PayerFusion Operational Overview

May 21, 2013

A six sigma-total quality management company.

The next generation of cost containment and claims management technology.

Operational Overview2013

We use a combination of HIPPA Compliant technologies and services to provide the next generation of claims management solutions.

• Privately held company with corporate offices in Miami.

• Proprietary provider network and a zero balance billing guarantee.

• Technology that supports 3rd party administrators, payers and providers.

• State-of-the-art Internet-based software for payer processing.

• Flexibility to enable payer-specific customizations.• Experts in billing guidelines and coding standards,

network development and payment execution and receivables.

OVERVIEW

Our mission is to assist insurance companies, self-insured multi-national companies and providers in settling claims in a fair and timely manner.

• Promoting our clients’ branding and awareness in the International and Domestic marketplace.

• Reducing average claim payment cycles with established financial commitments and guidelines.

• Reducing administrative expenditures of collection efforts by providers and unnecessary parties that delay payments and provide no patient steerage.

• Providing superior customer service to all stakeholders.

• Maintaining a technological edge through service delivery.

• Securing the elimination of silent PPO, simplifying administration of services and facilitating an increase in patient base.

• Keeping abreast of the transient regulatory changes of the US payer marketplace.

OUR MISSION

OUR SERVICES & THE INDUSTRY

• PayerFusion represents a cost effective solution for the Provider with effective and consistent cash flow matrixes, designed and analyzed to each payer in each geographic area of the world or point of origin.

• Our process focuses on fair equitable payment based on time, the value of money and the AM Best classes of payers (risk assessment).

• Times are changing in the U.S. healthcare market, most solution offers represent “more of the same”.

• PayerFusion moves away from the traditional PPO discount and customizes a successful structure for Provider and Payer.

PayerFusion is dedicated to assist international payers

in finding effective solutions to support policy

compliance and administration.

• Provide guidance and forward thinking in structuring policy and claims models for non-USA companies and domestic companies

• Advising on the best practices for preserving premium ratios and competitive advantage.

• Maintain international payer brand recognition while keeping claims costs consistent with USA domestic companies.

WHY PAYERFUSION?

• Unparalleled market experience.

• Seasoned, well-integrated and collaborative management team.

• Forward thinking approach connecting our knowledge and vision for healthcare reform to proactive policies and procedures.

• A commitment to excellence.

• A Six Sigma approach to continuous quality improvement.

• Technology solutions to provide you with complete transparency, access and information to help you manage your portfolio.

• Bottom line results: We help you control your cost per claim and effectively deal with healthcare inflation.

WHY PAYERFUSION?

PayerFusion Holdings LLC

PayFuseNet LLC

• The legal structure of PayerFusion ® has existed since 2009. Florida Limited Liability Company.

• Obtained licenses in all State and passed the strict requirements of the insurance commissioners in each and every State, this is an important seal of approval of the authorities of integrity.

• No legal pending matters in any State or with any entity.

• Our principals and management have been in the industry for more than 30 years.

• Many key management staff have worked together before which helps foster a strong team with industry knowledge and a commitment to excellence.

LEGAL STRUCTURE

LEADERS IN OUR FIELD

• Founder and CEO of HAA Preferred Partners, LLC, a U.S. based preferred provider organization and third party administrator (sold 2007).

• Grew company from $0 to $12MM in revenue and became recognized as top quality provider operating in an ISO certified environment transacted over 150 million dollars in claims, company growth in excess of 25% annually- sold 2007.

• Former Director with Blue Cross and Blue Shield of Florida and the Federal Medicare.

• Former Executive at Mount Sinai Medical Center, Miami Beach, Florida, a non-profit, 600 + plus bed teaching hospital of national recognition.

• Graduate degrees in Healthcare Administration and Public Health. • Member of President Bill Clinton’s healthcare reform task force.• Recipient of the Woman of the Year Award by President George W Bush and the

Republican Party in 2005.• Participant in President Barack Obama’s healthcare reform support task force.

