0.037225      9,311,548           1,008       0.166667                 168
32.   Western Convalescent Hospital            ZZT06233I    0.041604     10,406,794           1,126       0.166667                 188
33.   Total - Health Care Facilities                        1.000000   $250,141,518         $27,076                             $7,054

      OTHER COMPONENTS                                                    (Adj )
34.   Mission Hospice                             N/A       0.321674     $7,905,671             $856      0.166667                  143
35.   California Villa of Van Nuys                N/A       0.133984      3,292,878              356      0.166667                   59
36.   Crofton Manor                               N/A       0.092620      2,276,290              246      0.666667                  164
37.   Huntington Retirement Hotel                 N/A       0.172098      4,229,592              458      0.166667                   76
38.   Pasadena Manor                              N/A       0.032361        795,324               86      0.666667                   57
39.   San Dimas Retirement Center                 N/A       0.143120      3,517,405              381      0.166667                   63
40.   Woodland Hills Retirement                   N/A       0.103060      2,532,870              274      0.666667                  183
41.   Parkhurst Retirement Residential            N/A       0.001084         26,633                3      0.250000                    1
42.   Total - Other Components                              1.000000    $24,576,663           $2,660                               $747

             GRAND TOTALS                                              $274,718,181         $29,736                             $7,801
                                                                                                                             (To Sch 3)
STATE OF CALIFORNIA                                                                                               SCHEDULE 3.3

                                         NONCONCURRENT COST ALLOCATION - NONCAPITAL


HOME OFFICE:                                                                                       FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                    FEBRUARY 29, 2008

                      PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                                Allocation    Noncapital  Noncapital                Noncapital
                FACILITY                              Ratio   Statistic Cost    Costs
                    1                       2           3           4             5          6                         7
                                                                 (Adj 31)                                            Non-
1.     Health Care Facilities                       0.910539   $250,141,518    $4,319,924   Ratio                  Concurrent
2.     Other Components                             0.089461     24,576,663       424,437   Non-                     Cost
3.               TOTAL                                    1.000000   $274,718,181     $4,744,361    Concurrent      Allocation
                                                                                    (From Sch 5)

                     PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                      Allocation    Noncapital        Ratio         Noncapital
       CHAIN COMPONENTS                      MEDI-CAL      Ratio       Statistic:                     Non-
                                             NUMBER                  (Total Cost)                   Concurrent
                                                                       (Adj 36)                    (From Sch 4)
 1.   Alden Terrace Convalescent Hospital    ZZT06237F    0.045427    $11,363,262      $196,243      0.750000         $147,182
 2.   Alameda Care Center                     ZZT18404I   0.018265      4,568,763         78,902     0.166667            13,150
 3.   Broadway Manor Care Center             ZZT05670J    0.019261      4,817,938         83,205     0.166667            13,868
 4.   Burbank Rehab Health Center             ZZT06129I   0.049229     12,314,225        212,666     0.166667            35,444
 5.   Burlington Convalescent Hospital        ZZT05666I   0.024357      6,092,763        105,222     0.666667            70,148
 6.   California Rehab Center                 ZZT06149I   0.059717     14,937,698        257,973     0.166667            42,995
 7.   Casa Bonita Convalescent Hospital      LTC06291J    0.032813      8,207,953        141,751     0.166667            23,625
 8.   Chino Valley Rehab Center               ZZT05126I   0.020158      5,042,248         87,079     0.166667            14,513
 9.   Colonial Care Center                   LTC06043G    0.052343     13,093,232        226,119     0.166667            37,687
10.   Covina Care Center                     ZZT05449H    0.035497      8,879,185        153,343     0.166667            25,557
11.   Crenshaw Convalescent Hospital         ZZT05525F    0.010174      2,544,964         43,951     0.666667            29,301
12.   Green Acres Lodge                      ZZT18146K    0.015509      3,879,336         66,996     0.166667            11,166
13.   Imperial Care Center                   ZZT05418G    0.028529      7,136,233        123,242     0.166667            20,540
14.   Imperial Crest Care Center             LTC55662G    0.021860      5,468,100         94,434     0.166667            15,739
15.   Intercommunity Healthcare              ZZT05457J    0.029443      7,364,998        127,193     0.166667            21,199
16.   Live Oak Rehab Center                  ZZT06127H    0.027339      6,838,670        118,103     0.166667            19,684
17.   Longwood Manor Care Center             ZZT05753F    0.053988     13,504,720        233,225     0.666667           155,484
18.   Magnolia Gardens Convalescent Hospit   ZZT05142G    0.024672      6,171,497        106,581     0.666667            71,054
19.   Monterey Care Center                   ZZT18634J    0.018809      4,704,789         81,251     0.166667            13,542
20.   Montrose Healthcare                    ZZT05135H    0.014494      3,625,458         62,611     0.166667            10,435
21.   Northridge Care Center                 ZZT06224L    0.024384      6,099,443        105,337     0.166667            17,556
22.   Park Anaheim Healthcare                ZZT55035G    0.040377     10,100,024        174,427     0.166667            29,071
23.   Pico Rivera Healthcare                 ZZT05170L    0.020274      5,071,378         87,582     0.166667            14,597
24.   San Gabriel Convalescent Center        LTC05181H    0.031738      7,938,960        137,105     0.166667            22,851
25.   Shea Rehab Subacute Center             ZZT05764H    0.041449     10,368,231        179,059     0.166667            29,843
26.   Sherman Oaks Rehab Center               ZZT06250I   0.034858      8,719,471        150,585     0.166667            25,097
27.   Sherman Village Care Center            ZZT06159M    0.038178      9,549,822        164,925     0.166667            27,487
28.   Studio City Convalescent Hospital      LTC55686F    0.046568     11,648,476        201,168     0.166667            33,528
29.   Sunnyview Convalescent Hospital        LTC55071G    0.019910      4,980,409         86,011     0.166667            14,335
30.   View Park Convalescent Hospital        LTC55065G    0.021552      5,390,930         93,101     0.666667            62,067
31.   West Hills Rehab Center                ZZT06133H    0.037225      9,311,548        160,810     0.166667            26,802
32.   Western Convalescent Hospital           ZZT06233I   0.041604     10,406,794        179,724     0.166667            29,954
33.   Total - Health Care Facilities                      1.000000   $250,141,518     $4,319,924                     $1,125,502

      OTHER COMPONENTS                                                  (Adj )
34.   Mission Hospice                           N/A       0.321674     $7,905,671       $136,530    0.166667           $22,755
35.   California Villa of Van Nuys              N/A       0.133984      3,292,878         56,868    0.166667             9,478
36.   Crofton Manor                             N/A       0.092620      2,276,290         39,311    0.666667            26,208
37.   Huntington Retirement Hotel               N/A       0.172098      4,229,592         73,045    0.166667            12,174
38.   Pasadena Manor                            N/A       0.032361        795,324         13,735    0.666667             9,157
39.   San Dimas Retirement Center               N/A       0.143120      3,517,405         60,745    0.166667            10,124
40.   Woodland Hills Retirement                 N/A       0.103060      2,532,870         43,742    0.666667            29,162
41.   Parkhurst Retirement Residential          N/A       0.001084         26,633            460    0.250000               115
42.   Total - Other Components                            1.000000    $24,576,663       $424,437                      $119,172

            GRAND TOTALS                                             $274,718,181     $4,744,361                     $1,244,675
                                                                                                                      (To Sch 3)
STATE OF CALIFORNIA                                                                                                 SCHEDULE 3.4

                                     NONCONCURRENT COST ALLOCATION - QUALITY ASSURANCE



HOME OFFICE:                                                                                         FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                      FEBRUARY 29, 2008

                  PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                           Allocation     Q/A        Q/A                                Q/A
             FACILITY                             Ratio  Statistic Cost   Costs
                  1                     2           3           4           5         6                                   7
                                                            (Adj 32)                                                    Non-
1.   Health Care Facilities                     0.910539  $250,141,518     $872,282  Ratio                            Concurrent
2.   Other Components                                   0.089461     24,576,663                         Non-            Cost
3.              TOTAL                                   1.000000   $274,718,181       $872,282       Concurrent       Allocation
                                                                                  (From Sch 5)


                  PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                   Allocation         Q/A               Ratio            Q/A
     CHAIN COMPONENTS                       MEDI-CAL     Ratio      Statistic:                          Non-
                                             NUMBER                (Total Cost)                      Concurrent
                                                                     (Adj 37)                        (From Sch 4)
1. Alden Terrace Convalescent Hospital      ZZT06237F   0.045427    $11,363,262        $39,625        0.750000           $29,719
2. Alameda Care Center                      ZZT18404I   0.018265      4,568,763         15,932        0.166667             2,655
3. Broadway Manor Care Center               ZZT05670J   0.019261      4,817,938         16,801        0.166667             2,800
4. Burbank Rehab Health Center              ZZT06129I   0.049229     12,314,225         42,942        0.166667             7,157
5. Burlington Convalescent Hospital         ZZT05666I   0.024357      6,092,763         21,246        0.666667            14,164
6. California Rehab Center                  ZZT06149I   0.059717     14,937,698         52,090        0.166667             8,682
7. Casa Bonita Convalescent Hospital        LTC06291J   0.032813      8,207,953         28,622        0.166667             4,770
8. Chino Valley Rehab Center                ZZT05126I   0.020158      5,042,248         17,583        0.166667             2,931
9. Colonial Care Center                     LTC06043G   0.052343     13,093,232         45,658        0.166667             7,610
10. Covina Care Center                      ZZT05449H   0.035497      8,879,185         30,963        0.166667             5,161
11. Crenshaw Convalescent Hospital          ZZT05525F   0.010174      2,544,964          8,875        0.666667             5,916
12. Green Acres Lodge                       ZZT18146K   0.015509      3,879,336         13,528        0.166667             2,255
13. Imperial Care Center                    ZZT05418G   0.028529      7,136,233         24,885        0.166667             4,148
14. Imperial Crest Care Center              LTC55662G   0.021860      5,468,100         19,068        0.166667             3,178
15. Intercommunity Healthcare               ZZT05457J   0.029443      7,364,998         25,683        0.166667             4,280
16. Live Oak Rehab Center                   ZZT06127H   0.027339      6,838,670         23,847        0.166667             3,975
17. Longwood Manor Care Center              ZZT05753F   0.053988     13,504,720         47,093        0.666667            31,395
18. Magnolia Gardens Convalescent Hosp ZZT05142G        0.024672      6,171,497         21,521        0.666667            14,347
19. Monterey Care Center                    ZZT18634J   0.018809      4,704,789         16,406        0.166667             2,734
20. Montrose Healthcare                     ZZT05135H   0.014494      3,625,458         12,643        0.166667             2,107
21. Northridge Care Center                  ZZT06224L   0.024384      6,099,443         21,270        0.166667             3,545
22. Park Anaheim Healthcare                 ZZT55035G   0.040377     10,100,024         35,220        0.166667             5,870
23. Pico Rivera Healthcare                  ZZT05170L   0.020274      5,071,378         17,685        0.166667             2,947
24. San Gabriel Convalescent Center         LTC05181H   0.031738      7,938,960         27,684        0.166667             4,614
25. Shea Rehab Subacute Center              ZZT05764H   0.041449     10,368,231         36,156        0.166667             6,026
26. Sherman Oaks Rehab Center               ZZT06250I   0.034858      8,719,471         30,406        0.166667             5,068
27. Sherman Village Care Center             ZZT06159M   0.038178      9,549,822         33,302        0.166667             5,550
28. Studio City Convalescent Hospital       LTC55686F   0.046568     11,648,476         40,620        0.166667             6,770
29. Sunnyview Convalescent Hospital         LTC55071G   0.019910      4,980,409         17,367        0.166667             2,895
30. View Park Convalescent Hospital         LTC55065G   0.021552      5,390,930         18,799        0.666667            12,533
31. West Hills Rehab Center                 ZZT06133H   0.037225      9,311,548         32,471        0.166667             5,412
32. Western Convalescent Hospital           ZZT06233I   0.041604     10,406,794         36,290        0.166667             6,048
33. Total - Health Care Facilities                      1.000000   $250,141,518       $872,282                          $227,262


