The workers' compensation subsidiary is headquartered in Nevada and subleases space from us in one of the buildings included in the sale-leaseback transaction as well as approximately 77,000 square feet of leased office space in California, Colorado and Texas.
In the third quarter, we completed the sale of our affiliated medical provider group in Dallas/Ft. Worth and our corporate residence in Utah. In the fourth quarter, we completed the sale of our corporate airplane, the Houston HMO membership and the sale-leaseback of the majority of our Las Vegas real estate. In addition, we were able to renegotiate the credit facility agreement with the banks in December and we are now in compliance with all financial covenants. We used $50 million of the sale-leaseback proceeds to permanently pay down the credit facility debt and at December 31, 2000, our credit facility debt balance was $135 million.
Medical premiums from our HMO and managed indemnity insurance subsidiaries increased $42.1 million or 5.1%. The $42.1 million increase in premium revenue reflects a 5.3% increase in Medicare member months (the number of months of each year that an individual is enrolled in a plan) offset by a 6.2% decrease in commercial member months. The growth in Medicare member months contributes significantly to the increase in premium revenues as the Medicare per member premium rates are over three times higher than the average commercial premium rate. HMO premium rates for commercial groups increased approximately 4% in Nevada, 17% in Dallas/Ft. Worth and 4% in Houston. Our managed indemnity rates increased approximately 12% and Medicare rates increased approximately 2%. Over 95% of our Las Vegas, Nevada Medicare members are enrolled in the Social HMO Medicare program. The Health Care Financing Administration, or HCFA, may consider adjusting the reimbursement factor or changing the program for the Social HMO members in the future. If the reimbursement for these members decreases significantly and related benefit changes are not made timely, there could be a material adverse effect on our business.
In the first quarter of 1999, we recorded a premium deficiency medical charge accrual of $8.1 million related to losses in underperforming markets, primarily in Arizona and rural Nevada, all of which was used during 1999. In the fourth quarter of 1999, we recorded a premium deficiency charge accrual of $21.0 million for estimated deficient premiums associated with 2000 contracts in the Texas market of which, $10.0 million was included in premium deficiency medical expenses and $11.0 million was recorded in asset impairment, restructuring, reorganization and other costs. During the fourth quarter of 1999, we recorded changes in estimate charges of $11.2 million primarily related to an adjustment to the estimate for medical expenses recorded in previous years and $6.8 million primarily related to contractual settlements with providers of medical services
In connection with the restructuring plans we adopted and announced in the second quarter of 2000, we re-evaluated the recoverability of certain long-lived assets, primarily associated with the Texas operations, in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of", or SFAS No. 121, and Accounting Principles Board Opinion No. 17, "Intangible Assets", or APB No. 17, and determined that the carrying values of certain goodwill and other long-lived assets were impaired.
SMHS receives monthly cash payments equivalent to one-twelfth of its annual contractual price with the Department of Defense, or DoD. SMHS accrues health care revenue on a monthly basis for any monies owed above its monthly cash receipt based on the number of at-risk eligible beneficiaries and the level of military direct care system utilization. The contractual bid price adjustment, or BPA, process serves to adjust the DoD's monthly payments to SMHS, because the payments are based in part on 1996 DoD estimates for beneficiary population and beneficiary population baseline health care cost, inflation and military direct care system utilization. As actual information becomes available for the above items, quarterly adjustments are made to SMHS' monthly health care payment in addition to lump sum adjustments for past months. In addition, SMHS accrues change order revenue for DoD-directed contract changes. During the second and fourth quarters of 2000, SMHS received $13 million and $37 million, respectively, as partial payments from the BPA process covering the period June 1, 1998 through December 31, 2000. As a result of preliminary data accumulated from the BPA process, SMHS received a partial upward adjustment of approximately $2.2 million to its monthly DoD payments for January 2001 through December 2001. Our business and cash flows could be adversely affected if the timing or amount of the BPA and change order reimbursements vary significantly from our expectations. SMHS is in the process of finalizing a financing arrangement for its accounts receivable balance in order to improve the availability of cash. The military accounts receivable balance was $71.4 million as of December 31, 2000. (See Note 2 of Notes to the Consolidated Financial Statements).
Government regulation of health care coverage products and services is a changing area of law that varies from jurisdiction to jurisdiction. Changes in applicable laws and regulations are continually being considered, including legislative proposals to eliminate or reduce ERISA pre-emption of state laws, that would increase potential litigation exposure and interpretation of existing laws and rules also may change from time to time. Regulatory agencies generally have broad discretion in promulgating regulations and in interpreting and enforcing laws and regulations.
In the first quarter of 1998, the Company purchased three medical clinics in southern Nevada for approximately $7.3 million.