Griselle ChernysPresident & CEO

ORGANIZATIONAL CHART

Claims Operations

Case Management & Utilization*

Network Management

Provider Relationships

Client Service

Key Business Activities

*Optional Service per Client request

BUSINESS PROCESS MODEL

Support Activities

Web Enabled Technologies (Web Portal)

Reporting and Decision Support Services

Technology Department

OUR SERVICES

Medical CaseManagement

Network Design &Support

Technology Solutions/Support &

Informatics

Travel AssistanceServices

Plan/Policy Administration (TPA)

ConciergeMedical Services

Air Ambulance &Medical Escort

Provider Reimbursement

Custom Reporting

Call-Center Services

SERVICE OPTIONSO

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Our complete service option provides our clients with 24/7 access to call center services that are customized to your specific needs and requirements. We will customize other processes and SLA’s to meet your needs and standards.

• Care Setting• Care Assistance Services• Claims Management• Case Management &

Utilization Review• Utilization of PayFuseNet

Provider Network• Bill Review & Auditing• Customer & Client Services

With this option, PayerFusion handles only the health policy portion of the travel policy. This option allows the client to take advantage of PayerFusion’s expertise in medical claims management, utilization review, and our comprehensive networks and savings.

• Claims Management• Case Management &

Utilization Review• Utilization of

PayFuseNet Provider Network

• Incident management

This option is for clients who perform their own call center functions, case management and claims review in-house. Approved claims are submitted to PayerFusion for re-pricing via our networks. We also administer claims in the Caribbean, Canada, Central and South America and other parts of the world. With this option, the client may choose to execute the payments or PayerFusion can execute and adjudicate the claim.

• Re-pricing for US & International Claims

• Provider Reimbursement (optional)

• Cost Plus – Claims Reduction• Network Affiliates• Claim Analysis and Validation• Fraud Detection• Benefits Verification and

Coordination • Claims Processing & Provider

Payment• Secured/Firewall Environment• Customized PPay (Explanation of

Benefits)• Customized Batch Processing • Zero Balance Confirmation

Claims Management CapabilitiesCLAIMS MANAGEMENT

Case Pre-Settlement• The process of pre-settlement is

modeled according to our Cost Plus methodology. It uses the estimated charges (reserves) calculated by our Medical Case department and the benchmark data from the government sources.

• There are multiple ways to pre-arrange payment settlement by packaging conditions. For example: (1) cardiac, (2) labor and delivery, (3) orthopedic surgery, (4) solid organ transplant.

• Case pre-settlement guarantees our ability to obtain a fair price for quality services and it ensures there is no over-utilization.

• Handling an entire episode of care allows us to expedite the claims processing and payment to the provider, which further reduces the cost per claim and recognizes the client as a good payer.

CLAIMS MANAGEMENT

Claim Analysis & Validation

• This function consists in reviewing each claim for billing discrepancies in the structure of the case, duplicate charges, inaccurate coding. It is based on government established billing practice codes by the AMA (American Medical Association) and CCI (Correct Coding Initiative)

• Our ability to maximize the benefit of fully validating a claim requires that we have a complete set of claims related to an episode of care. For example, multiple charges for the same service could be submitted on separate claims and we may only receive one of them.

CLAIMS MANAGEMENT

Fraud Detection

FraudDetection

Criteria

• Excessive billing amounts

• Higher Costs per patient

• Excessive number of patients per doctor

• Increased number of tests per patient

• Abnormal distance between treatment location and patient home.

• Higher rates of prescriptions for certain drugs

1. Billing for services not provided or needed2. Multiple billing for services

A. Administering tests not medically necessaryB. Administering more expensive tests

Examples of Fraud:

Examples of Abuse:

CLAIMS MANAGEMENT

2 1

A

B

OUR REIMBURSEMENT METHODOLOGY

Our unique approach to claims management enables our clients to reduce the cost per claim. It is supported by national data reported by US federal agencies.

Our methodology allows providers reimbursement, which affords them a fair profit to maintain quality and a competitive standard of care.

• Our clients obtain the best pricing available because we have all key financial elements needed to develop a reimbursement model for our direct contracts: the retail price, the actual cost, and an understanding of how each provider needs to offset losses from its Medicare patients.

• Our expertise and experience on all sides of the healthcare business enable us to understand the needs of each stakeholder in the healthcare equation. It is an invaluable advantage in negotiating effectively and maintaining long-term relationships.

• We speak the language of both the provider and the payer supported with empirical data, which allows us to produce sustainable results built on effective but fair negotiations with healthcare providers.