     OTHER COMPONENTS                                                 (Adj )
34. Mission Hospice                            N/A      0.321674     $7,905,671             $0        0.166667                 $0
35. California Villa of Van Nuys               N/A      0.133984      3,292,878                  0    0.166667                 0
36. Crofton Manor                              N/A      0.092620      2,276,290                  0    0.666667                 0
37. Huntington Retirement Hotel                N/A      0.172098      4,229,592                  0    0.166667                 0
38. Pasadena Manor                             N/A      0.032361        795,324                  0    0.666667                 0
39. San Dimas Retirement Center                N/A      0.143120      3,517,405                  0    0.166667                 0
40. Woodland Hills Retirement                  N/A      0.103060      2,532,870                  0    0.666667                 0
41. Parkhurst Retirement Residential           N/A      0.001084         26,633                  0    0.250000                 0
42. Total - Other Components                            1.000000    $24,576,663             $0                                 $0

           GRAND TOTALS                                            $274,718,181       $872,282                          $227,262
(To Sch 3)
STATE OF CALIFORNIA                                                                                                    SCHEDULE 3.5

                                             NONCONCURRENT COST ALLOCATION - DIETARY



HOME OFFICE:                                                                                         FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                      FEBRUARY 29, 2008

                            PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                                Allocation       Dietary       Dietary                      Dietary
             FACILITY                                Ratio    Statistic Cost     Costs
                  1                        2           3             4             5             6                         7
                                                                 (Adj 32)                                                Non-
1.   Health Care Facilities                        0.910539      $250,141,518       $311,198    Ratio                  Concurrent
2.   Other Components                                0.089461       24,576,663           30,575           Non-              Cost
3.              TOTAL                                1.000000     $274,718,181         $341,773        Concurrent      Allocation
                                                                                 (From Sch 5)


                       PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                Allocation         Dietary                Ratio             Dietary
     CHAIN COMPONENTS                    MEDI-CAL     Ratio      Statistic:                               Non-
                                         NUMBER                 (Total Cost)                           Concurrent
                                                                  (Adj 37)                             (From Sch 4)
1. Alden Terrace Convalescent Hospital   ZZT06237F   0.045427      $11,363,262          $14,137         0.750000                $10,603
2. Alameda Care Center                   ZZT18404I   0.018265        4,568,763            5,684         0.166667                      947
3. Broadway Manor Care Center            ZZT05670J   0.019261        4,817,938            5,994         0.166667                      999
4. Burbank Rehab Health Center           ZZT06129I   0.049229       12,314,225           15,320         0.166667                    2,553
5. Burlington Convalescent Hospital      ZZT05666I   0.024357        6,092,763            7,580         0.666667                    5,053
6. California Rehab Center               ZZT06149I   0.059717       14,937,698           18,584         0.166667                    3,097
7. Casa Bonita Convalescent Hospital     LTC06291J   0.032813        8,207,953           10,211         0.166667                    1,702
8. Chino Valley Rehab Center             ZZT05126I   0.020158        5,042,248            6,273         0.166667                    1,045
9. Colonial Care Center                  LTC06043G   0.052343       13,093,232           16,289         0.166667                    2,715
10. Covina Care Center                   ZZT05449H   0.035497        8,879,185           11,046         0.166667                    1,841
11. Crenshaw Convalescent Hospital       ZZT05525F   0.010174        2,544,964            3,166         0.666667                    2,111
12. Green Acres Lodge                    ZZT18146K   0.015509        3,879,336            4,826         0.166667                      804
13. Imperial Care Center                 ZZT05418G   0.028529        7,136,233            8,878         0.166667                    1,480
14. Imperial Crest Care Center           LTC55662G   0.021860        5,468,100            6,803         0.166667                    1,134
15. Intercommunity Healthcare            ZZT05457J   0.029443        7,364,998            9,163         0.166667                    1,527
16. Live Oak Rehab Center                ZZT06127H   0.027339        6,838,670            8,508         0.166667                    1,418
17. Longwood Manor Care Center           ZZT05753F   0.053988       13,504,720           16,801         0.666667                   11,201
18. Magnolia Gardens Convalescent Hosp ZZT05142G     0.024672        6,171,497            7,678         0.666667                    5,119
19. Monterey Care Center                 ZZT18634J   0.018809        4,704,789            5,853         0.166667                      976
20. Montrose Healthcare                  ZZT05135H   0.014494        3,625,458            4,510         0.166667                      752
21. Northridge Care Center               ZZT06224L   0.024384        6,099,443            7,588         0.166667                    1,265
22. Park Anaheim Healthcare              ZZT55035G   0.040377       10,100,024           12,565         0.166667                    2,094
23. Pico Rivera Healthcare               ZZT05170L   0.020274        5,071,378            6,309         0.166667                    1,052
24. San Gabriel Convalescent Center      LTC05181H   0.031738        7,938,960            9,877         0.166667                    1,646
25. Shea Rehab Subacute Center           ZZT05764H   0.041449       10,368,231           12,899         0.166667                    2,150
26. Sherman Oaks Rehab Center            ZZT06250I   0.034858        8,719,471           10,848         0.166667                    1,808
27. Sherman Village Care Center          ZZT06159M   0.038178        9,549,822           11,881         0.166667                    1,980
28. Studio City Convalescent Hospital    LTC55686F   0.046568       11,648,476           14,492         0.166667                    2,415
29. Sunnyview Convalescent Hospital      LTC55071G   0.019910        4,980,409            6,196         0.166667                    1,033
30. View Park Convalescent Hospital      LTC55065G   0.021552        5,390,930            6,707         0.666667                    4,471
31. West Hills Rehab Center              ZZT06133H   0.037225        9,311,548           11,584         0.166667                    1,931
32. Western Convalescent Hospital        ZZT06233I   0.041604       10,406,794           12,947         0.166667                    2,158
33. Total - Health Care Facilities                   1.000000     $250,141,518         $311,198                                 $81,079


     OTHER COMPONENTS                                              (Adj )
34. Mission Hospice                         N/A      0.321674       $7,905,671           $9,835         0.166667                   $1,639
35. California Villa of Van Nuys            N/A      0.133984        3,292,878            4,097         0.166667                      683
36. Crofton Manor                           N/A      0.092620        2,276,290            2,832         0.666667                    1,888
37. Huntington Retirement Hotel             N/A      0.172098        4,229,592            5,262         0.166667                      877
38. Pasadena Manor                          N/A      0.032361          795,324               989        0.666667                      660
39. San Dimas Retirement Center             N/A      0.143120        3,517,405            4,376         0.166667                      729
40. Woodland Hills Retirement               N/A      0.103060        2,532,870            3,151         0.666667                    2,101
41. Parkhurst Retirement Residential        N/A      0.001084           26,633                  33      0.250000                       8
42. Total - Other Components                         1.000000      $24,576,663          $30,575                                    $8,585

           GRAND TOTALS                                           $274,718,181         $341,773                                 $89,664
(To Sch 3)
STATE OF CALIFORNIA                                                                                                SCHEDULE 3.6

                                       NONCONCURRENT COST ALLOCATION - PLANT OPERATION



HOME OFFICE:                                                                                       FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                    FEBRUARY 29, 2008

                    PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                           Allocation Plant Operation Plant Operation Plant Operation
             FACILITY                             Ratio  Statistic Cost    Costs
                  1                     2           3           4            5               6               7
                                                            (Adj 32)                                       Non-
1.   Health Care Facilities                     0.910539  $250,141,518      $938,210       Ratio        Concurrent
2.   Other Components                                  0.089461     24,576,663           92,180        Non-             Cost
3.              TOTAL                                  1.000000   $274,718,181       $1,030,390     Concurrent       Allocation
                                                                                  (From Sch 5)


                    PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                  Allocation     Plant Operation       Ratio       Plant Operation
     CHAIN COMPONENTS                      MEDI-CAL     Ratio      Statistic:                          Non-
                                           NUMBER                 (Total Cost)                      Concurrent
                                                                    (Adj 37)                        (From Sch 4)
1. Alden Terrace Convalescent Hospital     ZZT06237F   0.045427    $11,363,262          $42,620      0.750000             $31,965
2. Alameda Care Center                     ZZT18404I   0.018265      4,568,763           17,136      0.166667                  2,856
3. Broadway Manor Care Center              ZZT05670J   0.019261      4,817,938           18,071      0.166667                  3,012
4. Burbank Rehab Health Center             ZZT06129I   0.049229     12,314,225           46,187      0.166667                  7,698
5. Burlington Convalescent Hospital        ZZT05666I   0.024357      6,092,763           22,852      0.666667              15,235
6. California Rehab Center                 ZZT06149I   0.059717     14,937,698           56,027      0.166667                  9,338
7. Casa Bonita Convalescent Hospital       LTC06291J   0.032813      8,207,953           30,786      0.166667                  5,131
8. Chino Valley Rehab Center               ZZT05126I   0.020158      5,042,248           18,912      0.166667                  3,152
9. Colonial Care Center                    LTC06043G   0.052343     13,093,232           49,109      0.166667                  8,185
10. Covina Care Center                     ZZT05449H   0.035497      8,879,185           33,303      0.166667                  5,551
11. Crenshaw Convalescent Hospital         ZZT05525F   0.010174      2,544,964            9,545      0.666667                  6,364
12. Green Acres Lodge                      ZZT18146K   0.015509      3,879,336           14,550      0.166667                  2,425
13. Imperial Care Center                   ZZT05418G   0.028529      7,136,233           26,766      0.166667                  4,461
14. Imperial Crest Care Center             LTC55662G   0.021860      5,468,100           20,509      0.166667                  3,418
15. Intercommunity Healthcare              ZZT05457J   0.029443      7,364,998           27,624      0.166667                  4,604
16. Live Oak Rehab Center                  ZZT06127H   0.027339      6,838,670           25,650      0.166667                  4,275
17. Longwood Manor Care Center             ZZT05753F   0.053988     13,504,720           50,652      0.666667              33,768
18. Magnolia Gardens Convalescent Hosp ZZT05142G       0.024672      6,171,497           23,148      0.666667              15,432
19. Monterey Care Center                   ZZT18634J   0.018809      4,704,789           17,646      0.166667                  2,941
20. Montrose Healthcare                    ZZT05135H   0.014494      3,625,458           13,598      0.166667                  2,266
21. Northridge Care Center                 ZZT06224L   0.024384      6,099,443           22,877      0.166667                  3,813
22. Park Anaheim Healthcare                ZZT55035G   0.040377     10,100,024           37,882      0.166667                  6,314
23. Pico Rivera Healthcare                 ZZT05170L   0.020274      5,071,378           19,021      0.166667                  3,170
24. San Gabriel Convalescent Center        LTC05181H   0.031738      7,938,960           29,777      0.166667                  4,963
25. Shea Rehab Subacute Center             ZZT05764H   0.041449     10,368,231           38,888      0.166667                  6,481
26. Sherman Oaks Rehab Center              ZZT06250I   0.034858      8,719,471           32,704      0.166667                  5,451
27. Sherman Village Care Center            ZZT06159M   0.038178      9,549,822           35,819      0.166667                  5,970
28. Studio City Convalescent Hospital      LTC55686F   0.046568     11,648,476           43,690      0.166667                  7,282
29. Sunnyview Convalescent Hospital        LTC55071G   0.019910      4,980,409           18,680      0.166667                  3,113
30. View Park Convalescent Hospital        LTC55065G   0.021552      5,390,930           20,220      0.666667              13,480
31. West Hills Rehab Center                ZZT06133H   0.037225      9,311,548           34,925      0.166667                  5,821
32. Western Convalescent Hospital          ZZT06233I   0.041604     10,406,794           39,033      0.166667                  6,505
33. Total - Health Care Facilities                     1.000000   $250,141,518         $938,210                          $244,439


     OTHER COMPONENTS                                                (Adj )
34. Mission Hospice                           N/A      0.321674     $7,905,671          $29,652      0.166667              $4,942
35. California Villa of Van Nuys              N/A      0.133984      3,292,878           12,351      0.166667                  2,058
36. Crofton Manor                             N/A      0.092620      2,276,290            8,538      0.666667                  5,692
37. Huntington Retirement Hotel               N/A      0.172098      4,229,592           15,864      0.166667                  2,644
38. Pasadena Manor                            N/A      0.032361        795,324            2,983      0.666667                  1,989
39. San Dimas Retirement Center               N/A      0.143120      3,517,405           13,193      0.166667                  2,199
40. Woodland Hills Retirement                 N/A      0.103060      2,532,870            9,500      0.666667                  6,333
41. Parkhurst Retirement Residential          N/A      0.001084         26,633              100      0.250000                    25
42. Total - Other Components                           1.000000    $24,576,663          $92,180                           $25,882

