Sentient Medical Systems

Health Tech Net Meeting December 14, 2007 1

Sentient – A Brief History

• Founded in 1995 as the first national provider of Intra-operative Monitoring (IOM) services • Focused on providing both technologist and remote physician reading services • Since inception, have monitored over 100,000 cases 2

Sentient – A Brief History

• Neurocare business was introduced in 2004 to focus on diagnostic market • Company sold to Dubin Clark, a private equity firm, in February 2007 • New management team appointed after transaction – Jeff Ferguson as CEO; Andy Masetti as CFO 3

Sentient – By the numbers

• Net revenue of $19mm to $22mm, gross revenue run rate at $40mm • 11k IOM procedures; 3k Neurocare procedures • IOM supported by 75-80 full time technologists with 5 reading physicians plus CMO (MD, PhD) 4

Sentient – By the numbers

• Neurocare with 7 technicians plus one of “founders” of the business • Perform services in 22 states • Procedures performed at 200 hospitals with billings to over 500 insurance carriers (20 major ones) 5

Sentient – Other business points • Support provided for all levels of complexity • Technologists have 4 yr degrees and go through a rigorous training program • Physicians all have sub-specialty training in clinical neurophysiology and monitor approx. 2000 cases annually 6

Sentient – Other business points • Perform research and development activities partnering with medical universities and centers • Relationship driven business…contract with the hospital, “sale” to the surgeon 7

Sentient – Why remote physician reads: • Allows oversight in real time to optimize signals and to approve and select the choice of monitoring procedures • Allows a consultative interaction with the surgeon, and by placing the signals in an appropriate clinical context, integrates and optimizes data relative to the clinical condition of the patient 8

Sentient – Why remote physician reads: • Peer to peer communication and advice • Superior knowledge of neuroanatomy, neurophysiology, neurology and neuropharmacology (if supervised by a neurologist) 9

Sentient – State of the Industry

• Relatively new • Highly fragmented; many players • Price competitive, with in-house and out sourcing options • Wide variety of reimbursement procedures and policies 10

Sentient – State of the Industry

• No consensus on number of concurrent cases that can be monitored – critical industry issue • Differing views on medical necessity and reimbursability of physician reads • “What is telemedicine?” 11

Telemedicine – first issue – How do we communicate?

• Telephonic • Real time monitoring - snapshot • Streaming data 12

Telemedicine – Information Technology Issues • Working towards using existing hospital network infrastructure – How do we address hospital firewall • Shutting down OR’s to put in required lines • Back at home… how do you “present” cases to physicians…transfer issues between physicians… dealing with “dropped” cases 13

Telemedicine – Information Technology Issues • Facilitating technologist/reading physician communication • Sentient solution (1) – full time contractor to work with top “40” customers to real time monitor enable the hospital network… patient outcome and reimbursement issue • Sentient solution (2) – all new customers must accept real time monitoring 14

Telemedicine – Privacy issues

• Protecting confidential data while transmitting patient information • “Masking” patient names during transmissions… “deidentification” • Capturing “instant message” communications with proper archiving • Information Life Cycle Management (ILM) critical for HIPAA compliance • PWSP as Sentient HIPAA consultants 15

Telemedicine – Reimbursement Issues • No Consistent Practices • Medicaid – Some states do, some states don’t • Concurrent reads – How many and how do you reimburse. Medicare guidelines recently reissued.

• Some carriers do not recognize or accept remote physician reads (95920) • Corporate Practice of Medicine issues; differing credentialing and licensing requirements • Telephonic – Some do, some don’t, some partial 16

Telemedicine Summary

• Committed to process because of improved patient care • Reimbursement issues – Situation is chaotic. Industry needs to work with payors to achieve some level of standardization • IT – Will evolve, but from discussion with med/mal carriers, must move to at least visual real time 17

Telemedicine Summary

• Customers – must also have a commitment to telemedicine…spotty, but moving towards embracing concept • Guess – maybe 3-5 years before acceptable standardization. Key is Medicare and top 3-5 carriers.

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