COSTPLUS REIMBURSEMENT ADVANTAGE

Detailed dataon 90% of all

hospitals

Public Data

HCRIS Files: Hospital Cost ReportsState All-Payer Files: Commercial Payers, Medicare, MedicaidMedPar Files: All Medicare dischargesSAF Outpatient Files: Institutional Outpatient claimsOPPS Files: Outpatient claims

Millions of dischargesApproximately 75% of all discharges nationally >140 million outpatient occurrenceData refreshed monthly (most recently 12 months, inflation, Wage Index factors normalize the data)

• Urban• Rural

HospitalLocation

• Teaching• Non-teaching

Facility Type

• 1 – 150• 151 – 300• 300+

BedsizeCategory

National Discharge Database

We use our proprietary methodology to assess each claim amount based on actual benchmark information stratified by the following categories: • Each inpatient claim is

compared to a benchmark group of similar clinical cases, in “like” hospitals, over the most recently available 12 months.

• Wage Index Adjusted as assigned by CMS.

The percentage difference between the highest and the lowest cost for the same service is on the average only 18%, while the measure of dispersion for the charges is much higher – on the average, 44%.

BENCHMARK ANALYSIS OF COSTS & CHARGES

Medical Services Cost ChargesMajor joint replacement or reattachment of lower extremity 11% 88.35%Other Infectious & Parasitic Diagnoses 49% 69.69%Urinary Stones w/o ESW Lithotripsy w/o MCC 27% 43.56%Intracranial hemorrhage or cerebral infarction w cc 19% 46.03%Cardiac Valve & Oth maj cardiothoracic proc w card cath w cc 6% 9.01%Nutritional & Misc metabolic disorders age >17 w CC 20% 62.07%Simple pneumonia & pleurisy w cc 11% 19.33%Lower Extreme & humer pro except hip, foot, femur 23% 51.75%Heart Failure & Shock w cc 36% 66.40%Permanent Cardiac pacemaker implant w/o cc/mcc 9% 30.06%Appendectomy w/o complicated principal diag w/o cc/mcc 15% 28.23%Major joint replacement or reattachment of lower extremity w/o mcc 10% 46.06%Respiratory System diagnosis with venlator support < 96 hours 11% 45.94%Septicemia w/o mv 96 + hours age >17 12% 40.61%Appendectomy w/o complicated prinicipal diag w cc 3% 20.55%Perc cardiovasc proc w/o coronary artery stent w/o mcc 19% 43.26%Peripheral vascular disorders w cc 11% 23.57%Coagulation disorders 25% 57.52%Percutaneous cardiovascular proc w drug-eluting stent w/o maj cv 6% 9.45%Dysequilibrium 20% 98.27%Major small & large bowel procedures w cc 20% 86.66%Cellulitis w mcc 8% 31.67%Other musculoskelet sys & conn tss o.r. proc w/o 27% 69.24%Appendectomy w/o complicated principal diag w/o cc/mcc 18% 45.51%Periph/cranial nerve & other nerv syst proc w mcc 35% 57.01%Respiratory system diagnosis with ventilator support < 96 hours 11% 15.25%Urinary stones w/o esw lithotripsy w/o mcc 12% 20.01%Perc cardiovasc proc w drug-eluting stent 7% 8.37%Otitis media & URI age 0-17 23% 22.30%Extraocular procedures except orbit 29% 56.12%Hip & femur procedures except major joint w/o 26% 19.89%Rehabilitation w/o cc/mcc 34% 45.40%Intracranial Hemorrage or Cerebral Infarction W CC 17% 73.21%

18% 44%

BENCHMARK ANALYSIS OF COSTS & CHARGES% difference between the highest and lowest costs & retail charges

Model Components Facility A Facility B

Owner Private, Not for Profit

Private, Not for Profit

Teaching Status Teaching Non-TeachingBed Size Large SmallRegion Northeast MidwestLocation Metropolitan Non-

MetropolitanActual Charges $9,202 $27,006Actual LOS 1 day 1 dayBenchmark Average Charges $21,313 $19,420Benchmark Average Cost $6,643 $7,212Benchmark Average LOS 1.52 1.54Facility Charge v. Benchmark -34% 118%Benchmark % Mark Up from Cost

221% 170%

Facility estimated % Mark Up 111% 478%Baseline Reduction at Benchmark

-52.64 53.23%

Actual Reimbursement $6,000.00 $14,000% Mark Up from Cost 37% 199%% Reduction 35% 48%

• Facility A: Mark-up from cost at 111%, which is below the benchmark average of 221%.