           GRAND TOTALS                                           $274,718,181       $1,030,390                          $270,321
(To Sch 3)
STATE OF CALIFORNIA                                                                                               SCHEDULE 3.7

                                     NONCONCURRENT COST ALLOCATION - SNF SUPPORT SERVICES



HOME OFFICE:                                                                                      FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                   FEBRUARY 29, 2008

                         PART I - ALLOCATION BETWEEN HEALTH CARE FACILITIES AND OTHER COMPONENTS
                                                              Allocation     SNF Support   SNF Support            SNF Support
             FACILITY                                Ratio   Statistic Cost     Costs        Services               Services
                  1                        2           3            4             5             6                      7
                                                                (Adj 30)                                             Non-
1.   Health Care Facilities                        0.910539    $250,141,518     $1,901,027    Ratio                Concurrent
2.   Other Components                                 0.089461      24,576,663                         Non-          Cost
3.              TOTAL                                 1.000000    $274,718,181      $1,901,027      Concurrent     Allocation
                                                                                 (From Sch 5)


                     PART II - ALLOCATION TO INDIVIDUAL CHAIN COMPONENTS
                                                                 Allocation      SNF Support          Ratio       SNF Support
     CHAIN COMPONENTS                     MEDI-CAL     Ratio      Statistic:      Services             Non-        Services
                                          NUMBER                 (Total Cost)                       Concurrent
                                                                   (Adj 35)                        (From Sch 4)
1. Alden Terrace Convalescent Hospital   ZZT06237F    0.045427     $11,363,262         $86,359       0.750000             $64,769
2. Alameda Care Center                    ZZT18404I   0.018265       4,568,763          34,722       0.166667               5,787
3. Broadway Manor Care Center             ZZT05670J   0.019261       4,817,938          36,615       0.166667               6,103
4. Burbank Rehab Health Center            ZZT06129I   0.049229      12,314,225          93,586       0.166667              15,598
5. Burlington Convalescent Hospital       ZZT05666I   0.024357       6,092,763          46,304       0.666667              30,869
6. California Rehab Center                ZZT06149I   0.059717      14,937,698         113,524       0.166667              18,921
7. Casa Bonita Convalescent Hospital     LTC06291J    0.032813       8,207,953          62,379       0.166667              10,396
8. Chino Valley Rehab Center              ZZT05126I   0.020158       5,042,248          38,320       0.166667               6,387
9. Colonial Care Center                  LTC06043G    0.052343      13,093,232          99,506       0.166667              16,584
10. Covina Care Center                   ZZT05449H    0.035497       8,879,185          67,480       0.166667              11,247
11. Crenshaw Convalescent Hospital       ZZT05525F    0.010174       2,544,964          19,341       0.666667              12,894
12. Green Acres Lodge                    ZZT18146K    0.015509       3,879,336          29,482       0.166667               4,914
13. Imperial Care Center                 ZZT05418G    0.028529       7,136,233          54,234       0.166667               9,039
14. Imperial Crest Care Center           LTC55662G    0.021860       5,468,100          41,556       0.166667               6,926
15. Intercommunity Healthcare             ZZT05457J   0.029443       7,364,998          55,973       0.166667               9,329
16. Live Oak Rehab Center                ZZT06127H    0.027339       6,838,670          51,973       0.166667               8,662
17. Longwood Manor Care Center           ZZT05753F    0.053988      13,504,720         102,633       0.666667              68,422
18. Magnolia Gardens Convalescent Hosp ZZT05142G      0.024672       6,171,497          46,902       0.666667              31,268
19. Monterey Care Center                  ZZT18634J   0.018809       4,704,789          35,755       0.166667               5,959
20. Montrose Healthcare                  ZZT05135H    0.014494       3,625,458          27,553       0.166667               4,592
21. Northridge Care Center               ZZT06224L    0.024384       6,099,443          46,355       0.166667               7,726
22. Park Anaheim Healthcare              ZZT55035G    0.040377      10,100,024          76,758       0.166667              12,793
23. Pico Rivera Healthcare               ZZT05170L    0.020274       5,071,378          38,541       0.166667               6,424
24. San Gabriel Convalescent Center      LTC05181H    0.031738       7,938,960          60,335       0.166667              10,056
25. Shea Rehab Subacute Center           ZZT05764H    0.041449      10,368,231          78,797       0.166667              13,133
26. Sherman Oaks Rehab Center             ZZT06250I   0.034858       8,719,471          66,266       0.166667              11,044
27. Sherman Village Care Center          ZZT06159M    0.038178       9,549,822          72,577       0.166667              12,096
28. Studio City Convalescent Hospital    LTC55686F    0.046568      11,648,476          88,526       0.166667              14,754
29. Sunnyview Convalescent Hospital      LTC55071G    0.019910       4,980,409          37,850       0.166667               6,308
30. View Park Convalescent Hospital      LTC55065G    0.021552       5,390,930          40,970       0.666667              27,313
31. West Hills Rehab Center              ZZT06133H    0.037225       9,311,548          70,766       0.166667              11,794
32. Western Convalescent Hospital         ZZT06233I   0.041604      10,406,794          79,090       0.166667              13,182
33. Total - Health Care Facilities                    1.000000    $250,141,518      $1,901,027                           $495,289


     OTHER COMPONENTS                                               (Adj )
34. Mission Hospice                          N/A      0.321674      $7,905,671               $0      0.166667                   $0
35. California Villa of Van Nuys             N/A      0.133984       3,292,878               $0      0.166667                   0
36. Crofton Manor                            N/A      0.092620       2,276,290               $0      0.666667                   0
37. Huntington Retirement Hotel              N/A      0.172098       4,229,592               $0      0.166667                   0
38. Pasadena Manor                           N/A      0.032361         795,324               $0      0.666667                   0
39. San Dimas Retirement Center              N/A      0.143120       3,517,405               $0      0.166667                   0
40. Woodland Hills Retirement                N/A      0.103060       2,532,870               $0      0.666667                   0
41. Parkhurst Retirement Residential         N/A      0.001084          26,633               $0      0.250000                   0
42. Total - Other Components                          1.000000     $24,576,663               $0                                 $0

           GRAND TOTALS                                           $274,718,181      $1,901,027                           $495,289
(To Sch 3)
STATE OF CALIFORNIA                                                                                                                    SCHEDULE 4

                                                      ALLOCATION RATIO - CONCURRENT AND NONCONCURRENT




HOME OFFICE:                                                                                                    FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                                 FEBRUARY 29, 2008



                                         MEDI-CAL FISCAL   DATE   CONCURRENT            NONCON-          TOTAL      RATIO             RATIO
          CHAIN COMPONENTS               NUMBER YEAR END ACQUIRED   MONTHS           CURRENT MONTHS     MONTHS CONCURRENT        NONCONCURRENT
                  1                         2        3      4         5                    6               7           8                 9
                                                                                                               (Col 5 / Col 7)     (Col 6 / Col 7)
                                                                                                                    (Adj 38)          (Adj 39)

 1.   Alden Terrace Convalescent Hospital ZZT06237F   05/31/07               3              9             12       0.250000          0.750000
 2.   Alameda Care Center                 ZZT18404I   12/31/07              10              2             12       0.833333          0.166667
 3.   Broadway Manor Care Center          ZZT05670J   12/31/07              10              2             12       0.833333          0.166667
 4.   Burbank Rehab Health Center         ZZT06129I   12/31/07              10              2             12       0.833333          0.166667
 5.   Burlington Convalescent Hospital    ZZT05666I   06/30/07               4              8             12       0.333333          0.666667
 6.   California Rehab Center             ZZT06149I   12/31/07              10              2             12       0.833333          0.166667
 7.   Casa Bonita Convalescent Hospital LTC06291J     12/31/07              10              2             12       0.833333          0.166667
 8.   Chino Valley Rehab Center           ZZT05126I   12/31/07              10              2             12       0.833333          0.166667
 9.   Colonial Care Center               LTC06043G    12/31/07              10              2             12       0.833333          0.166667
10.   Covina Care Center                 ZZT05449H    12/31/07              10              2             12       0.833333          0.166667
11.   Crenshaw Convalescent Hospital      ZZT05525F   06/30/07               4              8             12       0.333333          0.666667
12.   Green Acres Lodge                   ZZT18146K   12/31/07              10              2             12       0.833333          0.166667
13.   Imperial Care Center               ZZT05418G    12/31/07              10              2             12       0.833333          0.166667
14.   Imperial Crest Care Center         LTC55662G    12/31/07              10              2             12       0.833333          0.166667
15.   Intercommunity Healthcare           ZZT05457J   12/31/07              10              2             12       0.833333          0.166667
16.   Live Oak Rehab Center              ZZT06127H    12/31/07              10              2             12       0.833333          0.166667
17.   Longwood Manor Care Center          ZZT05753F   06/30/07              4               8             12       0.333333          0.666667
18.   Magnolia Gardens Convalescent HosZZT05142G      06/30/07               4              8             12       0.333333          0.666667
19.   Monterey Care Center                ZZT18634J   12/31/07              10              2             12       0.833333          0.166667
20.   Montrose Healthcare                ZZT05135H    12/31/07              10              2             12       0.833333          0.166667
21.   Northridge Care Center              ZZT06224L   12/31/07              10              2             12       0.833333          0.166667
22.   Park Anaheim Healthcare            ZZT55035G    12/31/07              10              2             12       0.833333          0.166667
23.   Pico Rivera Healthcare              ZZT05170L   12/31/07              10              2             12       0.833333          0.166667
24.   San Gabriel Convalescent Center    LTC05181H    12/31/07              10              2             12       0.833333          0.166667
25.   Shea Rehab Subacute Center         ZZT05764H    12/31/07              10              2             12       0.833333          0.166667
26.   Sherman Oaks Rehab Center           ZZT06250I   12/31/07              10              2             12       0.833333          0.166667
27.   Sherman Village Care Center        ZZT06159M    12/31/07              10              2             12       0.833333          0.166667
28.   Studio City Convalescent Hospital LTC55686F     12/31/07              10              2             12       0.833333          0.166667
29.   Sunnyview Convalescent Hospital LTC55071G       12/31/07              10              2             12       0.833333          0.166667
30.   View Park Convalescent Hospital    LTC55065G    06/30/07               4              8             12       0.333333          0.666667
31.   West Hills Rehab Center            ZZT06133H    12/31/07              10              2             12       0.833333          0.166667
32.   Western Convalescent Hospital       ZZT06233I   12/31/07              10              2             12       0.833333          0.166667

         OTHER COMPONENTS                                                                                           (Adj 38)          (Adj 39)
34.   Mission Hospice                      N/A        12/31/07              10              2             12       0.833333          0.166667
35.   California Villa of Van Nuys         N/A        12/31/07              10              2             12       0.833333          0.166667
36.   Crofton Manor                        N/A        06/30/07               4              8             12       0.333333          0.666667
37.   Huntington Retirement Hotel          N/A        12/31/07              10              2             12       0.833333          0.166667
38.   Pasadena Manor                       N/A        12/31/07              4               8             12       0.333333          0.666667
39.   San Dimas Retirement Center          N/A        06/30/07              10              2             12       0.833333          0.166667
40.   Woodland Hills Retirement            N/A        11/30/07              4               8             12       0.333333          0.666667
41.   Parkhurst Retirement Residential     N/A        06/30/07               9              3             12       0.750000          0.250000
STATE OF CALIFORNIA                                                                                                   SCHEDULE 5

                                                TOTAL AUDITED HOME OFFICE COSTS


HOME OFFICE:                                                                                 FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                              FEBRUARY 29, 2008

                                                REPORTED        COST       AUDITED           FUNCTIONAL                POOLED
                                               HOME OFFICE     AUDIT     HOME OFFICE         HOME OFFICE            HOME OFFICE
         ACCOUNT DESCRIPTION                     COSTS     ADJUSTMENTS TOTAL COSTS               COST                   COSTS
                   1                                2             3           4                   5                        6
                                                            (From Sch 6)  (Col 2 & Col 3)                         (Col 4 - Col 5)

 1      Old Cap. Rel Costs - Bldgs & Fix.          $79,800        ($79,800)          $0                 $0                     $0 *
 2      Old Cap Rel Costs Movable Equip.                 0               0            0                  0                      0
 4      New Capital Related Building & Fix.          1,338          28,398       29,736                  0                 29,736 *
 5      New Capital Related Movable Equip.          49,446         (24,456)      24,990                  0                 24,990 **
 6      Sub-Total (Lines 4 & 5)                   $130,584        ($75,858)     $54,726                 $0                $54,726

