Since one of the primary concerns of Montgomery County was to find ways to overcome the loss of the Inter-Governmental Transfer funds of more than $1,000,000.00 per year, we began looking at some of the more obvious sources of income. One of the first things we looked at was the Case Mix Index, because a 0.01 change in the Case Mix Index can mean a difference of approximately $25,000.00 per year in net income.

On the following two pages are two charts depicting the effect on the Case Mix Index resulting from moving residents with the lowest classification point scores (CA, PA and PB) to an alternate level of care (Assisted Living Facility).

The data for the charts was based upon the August 2001 census of Montgomery Meadows residents.

Chart "A" shows the effect of replacing the empty resident beds with residents having a point score equal to the average of the remaining residents’ Case Mix Index of 1.226. This keeps the average at 1.226. This could result in an increase in net income of approximately $435,000.00 per year.

Chart "B" shows the effect of replacing the empty resident beds with residents having a point score equal to the lowest of the remaining residents’ Case Mix Index points, which would be 1.03 (CB and PC). This results in a final Case Mix Index of 1.167. This could result in an increase in net income of approximately $290,000.00 per year.

The final result would most likely be somewhere in between these two scenarios.

Some of the factors that could affect these projections would be:

• Larger resident bedrooms with handicapped bathrooms.
• More private rooms
• The creation of Assisted Living beds that do not presently exist.
• Availability of new Nursing Home residents to replace the relocated residents.

Chart A

The Change in the Case Mix Index Created by Shifting CA, PA, and PB Residents to an Alternate Level of Care (Assisted Living Facility) and Replacing Those Resident Beds with Residents Having a Classification Equal to the Remaining Average