• Facility B: Mark-up from cost for the same service is 478%, significantly higher than its peers benchmarked at 170%.

• To maximize value to payer and achieve fair pricing for provider, claims were repriced at a reduction of 35% and 48%, respectively, from retail charges.

Actual Charges Benchmark Charges

Benchmark Cost$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Appendectomy w/o complicated principal diag w/o cc/mcc (DRG 343)

Facility A

Facility B

COMPARATIVE ANALYSIS


DRG: 149 - Disequilibrium

Facility Mark up from Cost Benchmark Mark up from Cost0%

100%200%300%400%500%600%700%800%

729%

201%

Cost of Care AnalysisMeasures Actual Results

Actual Charges $15,834

Cost of Care $1,910

% Mark-up from Cost 729%

Payment to Provider $6,500


Gross Reduction $9,334

% Gross Reduction 59%

PF Access Fee $1,680

Net Cost of Claim $8,180

Net Reduction $7,654

Net % Reduction of Charges 48%

Cost-Plus Results – Example 1


Cost-Plus Results – Example 2DRG: 343 - Appendectomy w/o complications

Facility Mark up from Cost Benchmark Mark up from Cost180%185%190%195%200%205%210%215%220%

218%

196%

Cost of Care Analysis

Measures Actual Results


Cost of Care $4,688











Cost-Plus Results – Example 3DRG: 330 – Major sm & lrg bowel procedures w/ cc

Facility Mark up from Cost

Benchmark Mark up from Cost

180%185%190%195%200%205%210%215%220%

218%

196%


31%

21%9%

39%

Cost Plus Results

Cost of Care

Plus Mark-up

PayerFusion Fees

Net Reduction



Cost of Care $24,130











Cost-Plus Results – Example 4DRG: 599 – Malignant breast disorders w/o cc/mcc

Facility Mark up from Cost Benchmark Mark up from Cost0%

50%100%150%200%250%300%350%400%450%500%

476%

170%


21%

45%

5%

29%

Cost Plus Results

Cost of Care

Plus Mark-up

PayerFusion Fees

Net Reduction



Cost of Care $1,582






PF Access Fee $425




Key Metrics July, 2012 YTD

Total Gross Charges Closed $20,200,478

Total Actual Reimbursement $11,110,262

Gross Reduction Amount $9,090,216

Gross Reduction % 45%

% Reduction Due to Claim Review 3.4%

% Reduction Due to Provider Contract 41.6%

PayerFusion Fees at 20%* $1,818,043

Net Reduction after PayerFusion Fees $7,272,173

Net Reduction % after PayerFusion Fees 36%

Claims Cost

Number of Claims Priced 8,782

Average Gross Cost per Claim $2,300

Average Cost after reduction $1,265

Average Net Cost after PayerFusion Fees $1,472

Other Statistics:

Total Number of Claims Closed 8,782

Average Claim Age (DOS) upon receipt 56

Average Turnaround days 18

Claim Status Gross Charges % of Total Total Count % of TotalClosed $20,200,478 80% 8,782 76%In Process $3,282,578 13% 2,196 19%Returned $505,012 2% 116 1%Pending Authorization $757,518 3% 231 2%Duplicate $505,012 2% 231 2%

Total $25,250,598 100% 11,555 100%

80%

13%2% 3% 2%

% of Total Gross Charges by StatusAs of July, 2012 YTD

Closed In Process Returned Pending Authorization Duplicate

SAMPLE CLAIMS SCORECARD

• Daily Ppay Batch report • Case Update and Reserve Information• Monthly invoice• Zero Balance Report• Monthly Dashboard• Quarterly Performance Dashboard

• Productivity reports by Agent• Claims Analyses• Comparative Analyses• Benchmark Cost Analyses• Claims Status Reports• Inventory Claims Management Reporting• Data Analysis and modeling