 11     Salaries of Officers                     $6,501,985    ($5,382,300)   $1,119,685                $0             $1,119,685
 12     Salaries & Wages of Others                1,344,898       (127,467)    1,217,431                 0              1,217,431
 13     Payroll Taxes                               476,652       (109,574)      367,078                 0                367,078
 14     Employee Benefits - Payroll Related         456,764        (83,009)      373,755                 0                373,755
 15     Employee Benefits - Non-Payroll Rel.         22,493        (14,301)        8,192                 0                  8,192
 16     Profit Sharing/Pension Plans                 32,287         (5,867)       26,420                 0                 26,420
 17     Legal Fees                                   72,703        (13,024)       59,679                 0                 59,679
 18     Auditing and Accounting Fees                 44,015        (13,250)       30,765                 0                 30,765
 19     Utilities                                         0         26,898        26,898                 0                 26,898
 20     Communications                               97,616              0        97,616                 0                 97,616
 22     Transportation                              156,684              0       156,684                 0                156,684
 23     Cleaning, Office & Admin. Supplies           37,079              0        37,079                 0                 37,079
 25     Repairs and Maintenance                      39,009              0        39,009                 0                 39,009
 26     Dues and Subscriptions                       10,299              0        10,299                 0                 10,299
 27     Contributions                                     0              0             0                 0                      0
 28     Insurance Premiums-Non-Cap Rel               58,378        (30,665)       27,713                 0                 27,713
 29     Taxes and Licenses-Non-Cap Rel               17,676         15,356        33,032                 0                 33,032
 30     Interest Expenses                           136,258              0       136,258                 0                136,258
 31     Copier Expense                              155,169              0       155,169                 0                155,169
 32     HVAC Expenses                               140,270              0       140,270                 0                140,270
 33     Professional Fees                           340,160              0       340,160                 0                340,160
 34     Administrative Expenses                     313,526         25,516       339,042                 0                339,042
 35     Seminars & Education                        951,252       (949,125)        2,127                 0                  2,127
35.01   QA Supervisors                            1,011,434       (139,152)      872,282           872,282     *                0
35.02   Dietary Supervisors                         341,773              0       341,773           341,773     **               0
35.03   Plant Operation Supervisor                1,046,315        (15,925)    1,030,390         1,030,390     ***              0
35.04   SNF Support Employees                     2,581,521       (680,494)    1,901,027         1,901,027     ****             0
 33     Sub-Total (Lines 11-32.02)              $16,386,216    ($7,496,383)   $8,889,833        $4,145,472             $4,744,361 ***

 37     Total Expenses (Lines 6 & 33)           $16,516,800    ($7,572,241)   $8,944,559        $4,145,472              $4,799,087
                                                                                        *(To Schs 2.4 & 3.4)     *(To Schs 2.2 & 3.2)
                                                                                       **(To Schs 2.5 & 3.5)     **(To Schs 2.1 & 3.1)
                                                                                      ***(To Schs 2.6 & 3.6)    ***(To Schs 2.3 & 3.3)
                                                                                     ****(To Schs 2.7 & 3.7)
STATE OF CALIFORNIA                                                                                                                                                     SCHEDULE 6



                                                                    AUDIT ADJUSTMENTS TO REPORTED HOME OFFICE COST
HOME OFFICE:                                                                                                                                                         FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                                                                                         FEBRUARY 29, 2008

                                                TOTAL ADJ        AUDIT        AUDIT        AUDIT        AUDIT        AUDIT         AUDIT        AUDIT        AUDIT        AUDIT        AUDIT
                                                                  ADJ          ADJ          ADJ          ADJ          ADJ           ADJ          ADJ          ADJ          ADJ          ADJ
                                                                   1            2            3            4            5             6            7            8            9           10

  1   Old Capital Related Bldg. & Fix.             ($79,800)   __________ __________     __________   __________   __________    __________   __________   __________   __________     (79,800)
  4   New Capital Related Costs Bldg and Fixt        28,398    __________ __________     __________   __________   __________    __________   __________   __________   __________   __________
  5   New Capital Related Movable Equip.            (24,456)   __________ __________     __________   __________   __________    __________   __________   __________   __________   __________
  6   Sub-Total (Lines 4 & 5)                      ($75,858)       0          0               0           0             0            0            0            0              0        (79,800)
                                                               __________ __________     __________   __________   __________    __________   __________   __________   __________   __________
 11 Salaries of Officers                        ($5,382,300)    621,000   __________       (3,300)    __________   (6,000,000)   __________   __________   __________   __________   __________
 12 Salaries of Office and Wages of Others         (127,467)              __________     __________   __________   __________    __________   __________   __________   __________   __________
 13 Payroll Taxes                                  (109,574)     28,697   __________     __________   __________     (92,270)    __________   __________   __________     (44,872)   __________
 14 Emp Bene-Payroll Related                        (83,009)     27,499   __________     __________   __________   __________    __________   __________   __________    (109,426)   __________
 15 Emp Bene-Non-Payroll Related                    (14,301)      1,354   __________     __________   __________   __________    __________   __________   __________   __________   __________
 16 Profit Sharing/Pension Plans                     (5,867)      1,944   __________     __________   __________   __________    __________   __________   __________      (7,735)   __________
 17 Legal Fees                                      (13,024)   __________ __________     __________   __________   __________    __________   __________   __________   __________   __________
 18 Auditing and Accounting Fees                    (13,250)   __________ __________     __________   __________   __________    __________   __________   __________   __________   __________
 19 Utilities                                        26,898
 20 Communications                                        0    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 22 Transportation                                        0    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 23 Cleaning, Office & Admin Supplies                     0    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 25 Repairs and Maintenance                               0    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 26 Dues and Supscriptions                                0    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 27 Contributions                                         0    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 28 Insurance Premiums-Non-Cap Rel                  (30,665)   __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 29 Taxes and Licenses-Non-Cap Rel                   15,356    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 30 Interest Expenses                                     0    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 31 Copier Expense                                        0    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 32 HVAC Expenses                                         0    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 33 Professional Fees                                     0    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
 34 Administrative Expenses                          25,516    __________   __________ __________     __________   __________      (1,013)    __________   __________   __________   __________
 35 Seminars & Education                           (949,125)   __________    (949,125) __________     __________   __________    __________                __________   __________   __________
35.01 QA Supervisors                               (139,152)   __________   __________ __________     __________   __________    __________    (123,433)     (15,719)   __________   __________
35.02 Dietary Supervisors                                 0    __________   __________ __________     __________   __________    __________   __________   __________   __________   __________
35.03 Plant Operation Supervisor                    (15,925)   __________   __________ __________       (15,925)   __________    __________   __________   __________   __________   __________
35.04 SNF Support Services                         (680,494)    (680,494)              __________     __________   __________    __________   __________   __________
 33 Sub-Total (Lines 11-32)                     ($7,496,383)       0         (949,125)   (3,300)        (15,925)   (6,092,270)     (1,013)     (123,433)     (15,719)    (162,033)      0
                                                               __________   __________ __________     __________   __________    __________   __________   __________   __________ __________
 37 Total Expenses (Lines 6 & 33)               ($7,572,241)       0         (949,125)   (3,300)        (15,925)   (6,092,270)     (1,013)     (123,433)     (15,719)    (162,033)   (79,800)
                                                (To Sch 5)
STATE OF CALIFORNIA                                                                                                                                                       SCHEDULE 6



                                                                     AUDIT ADJUSTMENTS TO REPORTED HOME OFFICE COST
HOME OFFICE:                                                                                                                                                          FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                                                                                          FEBRUARY 29, 2008

                                              AUDIT          AUDIT        AUDIT        AUDIT        AUDIT        AUDIT        AUDIT      AUDIT      AUDIT     AUDIT         AUDIT        AUDIT
                                               ADJ            ADJ          ADJ          ADJ          ADJ          ADJ          ADJ        ADJ        ADJ       ADJ           ADJ          ADJ
                                               11             12           13           14           15          16 - 18      19 - 21    22, 23      24        25            26           27

  1   Old Capital Related Bldg. & Fix.        __________   __________   __________                __________   __________   __________ __________ __________ __________   __________   __________
  4   New Capital Related Costs Bldg and Fixt __________   __________   __________   __________   __________   __________   __________ __________                         __________     28,398
  5   New Capital Related Movable Equip.      __________   __________   __________   __________   __________   __________              __________ __________ (24,456)     __________   __________
  6   Sub-Total (Lines 4 & 5)                       0           0            0            0           0            0             0         0          0        (24,456)        0         28,398
                                              __________   __________   __________   __________   __________   __________   __________ __________ __________ __________   __________   __________
 11 Salaries of Officers                      __________   __________   __________   __________   __________   __________   __________ __________ __________ __________   __________   __________
 12 Salaries of Office and Wages of Others      (24,432)   __________   __________   __________   __________   __________   __________ __________ (113,065) __________    __________     10,030
 13 Payroll Taxes                                (1,129)   __________   __________   __________   __________   __________   __________ __________ __________ __________   __________   __________
 14 Emp Bene-Payroll Related                     (1,082)   __________   __________   __________   __________   __________   __________ __________ __________ __________   __________   __________
 15 Emp Bene-Non-Payroll Related                   (27)      (4,612)    __________   __________   __________   __________   __________ (11,016) __________ __________     __________   __________
 16 Profit Sharing/Pension Plans                   (76)    __________   __________   __________                __________   __________ __________ __________ __________   __________   __________
 17 Legal Fees                                __________   __________     (4,741)      (2,638)      (5,645)                 __________ __________ __________ __________   __________   __________
 18 Auditing and Accounting Fees              __________   __________   __________   __________   __________    (13,250)    __________ __________ __________ __________   __________   __________
 19 Utilities                                                                                                               __________ __________ __________ __________   __________     26,898
 20 Communications                            __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
 22 Transportation                            __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
 23 Cleaning, Office & Admin Supplies         __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
 25 Repairs and Maintenance                   __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
 26 Dues and Supscriptions                    __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
 27 Contributions                             __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
 28 Insurance Premiums-Non-Cap Rel            __________   __________ __________     __________   __________   __________   __________ __________ __________ __________     (38,632)      7,967
 29 Taxes and Licenses-Non-Cap Rel            __________   __________ __________     __________   __________   __________     (1,425)  __________ __________ __________   __________     16,781
 30 Interest Expenses                         __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
 31 Copier Expense                            __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
 32 HVAC Expenses                             __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
 33 Professional Fees                         __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
 34 Administrative Expenses                   __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________     26,529
 35 Seminars & Education                      __________              __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
35.01 QA Supervisors                          __________              __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
35.02 Dietary Supervisors                     __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
35.03 Plant Operation Supervisor              __________   __________ __________     __________   __________   __________   __________ __________ __________ __________   __________   __________
35.04 SNF Support Services
 33 Sub-Total (Lines 11-32)                     (26,746)     (4,612)    (4,741)    (2,638)    (5,645)    (13,250)   (1,425)    (11,016)  (113,065)      0       (38,632)   88,205
                                              __________   __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________
 37 Total Expenses (Lines 6 & 33)               (26,746)     (4,612)    (4,741)    (2,638)    (5,645)    (13,250)   (1,425)    (11,016)  (113,065)   (24,456)   (38,632)  116,603
STATE OF CALIFORNIA                                                                                                                                                        SCHEDULE 6



                                                                 AUDIT ADJUSTMENTS TO REPORTED HOME OFFICE COST
HOME OFFICE:                                                                                                                                                            FISCAL PERIOD ENDED:
LONGWOOD MANAGEMENT CORPORATION                                                                                                                                            FEBRUARY 28, 2007

                                            AUDIT       AUDIT       AUDIT         AUDIT        AUDIT        AUDIT        AUDIT        AUDIT        AUDIT        AUDIT        AUDIT        AUDIT
                                             ADJ         ADJ         ADJ           ADJ          ADJ          ADJ          ADJ          ADJ          ADJ          ADJ          ADJ          ADJ


