Question-and-Answer Session
Operator
(Operator Instructions) And our first question comes from the line of Darren Lehrich from Deutsche Bank. You may proceed.
Darren Lehrich - Deutsche Bank
Thanks. Good morning everyone. A few things here. I guess wanted to start out with just the discussion around the 2006 Medicare cap. And Dirk can you just tell us how many provider numbers you've received letters for at this point? And it sounds like you are doing some extrapolating. So just maybe tell us the process in which you're doing that?
Dirk Allison
Yes, we've received about seven cap letters so far. We have three to go. And what we are doing as we looked at the three remaining, we looked at the letters and while we had a shortfall in certain of those programs and it related to our reserve around transfers in, in the initial year of election. And it was a shortfall we discovered with our system at the time. We made an estimation based on what we had seen and we booked an additional $900,000 in the first quarter to take care of the remaining programs out there.
Darren Lehrich - Deutsche Bank
Okay so this in your estimation should take care of the 2006 cap year? Is that fair to say?
Dirk Allison
Yes, we believe that is correct.
Darren Lehrich - Deutsche Bank
Okay and then just on to the ADRs, first can you just tell us how much accounts receivable you've got backed up related to this process? And Bob maybe just share with us what the experience has been with regard to denials thus far?
Dirk Allison
Well we have-- if you look at our total ADRs and holds, we have approximately $13 million tied up at this point in time.
Darren Lehrich - Deutsche Bank
Okay. And has that amount-- I recall that being closer to 15, so has that come down a little bit sequentially?
Dirk Allison
Yes, if you actually go back to the third quarter 2007, our high point was $17.3 million. So we are down to $13.3 million at this point in time.
Darren Lehrich - Deutsche Bank
Okay. And then your experience with denials as you move through this process?
Bob Lefton
Our denials -- what we have seen is our initial denial rate has been fairly consistent around the 14%, 15% range. Our ultimate denial rate we are still working on, probably is around the 9% to 10% rate.
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