Customized Client Reporting

Internal Reporting & Controls

REPORTING & PROCESS OUTPUTS

1Q 2Q 3Q$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

Total Charges Closed

1Q 2Q 3Q15%

20%

25%

30%

35%

40%

45%

Average % Reduction per Quarter

Avg Qrt Target 0

5

10

15

20

15 20

Average Turnaround daysto process claims

SAMPLE MEASURABLES

No Process Outcomes Measure Metric Target

1 Acknowledged receipt of new case

Responsiveness Turnaround time 24 hours from receipt of case

2 Delivery of estimated reserves for each episode of care

Timeliness Turnaround time 48 hours from receipt of case

3 Maintaining accurate reserves for episode of care

Accuracy % of Actual Cost 95%

4 Follow-up on each case Effectiveness % of time cases are followed up every 48 hours

99%

5 Reduction of claims Financial Efficiency Average % Gross Reduction

43%

6 Claim processing and release of Ppay

Process Efficiency Average turnaround (from receipt of claim to release of Ppay)

20 business days

7 Confirmed zero balance on each patient account

Effectiveness % of closed accounts at zero balance

100%

KEY QUALITY METRICS

PayerFusion is a technology driven company providing clients with online access for monitoring the entire claims cycle, an online provider search, advanced call-center technology and a user-friendly mobile app.

• Claims Portal to review all claims statuses and claims results and ageing.

• On line provider search branded with your company name and logo featuring interactive driving directions and Google maps integration in multiple languages.

• Dedicated phone numbers and toll free numbers when applicable answered in the Client’s brand if required.

• Mobile application for the provider search with geo location feature to locate closest providers.

PAYERFUSION TECHNOLOGY

PayerFusion Services - Specialty ServicesOUR PROVIDER NETWORK

• Avoids the use of multiple networks which are non-compliant and cause balance billing issues.

• Also includes pharmacy network, transplant services, dental, vision and second opinion services.

• Provider search available in 3 languages: English, Spanish & German

• Network design that defines the best place of service based on cost and quality

• Patient pointed to the most cost effective facility, without compromising freedom of choice

• Compliant with US regulations such as “Patient Balance Billing Act”

• Compliant with the “Network Leasing Act”

PROVIDER SEARCH

Web Portal - Fast Data Transfer• Allows for the monitoring of claim

status changes • Facilitates the real-time transmission of claim

information and associated documents (EOB, invoices, etc.) to client claim system

• Supports the tracking of claim activity and changes from the moment the claim is entered to final pricing


• Accessible via the Internet

• Remotely hosted at a hardened data center

• 99.9% guaranteed up-time

• Utilizes 128-bit encryption (SSL-enabled)

• Open interfaces to integrate with legacy systems

• Multi-language support/multi time zone

• Electronic Claims – 837 Format

• Multi-currency real time conversion

Web Portal• Electronic Payments

• Handles sophisticated client business configurations

• Role-based security

• Developed using open-source technologies

• Friendly user interface

• Leverages strong workflow components and transaction processing engine


• Automatic Call Distribution (ACD)

• Real-time management through web interface

• 360 degree view of call activity with user managed status

• Up-to-the-minute insight into call center metrics to manage call center activity

• Account level control on routing calls and running reports

Call Center Technology


• Phone calls are answered by live operator as per SLA.

• Dedicated phone line to patients • Toll free number available within the USA (1-800-

XXX-XXXX)• Auto-attendant available as back-up to human

response failure.

CALL CENTER PROTOCOL

Home screen with one-touch access to emergency contacts and closest urgent care clinic.

Our Mobile Solution

Provider search enabling global geo-targeted access to quality providers

Patient health records including coverage information, existing conditions, medications and allergies.

Easily contact insurance carrier, user designated providers and emergency contacts.


• Financial - Superior cost containment results both in the short and long-term savings by controlling growth year over year in the average cost per claim.

• Service – Our expertise and experience in healthcare reduces hassles and administrative burden both for our clients and their insured’s.

• Compliance – We vigilantly monitor and adhere to continuously changing state and Federal regulations so you don't have to; that's how we are able to provide our clients with a zero balance billing guarantee.

COMPETITIVE ADVANTAGES

Economy & Finance

PayerFusion Operational Overview