 1    Old Capital Related Bldg. & Fix.       __________ __________ __________   __________ __________ __________ __________ __________ __________ __________ __________ __________
 4    New Capital Related Costs Bldg and Fixt__________
 5    New Capital Related Movable Equip.     __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 6    Sub-Total (Lines 4 & 5)                    0          0          0            0            0            0            0            0            0            0            0            0
                                             __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 11 Salaries of Officers                     __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 12 Salaries of Office and Wages of Others __________ __________ __________     __________   __________   __________   __________   __________   __________   __________   __________   __________
 13 Payroll Taxes                            __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 14 Emp Bene-Payroll Related                 __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 15 Emp Bene-Non-Payroll Related             __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 16 Profit Sharing/Pension Plans             __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 17 Legal Fees                               __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 18 Auditing and Accounting Fees             __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 19 Utilities                                __________ __________ __________   __________   __________
 20 Communications                           __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 22 Transportation                           __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 23 Cleaning, Office & Admin Supplies        __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 25 Repairs and Maintenance                  __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 26 Dues and Supscriptions                   __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 27 Contributions                            __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 28 Insurance Premiums-Non-Cap Rel           __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 29 Taxes and Licenses-Non-Cap Rel           __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 30 Interest Expenses                        __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 31 Copier Expense                           __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 32 HVAC Expenses                            __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________
 33 Professional Fees                        __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 34 Administrative Expenses                  __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
 35 Seminars & Education                     __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
35.01 QA Supervisors                         __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
35.02 Dietary Supervisors                    __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
35.03 Plant Operation Supervisor             __________ __________ __________   __________   __________   __________   __________   __________   __________   __________   __________   __________
35.04 SNF Support Services
 33 Sub-Total (Lines 11-32)                      0          0          0            0          0          0          0          0          0          0          0          0
                                             __________ __________ __________   __________ __________ __________ __________ __________ __________ __________ __________ __________
 37 Total Expenses (Lines 6 & 33)                0          0          0            0          0          0          0          0          0          0          0          0
State of California                                                                                                                         Department of Health Care Services

Provider Name                                              Fiscal Period                                                                  Provider Number              Adjustments
LONGWOOD MANAGEMENT CORPORATION                            MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                        N/A                                  39
                    Report References
               Cost Report               Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                              As          Increase           As
No.      Exhibit      Line    Col.      Sch        Line                  Explanation of Audit Adjustments                                   Reported     (Decrease)       Adjusted
                                                                     RECLASSIFICATION OF REPORTED COSTS

 1         B          11       8         6         11.00   Salaries of Officers                                                             $6,501,985     $621,000    $7,122,985    *
           B          13       8         6         13.00   Payroll Taxes                                                                       476,652       28,697       505,349    *
           B          14       8         6         14.00   Employee Benefits - Payroll Related                                                 456,764       27,499       484,263    *
           B          15       8         6         15.00   Employee Benefits - Non-Payroll Related                                              22,493        1,354        23,847    *
           B          16       8         6         16.00   Profit Sharing / Pension Plans                                                       32,287        1,944        34,231    *
           B         35.04     7         6         35.04   SNF Support Employees                                                             2,581,521     (680,494)    1,901,027
                                                              To reclassify officers' salaries and benefits that should be allocated to
                                                              all Longwood facilities for proper cost determination.
                                                              42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304




                                                                   *Balance carried forward from prior/to subsequent adjustments                                             Page        1
State of California                                                                                                                        Department of Health Care Services

Provider Name                                              Fiscal Period                                                                 Provider Number                 Adjustments
LONGWOOD MANAGEMENT CORPORATION                            MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                       N/A                                     39
                    Report References
               Cost Report               Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                             As            Increase            As
No.      Exhibit      Line    Col.      Sch        Line                    Explanation of Audit Adjustments                                Reported       (Decrease)        Adjusted
                                                                        ADJUSTMENTS TO REPORTED COSTS

 2         B          35       8         6         35.00 Seminars and Education                                                                $951,252    ($949,125)       $2,127
                                                           To reconcile the reported expenses to agree with the provider's
                                                           general ledger.
                                                           42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304

 3         B          11       8         6         11.00 Salaries of Officers                                                        *     $7,122,985         ($3,300)   $7,119,685 *
                                                            To eliminate non-allowable salaries of officers not related to patient
                                                            care.
                                                            42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2102.3

 4         B         35.03     7         6         35.03 Plant Operation Supervisor                                                        $1,046,315        ($15,925)   $1,030,390
                                                            To adjust the reported salaries to agree with the Payroll Management
                                                            Report.
                                                            42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Section 2304

 5         B          11       8         6         11.00 Salaries of Officers                                                        *     $7,119,685     ($6,000,000)   $1,119,685
           B          13       8         6         13.00 Payroll Taxes                                                               *        505,349         (92,270)      413,079 *
                                                            To eliminate related party bonuses and benefits not necessary,
                                                            prudent, or proper.
                                                            42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2100 and 2103

 6         B          34       8         6         34.00 Administrative Expenses                                                               $313,526       ($1,013)    $312,513 *
                                                           To eliminate advertising expenses due to insufficient documentation.
                                                           42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304

 7         B         35.01     7         6         35.01 QA Supervisors                                                                    $1,011,434      ($123,433)     $888,001 *
                                                           To eliminate salaries and benefits of the case managers not related
                                                           to patient care.
                                                           42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2102.3




                                                                   *Balance carried forward from prior/to subsequent adjustments                                               Page     2
State of California                                                                                                                      Department of Health Care Services

Provider Name                                              Fiscal Period                                                               Provider Number                 Adjustments
LONGWOOD MANAGEMENT CORPORATION                            MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                     N/A                                    39
                    Report References
               Cost Report               Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                           As            Increase            As
No.      Exhibit      Line    Col.      Sch        Line                    Explanation of Audit Adjustments                              Reported       (Decrease)        Adjusted
                                                                        ADJUSTMENTS TO REPORTED COSTS

 8         B         35.01     7         6         35.01 QA Supervisors                                                            *         $888,001      ($15,719)    $872,282
                                                           To eliminate salaries and benefits of Quality Assurance Supervisors
                                                           not related to patient care.
                                                           42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2102.3

 9         B          13       8         6         13.00 Payroll Taxes                                                             *         $413,079      ($44,872)    $368,207 *
           B          14       8         6         14.00 Employee Benefits - Payroll Related                                       *          484,263      (109,426)     374,837 *
           B          16       8         6         16.00 Profit Sharing / Pension Plans                                            *           34,231        (7,735)      26,496 *
                                                            To eliminate employee benefits applicable to non-allowable salaries
                                                            that are not related to patient care.
                                                            42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2102.3

 10        B           1       8         6          1.00 Old Capital Related Costs - Buildings and Fixtures                                   $79,800      ($79,800)          $0
                                                            To eliminate related party rent expense.
                                                            42 CFR 413.17, 413.20 and 413.24 / CMS Pub. 15-1, Section 1011.5

 11        B          12       8         6         12.00   Salaries and Wages of Others                                                  $1,344,898        ($24,432)   $1,320,466 *
           B          13       8         6         13.00   Payroll Taxes                                                           *        368,207          (1,129)      367,078
           B          14       8         6         14.00   Employee Benefits - Payroll Related                                     *        374,837          (1,082)      373,755
           B          15       8         6         15.00   Employee Benefits - Non-Payroll Related                                 *         23,847             (27)       23,820 *
           B          16       8         6         16.00   Profit Sharing / Pension Plans                                          *         26,496             (76)       26,420
                                                              To eliminate salaries and benefits not related to patient care.
                                                              42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2102.3

 12        B          15       8         6         15.00 Employee Benefits - Non-Payroll Related                                   *          $23,820       ($4,612)     $19,208 *
                                                           To eliminate marketing expenses reported as employee benefits not
                                                           related to patient care.
                                                           42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2102.3




                                                                   *Balance carried forward from prior/to subsequent adjustments                                             Page     3
State of California                                                                                                                       Department of Health Care Services

Provider Name                                             Fiscal Period                                                                 Provider Number                Adjustments
LONGWOOD MANAGEMENT CORPORATION                           MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                       N/A                                   39
                    Report References
               Cost Report               Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                            As           Increase           As
No.      Exhibit      Line    Col.      Sch        Line                   Explanation of Audit Adjustments                                Reported      (Decrease)       Adjusted
                                                                       ADJUSTMENTS TO REPORTED COSTS

           B          17       8         6         17.00 Legal Fees                                                                           $72,703

 13                                                          To eliminate legal expenses due to insufficient documentation.                                 ($4,741)
                                                             42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304

 14                                                          To eliminate Elderlink legal expenses incurred as a result of the                               (2,638)
                                                             provider's efforts to increase patient utilization.
                                                             42 CFR 413.9(b)(2) / CMS Pub. 15-1, Sections 2102.3 and 2136.2

 15                                                          To eliminate legal expenses for DARTL partnership study not related to                          (5,645)
                                                             patient care.                                                                                 ($13,024)     $59,679
                                                             42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2102.3

           B          18       8         6         18.00 Auditing and Accounting Fees                                                         $44,015

 16                                                          To eliminate Primecare audit expenses not related to patient care.                             ($4,000)
                                                             42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2102.3

 17                                                          To eliminate accounting fees due to insufficient documentation.                                 (8,750)
                                                             42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304

 18                                                          To eliminate Ability Extended Care expenses not related to patient care.                          (500)
                                                             42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2102.3                                            ($13,250)     $30,765

           B          29       8         6         29.00 Taxes and Licenses - Non-Capital Related                                             $17,676

 19                                                          To eliminate vehicle license expenses due to insufficient documentation.                        ($932)
                                                             42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304

 20                                                          To eliminate vehicle license expenses due to insufficient documentation.                          (357)
                                                             42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304

 21                                                          To eliminate vehicle license fees not related to patient care.                                    (136)
                                                             42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2102.3                                             ($1,425)     $16,251 *

                                                                  *Balance carried forward from prior/to subsequent adjustments                                             Page     4
State of California                                                                                                                            Department of Health Care Services

Provider Name                                              Fiscal Period                                                                     Provider Number                  Adjustments
LONGWOOD MANAGEMENT CORPORATION                            MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                           N/A                                      39
                    Report References
               Cost Report               Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                                 As             Increase            As
No.      Exhibit      Line    Col.      Sch        Line                    Explanation of Audit Adjustments                                    Reported        (Decrease)        Adjusted
                                                                        ADJUSTMENTS TO REPORTED COSTS

           B          15       8         6         15.00 Employee Benefits - Non-Payroll Related                                        *           $19,208

 22                                                           To eliminate employee benefits expenses due to insufficient                                         ($10,740)
                                                              documentation.
                                                              42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304

 23                                                           To eliminate alcoholic beverages, gifts, and lobbying expenses                                          (276)
                                                              reported as employee benefits not related to patient care.                                          ($11,016)      $8,192
                                                              42 CFR 413.9(c)(3) / CMS Pub. 15-1, Section 2102.3

 24        B          12       8         6         12.00 Salaries and Wages of Others                                               *          $1,320,466       ($113,065)    $1,207,401 *
                                                            To eliminate auto allowance expenses due to insufficient documentation.
                                                            42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304

 25        B           5       8         6          5.00 New Capital Related Costs - Movable Equipment                                              $49,446       ($24,456)     $24,990
                                                           To adjust depreciation expenses due to insufficient documentation.
                                                           42 CFR 413.20, 413.24 and 413.134
                                                           CMS Pub.15-1, Sections 102 and 2304

 26        B          28       8         6         28.00 Insurance Premiums - Non-Capital Related                                                   $58,378       ($38,632)     $19,746 *
                                                            To eliminate insurance expenses due to insufficient documentation.
                                                            42 CFR 413.20 and 413.24
                                                            CMS Pub.15-1, Sections 102, 2300 and 2304

 27        B           4       8         6          4.00   New Capital Related Costs - Building and Fixtures                                          $1,338      $28,398        $29,736
           B          12       8         6         12.00   Salaries and Wages of Others                                                  *         1,207,401       10,030      1,217,431
           B          19       8         6         19.00   Utilities                                                                                       0       26,898         26,898
           B          28       8         6         28.00   Insurance Premiums - Non-Capital Related                                      *            19,746        7,967         27,713
           B          29       8         6         29.00   Taxes and Licenses - Non-Capital Related                                      *            16,251       16,781         33,032
           B          34       8         6         34.00   Administrative Expenses                                                       *           312,513       26,529        339,042
                                                               To include the cost of ownership in lieu of related party lease expenses.
                                                               42 CFR 413.17, 413.20 and 413.24 / CMS Pub. 15-1, Section 1011.5




                                                                   *Balance carried forward from prior/to subsequent adjustments                                                    Page     5
State of California                                                                                                                          Department of Health Care Services

Provider Name                                                 Fiscal Period                                                                Provider Number             Adjustments
LONGWOOD MANAGEMENT CORPORATION                               MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                      N/A                                  39
                     Report References
                Cost Report                 Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                               As          Increase           As
No.      Exhibit      Line     Col.       Sch          Line                  Explanation of Audit Adjustments                                Reported     (Decrease)       Adjusted
                                                                        ADJUSTMENTS TO REPORTED STATISTICS

 28     G, Part I       1       1     2.1, 2.2, 2.3   1.00    Health Care Facilities (Total Cost)                                           250,210,200       (68,682) 250,141,518
        G, Part I       4       1     2.1, 2.2, 2.3   3.00    Total                                                                         274,786,863       (68,682) 274,718,181
                                                                 To adjust the reported allocation statistics to agree with the reported
                                                                 total cost of the facilities.
                                                                 42 CFR 413.20 and 413.24
                                                                 CMS Pub. 15-1, Sections 2150.3D, 2205, 2300 and 2304

 29     G, Part I       1       1     2.4, 2.5, 2.6   1.00    Health Care Facilities (Total Cost)                                           250,210,200       (68,682) 250,141,518
        G, Part I       4       1     2.4, 2.5, 2.6   3.00    Total                                                                         274,786,863       (68,682) 274,718,181
                                                                 To adjust the reported allocation statistics to agree with the reported
                                                                 total cost of the facilities.
                                                                 42 CFR 413.20 and 413.24
                                                                 CMS Pub. 15-1, Sections 2150.3D, 2205, 2300 and 2304

 30     G, Part I       1       1        2.7, 3.7     1.00    Health Care Facilities (Total Cost)                                           250,210,200       (68,682) 250,141,518
        G, Part I       4       1        2.7, 3.7     3.00    Total                                                                         274,786,863       (68,682) 274,718,181
                                                                 To adjust the reported allocation statistics to agree with the reported
                                                                 total cost of the facilities.
                                                                 42 CFR 413.20 and 413.24
                                                                 CMS Pub. 15-1, Sections 2150.3D, 2205, 2300 and 2304

 31     G, Part I       1       1     3.1, 3.2, 3.3   1.00    Health Care Facilities (Total Cost)                                           250,210,200       (68,682) 250,141,518
        G, Part I       4       1     3.1, 3.2, 3.3   3.00    Total                                                                         274,786,863       (68,682) 274,718,181
                                                                 To adjust the reported allocation statistics to agree with the reported
                                                                 total cost of the facilities.
                                                                 42 CFR 413.20 and 413.24
                                                                 CMS Pub. 15-1, Sections 2150.3D, 2205, 2300 and 2304




                                                                                                                                                                              Page    6
State of California                                                                                                                          Department of Health Care Services

Provider Name                                                 Fiscal Period                                                                Provider Number             Adjustments
LONGWOOD MANAGEMENT CORPORATION                               MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                      N/A                                  39
                     Report References
                Cost Report                 Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                               As          Increase           As
No.      Exhibit      Line     Col.       Sch          Line                  Explanation of Audit Adjustments                                Reported     (Decrease)       Adjusted
                                                                        ADJUSTMENTS TO REPORTED STATISTICS

 32     G, Part I       1       1     3.4, 3.5, 3.6   1.00    Health Care Facilities (Total Cost)                                           250,210,200       (68,682) 250,141,518
        G, Part I       4       1     3.4, 3.5, 3.6   3.00    Total                                                                         274,786,863       (68,682) 274,718,181
                                                                 To adjust the reported allocation statistics to agree with the reported
                                                                 total cost of the facilities.
                                                                 42 CFR 413.20 and 413.24
                                                                 CMS Pub. 15-1, Sections 2150.3D, 2205, 2300 and 2304




                                                                                                                                                                              Page    7
State of California                                                                                                                           Department of Health Care Services

Provider Name                                                 Fiscal Period                                                                 Provider Number             Adjustments
LONGWOOD MANAGEMENT CORPORATION                               MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                       N/A                                  39
                     Report References
                Cost Report                 Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                                As          Increase           As
No.      Exhibit      Line     Col.       Sch         Line                   Explanation of Audit Adjustments                                 Reported     (Decrease)       Adjusted
                                                                        ADJUSTMENTS TO REPORTED STATISTICS

 33     G, Part II    1.01      1     2.1, 2.2, 2.3    2.00   Alameda Care Center (Total Cost)                                                 4,570,065        (1,302)   4,568,763
        G, Part II    1.03      1     2.1, 2.2, 2.3    4.00   Burbank Rehab Health Center                                                     12,329,967       (15,742) 12,314,225
        G, Part II    1.05      1     2.1, 2.2, 2.3    6.00   California Rehab Center                                                         14,938,499          (801) 14,937,698
        G, Part II    1.07      1     2.1, 2.2, 2.3    8.00   Chino Valley Rehab Center                                                        5,054,840       (12,592)   5,042,248
        G, Part II    1.08      1     2.1, 2.2, 2.3    9.00   Colonial Sub-Acute and Care Center                                              13,094,032          (800) 13,093,232
        G, Part II    1.09      1     2.1, 2.2, 2.3   10.00   Covina Sub-Acute and Care Center                                                 8,879,989          (804)   8,879,185
        G, Part II    1.10      1     2.1, 2.2, 2.3   11.00   Crenshaw Convalescent Hospital                                                   2,545,764          (800)   2,544,964
        G, Part II    1.11      1     2.1, 2.2, 2.3   12.00   Green Acres Lodge                                                                3,888,941        (9,605)   3,879,336
        G, Part II    1.12      1     2.1, 2.2, 2.3   13.00   Imperial Care Center                                                             7,144,437        (8,204)   7,136,233
        G, Part II    1.13      1     2.1, 2.2, 2.3   14.00   Imperial Crest Care Center                                                       5,480,691       (12,591)   5,468,100
        G, Part II    1.14      1     2.1, 2.2, 2.3   15.00   Intercommunity Sub-Acute and Care                                                7,380,948       (15,950)   7,364,998
        G, Part II    1.16      1     2.1, 2.2, 2.3   17.00   Longwood Manor Sub-Acute                                                        13,480,913        23,807 13,504,720
        G, Part II    1.17      1     2.1, 2.2, 2.3   18.00   Magnolia Gardens Convalescent Hospital                                           6,159,930        11,567    6,171,497
        G, Part II    1.19      1     2.1, 2.2, 2.3   20.00   Montrose Healthcare                                                              3,627,520        (2,062)   3,625,458
        G, Part II    1.21      1     2.1, 2.2, 2.3   22.00   Park Anaheim Sub-Acute Healthcare                                               10,112,614       (12,590) 10,100,024
        G, Part II    1.22      1     2.1, 2.2, 2.3   23.00   Pico Rivera Healthcare                                                           5,078,680        (7,302)   5,071,378
        G, Part II    1.24      1     2.1, 2.2, 2.3   25.00   Shea Rehab and Sub-Acute Center                                                 10,366,136         2,095 10,368,231
        G, Part II    1.25      1     2.1, 2.2, 2.3   26.00   Sherman Oaks Rehab Center                                                        8,720,273          (802)   8,719,471
        G, Part II    1.26      1     2.1, 2.2, 2.3   27.00   Sherman Village Care Center                                                      9,562,411       (12,589)   9,549,822
        G, Part II    1.27      1     2.1, 2.2, 2.3   28.00   Studio City Convalescent Hospital                                               11,649,273          (797) 11,648,476
        G, Part II    1.29      1     2.1, 2.2, 2.3   30.00   View Park Convalescent Hospital                                                  5,370,730        20,200    5,390,930
        G, Part II    1.30      1     2.1, 2.2, 2.3   31.00   West Hills Rehab Center                                                          9,321,767       (10,219)   9,311,548
        G, Part II    1.31      1     2.1, 2.2, 2.3   32.00   Western Sub-Acute and Convalescent Hospital                                     10,407,593          (799) 10,406,794
        G, Part II     18       1     2.1, 2.2, 2.3   33.00   Total - Health Care Facilities                                                 250,210,200       (68,682) 250,141,518
                                                                  To adjust the reported allocation statistics to agree with the reported
                                                                  total cost of the facilities.
                                                                  42 CFR 413.20 and 413.24
                                                                  CMS Pub. 15-1, Sections 2150.3D, 2205, 2300 and 2304




                                                                                                                                                                               Page    8
State of California                                                                                                                           Department of Health Care Services

Provider Name                                                 Fiscal Period                                                                 Provider Number             Adjustments
LONGWOOD MANAGEMENT CORPORATION                               MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                       N/A                                  39
                     Report References
                Cost Report                 Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                                As          Increase           As
No.      Exhibit      Line     Col.       Sch         Line                   Explanation of Audit Adjustments                                 Reported     (Decrease)       Adjusted
                                                                        ADJUSTMENTS TO REPORTED STATISTICS

 34     G, Part II    1.01      1     2.4, 2.5, 2.6    2.00   Alameda Care Center (Total Cost)                                                 4,570,065        (1,302)   4,568,763
        G, Part II    1.03      1     2.4, 2.5, 2.6    4.00   Burbank Rehab Health Center                                                     12,329,967       (15,742) 12,314,225
        G, Part II    1.05      1     2.4, 2.5, 2.6    6.00   California Rehab Center                                                         14,938,499          (801) 14,937,698
        G, Part II    1.07      1     2.4, 2.5, 2.6    8.00   Chino Valley Rehab Center                                                        5,054,840       (12,592)   5,042,248
        G, Part II    1.08      1     2.4, 2.5, 2.6    9.00   Colonial Sub-Acute and Care Center                                              13,094,032          (800) 13,093,232
        G, Part II    1.09      1     2.4, 2.5, 2.6   10.00   Covina Sub-Acute and Care Center                                                 8,879,989          (804)   8,879,185
        G, Part II    1.10      1     2.4, 2.5, 2.6   11.00   Crenshaw Convalescent Hospital                                                   2,545,764          (800)   2,544,964
        G, Part II    1.11      1     2.4, 2.5, 2.6   12.00   Green Acres Lodge                                                                3,888,941        (9,605)   3,879,336
        G, Part II    1.12      1     2.4, 2.5, 2.6   13.00   Imperial Care Center                                                             7,144,437        (8,204)   7,136,233
        G, Part II    1.13      1     2.4, 2.5, 2.6   14.00   Imperial Crest Care Center                                                       5,480,691       (12,591)   5,468,100
        G, Part II    1.14      1     2.4, 2.5, 2.6   15.00   Intercommunity Sub-Acute and Care                                                7,380,948       (15,950)   7,364,998
        G, Part II    1.16      1     2.4, 2.5, 2.6   17.00   Longwood Manor Sub-Acute                                                        13,480,913        23,807 13,504,720
        G, Part II    1.17      1     2.4, 2.5, 2.6   18.00   Magnolia Gardens Convalescent Hospital                                           6,159,930        11,567    6,171,497
        G, Part II    1.19      1     2.4, 2.5, 2.6   20.00   Montrose Healthcare                                                              3,627,520        (2,062)   3,625,458
        G, Part II    1.21      1     2.4, 2.5, 2.6   22.00   Park Anaheim Sub-Acute Healthcare                                               10,112,614       (12,590) 10,100,024
        G, Part II    1.22      1     2.4, 2.5, 2.6   23.00   Pico Rivera Healthcare                                                           5,078,680        (7,302)   5,071,378
        G, Part II    1.24      1     2.4, 2.5, 2.6   25.00   Shea Rehab and Sub-Acute Center                                                 10,366,136         2,095 10,368,231
        G, Part II    1.25      1     2.4, 2.5, 2.6   26.00   Sherman Oaks Rehab Center                                                        8,720,273          (802)   8,719,471
        G, Part II    1.26      1     2.4, 2.5, 2.6   27.00   Sherman Village Care Center                                                      9,562,411       (12,589)   9,549,822
        G, Part II    1.27      1     2.4, 2.5, 2.6   28.00   Studio City Convalescent Hospital                                               11,649,273          (797) 11,648,476
        G, Part II    1.29      1     2.4, 2.5, 2.6   30.00   View Park Convalescent Hospital                                                  5,370,730        20,200    5,390,930
        G, Part II    1.30      1     2.4, 2.5, 2.6   31.00   West Hills Rehab Center                                                          9,321,767       (10,219)   9,311,548
        G, Part II    1.31      1     2.4, 2.5, 2.6   32.00   Western Sub-Acute and Convalescent Hospital                                     10,407,593          (799) 10,406,794
        G, Part II     18       1     2.4, 2.5, 2.6   33.00   Total - Health Care Facilities                                                 250,210,200       (68,682) 250,141,518
                                                                  To adjust the reported allocation statistics to agree with the reported
                                                                  total cost of the facilities.
                                                                  42 CFR 413.20 and 413.24
                                                                  CMS Pub. 15-1, Sections 2150.3D, 2205, 2300 and 2304




                                                                                                                                                                               Page    9
State of California                                                                                                                           Department of Health Care Services

Provider Name                                                 Fiscal Period                                                                 Provider Number             Adjustments
LONGWOOD MANAGEMENT CORPORATION                               MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                       N/A                                  39
                     Report References
                Cost Report                 Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                                As          Increase           As
No.      Exhibit      Line     Col.       Sch         Line                   Explanation of Audit Adjustments                                 Reported     (Decrease)       Adjusted
                                                                        ADJUSTMENTS TO REPORTED STATISTICS

 35     G, Part II    1.01      1        2.7, 3.7      2.00   Alameda Care Center (Total Cost)                                                 4,570,065        (1,302)   4,568,763
        G, Part II    1.03      1        2.7, 3.7      4.00   Burbank Rehab Health Center                                                     12,329,967       (15,742) 12,314,225
        G, Part II    1.05      1        2.7, 3.7      6.00   California Rehab Center                                                         14,938,499          (801) 14,937,698
        G, Part II    1.07      1        2.7, 3.7      8.00   Chino Valley Rehab Center                                                        5,054,840       (12,592)   5,042,248
        G, Part II    1.08      1        2.7, 3.7      9.00   Colonial Sub-Acute and Care Center                                              13,094,032          (800) 13,093,232
        G, Part II    1.09      1        2.7, 3.7     10.00   Covina Sub-Acute and Care Center                                                 8,879,989          (804)   8,879,185
        G, Part II    1.10      1        2.7, 3.7     11.00   Crenshaw Convalescent Hospital                                                   2,545,764          (800)   2,544,964
        G, Part II    1.11      1        2.7, 3.7     12.00   Green Acres Lodge                                                                3,888,941        (9,605)   3,879,336
        G, Part II    1.12      1        2.7, 3.7     13.00   Imperial Care Center                                                             7,144,437        (8,204)   7,136,233
        G, Part II    1.13      1        2.7, 3.7     14.00   Imperial Crest Care Center                                                       5,480,691       (12,591)   5,468,100
        G, Part II    1.14      1        2.7, 3.7     15.00   Intercommunity Sub-Acute and Care                                                7,380,948       (15,950)   7,364,998
        G, Part II    1.16      1        2.7, 3.7     17.00   Longwood Manor Sub-Acute                                                        13,480,913        23,807 13,504,720
        G, Part II    1.17      1        2.7, 3.7     18.00   Magnolia Gardens Convalescent Hospital                                           6,159,930        11,567    6,171,497
        G, Part II    1.19      1        2.7, 3.7     20.00   Montrose Healthcare                                                              3,627,520        (2,062)   3,625,458
        G, Part II    1.21      1        2.7, 3.7     22.00   Park Anaheim Sub-Acute Healthcare                                               10,112,614       (12,590) 10,100,024
        G, Part II    1.22      1        2.7, 3.7     23.00   Pico Rivera Healthcare                                                           5,078,680        (7,302)   5,071,378
        G, Part II    1.24      1        2.7, 3.7     25.00   Shea Rehab and Sub-Acute Center                                                 10,366,136         2,095 10,368,231
        G, Part II    1.25      1        2.7, 3.7     26.00   Sherman Oaks Rehab Center                                                        8,720,273          (802)   8,719,471
        G, Part II    1.26      1        2.7, 3.7     27.00   Sherman Village Care Center                                                      9,562,411       (12,589)   9,549,822
        G, Part II    1.27      1        2.7, 3.7     28.00   Studio City Convalescent Hospital                                               11,649,273          (797) 11,648,476
        G, Part II    1.29      1        2.7, 3.7     30.00   View Park Convalescent Hospital                                                  5,370,730        20,200    5,390,930
        G, Part II    1.30      1        2.7, 3.7     31.00   West Hills Rehab Center                                                          9,321,767       (10,219)   9,311,548
        G, Part II    1.31      1        2.7, 3.7     32.00   Western Sub-Acute and Convalescent Hospital                                     10,407,593          (799) 10,406,794
        G, Part II     18       1        2.7, 3.7     33.00   Total - Health Care Facilities                                                 250,210,200       (68,682) 250,141,518
                                                                  To adjust the reported allocation statistics to agree with the reported
                                                                  total cost of the facilities.
                                                                  42 CFR 413.20 and 413.24
                                                                  CMS Pub. 15-1, Sections 2150.3D, 2205, 2300 and 2304




                                                                                                                                                                               Page 10
State of California                                                                                                                           Department of Health Care Services

Provider Name                                                 Fiscal Period                                                                 Provider Number             Adjustments
LONGWOOD MANAGEMENT CORPORATION                               MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                       N/A                                  39
                     Report References
                Cost Report                 Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                                As          Increase           As
No.      Exhibit      Line     Col.       Sch         Line                   Explanation of Audit Adjustments                                 Reported     (Decrease)       Adjusted
                                                                        ADJUSTMENTS TO REPORTED STATISTICS

 36     G, Part II    1.01      1     3.1, 3.2, 3.3    2.00   Alameda Care Center (Total Cost)                                                 4,570,065        (1,302)   4,568,763
        G, Part II    1.03      1     3.1, 3.2, 3.3    4.00   Burbank Rehab Health Center                                                     12,329,967       (15,742) 12,314,225
        G, Part II    1.05      1     3.1, 3.2, 3.3    6.00   California Rehab Center                                                         14,938,499          (801) 14,937,698
        G, Part II    1.07      1     3.1, 3.2, 3.3    8.00   Chino Valley Rehab Center                                                        5,054,840       (12,592)   5,042,248
        G, Part II    1.08      1     3.1, 3.2, 3.3    9.00   Colonial Sub-Acute and Care Center                                              13,094,032          (800) 13,093,232
        G, Part II    1.09      1     3.1, 3.2, 3.3   10.00   Covina Sub-Acute and Care Center                                                 8,879,989          (804)   8,879,185
        G, Part II    1.10      1     3.1, 3.2, 3.3   11.00   Crenshaw Convalescent Hospital                                                   2,545,764          (800)   2,544,964
        G, Part II    1.11      1     3.1, 3.2, 3.3   12.00   Green Acres Lodge                                                                3,888,941        (9,605)   3,879,336
        G, Part II    1.12      1     3.1, 3.2, 3.3   13.00   Imperial Care Center                                                             7,144,437        (8,204)   7,136,233
        G, Part II    1.13      1     3.1, 3.2, 3.3   14.00   Imperial Crest Care Center                                                       5,480,691       (12,591)   5,468,100
        G, Part II    1.14      1     3.1, 3.2, 3.3   15.00   Intercommunity Sub-Acute and Care                                                7,380,948       (15,950)   7,364,998
        G, Part II    1.16      1     3.1, 3.2, 3.3   17.00   Longwood Manor Sub-Acute                                                        13,480,913        23,807 13,504,720
        G, Part II    1.17      1     3.1, 3.2, 3.3   18.00   Magnolia Gardens Convalescent Hospital                                           6,159,930        11,567    6,171,497
        G, Part II    1.19      1     3.1, 3.2, 3.3   20.00   Montrose Healthcare                                                              3,627,520        (2,062)   3,625,458
        G, Part II    1.21      1     3.1, 3.2, 3.3   22.00   Park Anaheim Sub-Acute Healthcare                                               10,112,614       (12,590) 10,100,024
        G, Part II    1.22      1     3.1, 3.2, 3.3   23.00   Pico Rivera Healthcare                                                           5,078,680        (7,302)   5,071,378
        G, Part II    1.24      1     3.1, 3.2, 3.3   25.00   Shea Rehab and Sub-Acute Center                                                 10,366,136         2,095 10,368,231
        G, Part II    1.25      1     3.1, 3.2, 3.3   26.00   Sherman Oaks Rehab Center                                                        8,720,273          (802)   8,719,471
        G, Part II    1.26      1     3.1, 3.2, 3.3   27.00   Sherman Village Care Center                                                      9,562,411       (12,589)   9,549,822
        G, Part II    1.27      1     3.1, 3.2, 3.3   28.00   Studio City Convalescent Hospital                                               11,649,273          (797) 11,648,476
        G, Part II    1.29      1     3.1, 3.2, 3.3   30.00   View Park Convalescent Hospital                                                  5,370,730        20,200    5,390,930
        G, Part II    1.30      1     3.1, 3.2, 3.3   31.00   West Hills Rehab Center                                                          9,321,767       (10,219)   9,311,548
        G, Part II    1.31      1     3.1, 3.2, 3.3   32.00   Western Sub-Acute and Convalescent Hospital                                     10,407,593          (799) 10,406,794
        G, Part II     18       1     3.1, 3.2, 3.3   33.00   Total - Health Care Facilities                                                 250,210,200       (68,682) 250,141,518
                                                                  To adjust the reported allocation statistics to agree with the reported
                                                                  total cost of the facilities.
                                                                  42 CFR 413.20 and 413.24
                                                                  CMS Pub. 15-1, Sections 2150.3D, 2205, 2300 and 2304




                                                                                                                                                                               Page 11
State of California                                                                                                                           Department of Health Care Services

Provider Name                                                 Fiscal Period                                                                 Provider Number             Adjustments
LONGWOOD MANAGEMENT CORPORATION                               MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                                       N/A                                  39
                     Report References
                Cost Report                 Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                                                As          Increase           As
No.      Exhibit      Line     Col.       Sch         Line                   Explanation of Audit Adjustments                                 Reported     (Decrease)       Adjusted
                                                                        ADJUSTMENTS TO REPORTED STATISTICS

 37     G, Part II    1.01      1     3.4, 3.5, 3.6    2.00   Alameda Care Center (Total Cost)                                                 4,570,065        (1,302)   4,568,763
        G, Part II    1.03      1     3.4, 3.5, 3.6    4.00   Burbank Rehab Health Center                                                     12,329,967       (15,742) 12,314,225
        G, Part II    1.05      1     3.4, 3.5, 3.6    6.00   California Rehab Center                                                         14,938,499          (801) 14,937,698
        G, Part II    1.07      1     3.4, 3.5, 3.6    8.00   Chino Valley Rehab Center                                                        5,054,840       (12,592)   5,042,248
        G, Part II    1.08      1     3.4, 3.5, 3.6    9.00   Colonial Sub-Acute and Care Center                                              13,094,032          (800) 13,093,232
        G, Part II    1.09      1     3.4, 3.5, 3.6   10.00   Covina Sub-Acute and Care Center                                                 8,879,989          (804)   8,879,185
        G, Part II    1.10      1     3.4, 3.5, 3.6   11.00   Crenshaw Convalescent Hospital                                                   2,545,764          (800)   2,544,964
        G, Part II    1.11      1     3.4, 3.5, 3.6   12.00   Green Acres Lodge                                                                3,888,941        (9,605)   3,879,336
        G, Part II    1.12      1     3.4, 3.5, 3.6   13.00   Imperial Care Center                                                             7,144,437        (8,204)   7,136,233
        G, Part II    1.13      1     3.4, 3.5, 3.6   14.00   Imperial Crest Care Center                                                       5,480,691       (12,591)   5,468,100
        G, Part II    1.14      1     3.4, 3.5, 3.6   15.00   Intercommunity Sub-Acute and Care                                                7,380,948       (15,950)   7,364,998
        G, Part II    1.16      1     3.4, 3.5, 3.6   17.00   Longwood Manor Sub-Acute                                                        13,480,913        23,807 13,504,720
        G, Part II    1.17      1     3.4, 3.5, 3.6   18.00   Magnolia Gardens Convalescent Hospital                                           6,159,930        11,567    6,171,497
        G, Part II    1.19      1     3.4, 3.5, 3.6   20.00   Montrose Healthcare                                                              3,627,520        (2,062)   3,625,458
        G, Part II    1.21      1     3.4, 3.5, 3.6   22.00   Park Anaheim Sub-Acute Healthcare                                               10,112,614       (12,590) 10,100,024
        G, Part II    1.22      1     3.4, 3.5, 3.6   23.00   Pico Rivera Healthcare                                                           5,078,680        (7,302)   5,071,378
        G, Part II    1.24      1     3.4, 3.5, 3.6   25.00   Shea Rehab and Sub-Acute Center                                                 10,366,136         2,095 10,368,231
        G, Part II    1.25      1     3.4, 3.5, 3.6   26.00   Sherman Oaks Rehab Center                                                        8,720,273          (802)   8,719,471
        G, Part II    1.26      1     3.4, 3.5, 3.6   27.00   Sherman Village Care Center                                                      9,562,411       (12,589)   9,549,822
        G, Part II    1.27      1     3.4, 3.5, 3.6   28.00   Studio City Convalescent Hospital                                               11,649,273          (797) 11,648,476
        G, Part II    1.29      1     3.4, 3.5, 3.6   30.00   View Park Convalescent Hospital                                                  5,370,730        20,200    5,390,930
        G, Part II    1.30      1     3.4, 3.5, 3.6   31.00   West Hills Rehab Center                                                          9,321,767       (10,219)   9,311,548
        G, Part II    1.31      1     3.4, 3.5, 3.6   32.00   Western Sub-Acute and Convalescent Hospital                                     10,407,593          (799) 10,406,794
        G, Part II     18       1     3.4, 3.5, 3.6   33.00   Total - Health Care Facilities                                                 250,210,200       (68,682) 250,141,518
                                                                  To adjust the reported allocation statistics to agree with the reported
                                                                  total cost of the facilities.
                                                                  42 CFR 413.20 and 413.24
                                                                  CMS Pub. 15-1, Sections 2150.3D, 2205, 2300 and 2304




                                                                                                                                                                               Page 12
State of California                                                                                              Department of Health Care Services

Provider Name                                              Fiscal Period                                       Provider Number               Adjustments
LONGWOOD MANAGEMENT CORPORATION                            MARCH 1, 2007 THROUGH FEBRUARY 29, 2008             N/A                                 39
                     Report References
                Cost Report               Audit Report
       CMS 0287-05
Adj.     Page or                                                                                                   As            Increase         As
No.      Exhibit      Line     Col.      Sch        Line                  Explanation of Audit Adjustments       Reported       (Decrease)     Adjusted
                                                                        ADJUSTMENTS TO OTHER MATTERS

 38    Not Reported                       4        1.00    Alden Terrace Convalescent Hospital                              0     0.250000    0.250000
       Not Reported                       4        2.00    Alameda Care Center                                              0     0.833333    0.833333
       Not Reported                       4        3.00    Broadway Manor Care Center                                       0     0.833333    0.833333
       Not Reported                       4        4.00    Burbank Rehab Healthcare Center                                  0     0.833333    0.833333
       Not Reported                       4        5.00    Burlington Convalescent Hospital                                 0     0.333333    0.333333
       Not Reported                       4        6.00    California Rehab Center                                          0     0.833333    0.833333
       Not Reported                       4        7.00    Casa Bonita Sub-Acute and Convalescent Hospital                  0     0.833333    0.833333
       Not Reported                       4        8.00    Chino Valley Rehab Center                                        0     0.833333    0.833333
       Not Reported                       4        9.00    Colonial Sub-Acute and Care Center                               0     0.833333    0.833333
       Not Reported                       4       10.00    Covina Sub-Acute and Care Center                                 0     0.833333    0.833333
       Not Reported                       4       11.00    Crenshaw Convalescent Hospital                                   0     0.333333    0.333333
       Not Reported                       4       12.00    Green Acres Lodge                                                0     0.833333    0.833333
       Not Reported                       4       13.00    Imperial Care Center                                             0     0.833333    0.833333
       Not Reported                       4       14.00    Imperial Crest Care Center                                       0     0.833333    0.833333
       Not Reported                       4       15.00    Intercommunity Sub-Acute and Care                                0     0.833333    0.833333
       Not Reported                       4       16.00    Live Oak Rehab Center                                            0     0.833333    0.833333
       Not Reported                       4       17.00    Longwood Manor Sub-Acute                                         0     0.333333    0.333333
       Not Reported                       4       18.00    Magnolia Gardens Convalescent Hospital                           0     0.333333    0.333333
       Not Reported                       4       19.00    Monterey Care Center                                             0     0.833333    0.833333
       Not Reported                       4       20.00    Montrose Healthcare                                              0     0.833333    0.833333
       Not Reported                       4       21.00    Northridge Care Center                                           0     0.833333    0.833333
       Not Reported                       4       22.00    Park Anaheim Sub-Acute Healthcare                                0     0.833333    0.833333
       Not Reported                       4       23.00    Pico Rivera Healthcare                                           0     0.833333    0.833333
       Not Reported                       4       24.00    San Gabriel Convalescent Center                                  0     0.833333    0.833333
       Not Reported                       4       25.00    Shea Rehab and Sub-Acute Center                                  0     0.833333    0.833333
       Not Reported                       4       26.00    Sherman Oaks Rehab Center                                        0     0.833333    0.833333
       Not Reported                       4       27.00    Sherman Village Care Center                                      0     0.833333    0.833333
       Not Reported                       4       28.00    Studio City Convalescent Hospital                                0     0.833333    0.833333
       Not Reported                       4       29.00    Sunnyview Convalescent Hospital                                  0     0.833333    0.833333
       Not Reported                       4       30.00    View Park Convalescent Hospital                                  0     0.333333    0.333333
       Not Reported                       4       31.00    West Hills Rehabilitation Center                                 0     0.833333    0.833333
       Not Reported                       4       32.00    Western Sub-Acute and Convalescent Hospital                      0     0.833333    0.833333

                                                                                    -Continued on next page-

                                                                                                                                                 Page 13
State of California                                                                                                                  Department of Health Care Services

Provider Name                                                Fiscal Period                                                         Provider Number                Adjustments
LONGWOOD MANAGEMENT CORPORATION                              MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                               N/A                                  39
                      Report References
                 Cost Report               Audit Report
        CMS 0287-05
 Adj.     Page or                                                                                                                      As            Increase          As
 No.      Exhibit      Line      Col.     Sch        Line                   Explanation of Audit Adjustments                         Reported       (Decrease)      Adjusted
                                                                          ADJUSTMENTS TO OTHER MATTERS
-Continued from previous page-
  38 Not Reported                          4         34.00   Mission Hospice                                                                    0      0.833333    0.833333
       Not Reported                        4         35.00   California Villa of Van Nuys                                                       0      0.833333    0.833333
       Not Reported                        4         36.00   Crofton Manor                                                                      0      0.333333    0.333333
       Not Reported                        4         37.00   Huntington Retirement Hotel                                                        0      0.833333    0.833333
       Not Reported                        4         38.00   Parkhurst Retirement Residential                                                   0      0.333333    0.333333
       Not Reported                        4         39.00   Pasadena Manor                                                                     0      0.833333    0.833333
       Not Reported                        4         40.00   San Dimas Retirement Center                                                        0      0.333333    0.333333
       Not Reported                        4         41.00   Woodland Hills Retirement                                                          0      0.750000    0.750000
                                                                To incorporate the ratio of concurrent period to apportion
                                                                concurrent cost for the chain components.
                                                                42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304

 39     Not Reported                       4        1.00     Alden Terrace Convalescent Hospital                                                0     0.750000     0.750000
        Not Reported                       4        2.00     Alameda Care Center                                                                0     0.166667     0.166667
        Not Reported                       4        3.00     Broadway Manor Care Center                                                         0     0.166667     0.166667
        Not Reported                       4        4.00     Burbank Rehab Healthcare Center                                                    0     0.166667     0.166667
        Not Reported                       4        5.00     Burlington Convalescent Hospital                                                   0     0.666667     0.666667
        Not Reported                       4        6.00     California Rehab Center                                                            0     0.166667     0.166667
        Not Reported                       4        7.00     Casa Bonita Sub-Acute and Convalescent Hospital                                    0     0.166667     0.166667
        Not Reported                       4        8.00     Chino Valley Rehab Center                                                          0     0.166667     0.166667
        Not Reported                       4        9.00     Colonial Sub-Acute and Care Center                                                 0     0.166667     0.166667
        Not Reported                       4       10.00     Covina Sub-Acute and Care Center                                                   0     0.166667     0.166667
        Not Reported                       4       11.00     Crenshaw Convalescent Hospital                                                     0     0.666667     0.666667
        Not Reported                       4       12.00     Green Acres Lodge                                                                  0     0.166667     0.166667
        Not Reported                       4       13.00     Imperial Care Center                                                               0     0.166667     0.166667
        Not Reported                       4       14.00     Imperial Crest Care Center                                                         0     0.166667     0.166667
        Not Reported                       4       15.00     Intercommunity Sub-Acute and Care                                                  0     0.166667     0.166667
        Not Reported                       4       16.00     Live Oak Rehab Center                                                              0     0.166667     0.166667
        Not Reported                       4       17.00     Longwood Manor Sub-Acute                                                           0     0.666667     0.666667
        Not Reported                       4       18.00     Magnolia Gardens Convalescent Hospital                                             0     0.666667     0.666667
        Not Reported                       4       19.00     Monterey Care Center                                                               0     0.166667     0.166667
        Not Reported                       4       20.00     Montrose Healthcare                                                                0     0.166667     0.166667

                                                                                      -Continued on next page-

                                                                                                                                                                      Page 14
State of California                                                                                                                Department of Health Care Services

Provider Name                                              Fiscal Period                                                         Provider Number               Adjustments
LONGWOOD MANAGEMENT CORPORATION                            MARCH 1, 2007 THROUGH FEBRUARY 29, 2008                               N/A                                 39
                     Report References
                Cost Report               Audit Report
        CMS 0287-05
 Adj.     Page or                                                                                                                    As            Increase         As
 No.      Exhibit      Line      Col.    Sch        Line                  Explanation of Audit Adjustments                         Reported       (Decrease)     Adjusted
                                                                        ADJUSTMENTS TO OTHER MATTERS
-Continued from previous page-
  39 Not Reported                         4       21.00    Northridge Care Center                                                             0     0.166667    0.166667
       Not Reported                       4       22.00    Park Anaheim Sub-Acute Healthcare                                                  0     0.166667    0.166667
       Not Reported                       4       23.00    Pico Rivera Healthcare                                                             0     0.166667    0.166667
       Not Reported                       4       24.00    San Gabriel Convalescent Center                                                    0     0.166667    0.166667
       Not Reported                       4       25.00    Shea Rehab and Sub-Acute Center                                                    0     0.166667    0.166667
       Not Reported                       4       26.00    Sherman Oaks Rehab Center                                                          0     0.166667    0.166667
       Not Reported                       4       27.00    Sherman Village Care Center                                                        0     0.166667    0.166667
       Not Reported                       4       28.00    Studio City Convalescent Hospital                                                  0     0.166667    0.166667
       Not Reported                       4       29.00    Sunnyview Convalescent Hospital                                                    0     0.166667    0.166667
       Not Reported                       4       30.00    View Park Convalescent Hospital                                                    0     0.666667    0.666667
       Not Reported                       4       31.00    West Hills Rehabilitation Center                                                   0     0.166667    0.166667
       Not Reported                       4       32.00    Western Sub-Acute and Convalescent Hospital                                        0     0.166667    0.166667
       Not Reported                       4       34.00    Mission Hospice                                                                    0     0.166667    0.166667
       Not Reported                       4       35.00    California Villa of Van Nuys                                                       0     0.166667    0.166667
       Not Reported                       4       36.00    Crofton Manor                                                                      0     0.666667    0.666667
       Not Reported                       4       37.00    Huntington Retirement Hotel                                                        0     0.166667    0.166667
       Not Reported                       4       38.00    Parkhurst Retirement Residential                                                   0     0.666667    0.666667
       Not Reported                       4       39.00    Pasadena Manor                                                                     0     0.166667    0.166667
       Not Reported                       4       40.00    San Dimas Retirement Center                                                        0     0.666667    0.666667
       Not Reported                       4       41.00    Woodland Hills Retirement                                                          0     0.250000    0.250000
                                                              To incorporate the ratio of nonconcurrent period to apportion
                                                              nonconcurrent cost for the chain components.
                                                              42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304




                                                                                                                                                                   Page 15

				
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