NEWEST INNOVATIONS IN REFERENCE BASED PRICING. Ed Day, HST Cindy Hom, MedWatch

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1 NEWEST INNOVATIONS IN REFERENCE BASED PRICING Ed Day, HST Cindy Hom, MedWatch

2 THE WAY WE DO THE HEALTHCARE HEALTHCARE HST HST All RightsResered Resered Confidential

We proide pricing solutions that reduce healthcare costs for payers and consumers by introducing price accountability through

3 Company Oeriew Who We Are What We Do HST is at the forefront of proiding referenced-based pricing (RBP) to its client to help reduce healthcare claims cost since We proide pricing solutions that reduce healthcare costs for payers and consumers by introducing price accountability through transparency. Our Goal Is to reolutionize the way we do healthcare by bending the cost cure downward with alue based payments. Headquartered Irine, CA HST HST All RightsResered Resered Confidential

4 What is Reference-based Pricing (RBP) Definition preailing price for medical serices. RBP is a reimbursement that uses objectie databases such as Medicare and cost information to determine the Types Of RBP Medicare factor equialent RBP Health Plan Cost plus Procedure specific Consumer drien Quality Frequency of serices as a leading indicator Readmission rates outcomes Top hospital ealuation criteria High risk procedures and diagnosis HST HST All RightsResered Resered Confidential

household bankruptcies due to medical expenses SEIU Fair Healthcare Pricing Act of 2014: SEIU, February 2014 Reimburse hospitals at

5 Hae You Heard? Why Medical Bills Are Killing Us Time Magazine, February 2013 $60,000 for $74 ultrasound $21,000 for a heartburn bill 62% of household bankruptcies due to medical expenses SEIU Fair Healthcare Pricing Act of 2014: SEIU, February 2014 Reimburse hospitals at 25% aboe cost Stanford billed $8.6 billion with Expenses of $2.1 billion CalPERS Reference price knees and hips: CalPERS, June 2013 Saed an estimated $3.1 million Expanding for other outpatient procedures HST HST All RightsResered Resered Confidential

6 Want To See RBP? The Numbers Billed Charges: 6.89 x MAP Cost/Medicare Data PPO Discount: 58% RBP Payment: $19,162 Saings Below PPO: $17,801 Additional Saings: 20% HST HST All RightsResered Resered Confidential

7 RBP Plan Case Study Client Profile and Situation 230 Employee multi-state self-funded group Based on 12 months of paid claims Utilized a BUCA PPO THE No benchmarking HEALTHCARE data or R&C (UCR) language HST Inolement Improed reimbursements using reference pricing; Medicare at 150% Turnkey solution from pricing databases, plan docs and stop loss underwriting Client Benefits Reduced claims cost, stop loss premium and PPO fees Claims: $2,896,377 Stop Loss: $791,677 PPO Fees: $15.67 (PEPM) Results PPO RBP Annual Saings $2,519,840 $574,018 $10.25 $376,537 (13% saings) $217,659 (28% saings) $14,959 (35% saings) Enhanced cost plus benchmarking to ensure pricing accountability and alue payments Presered Plan Assets Established a sustainable reimbursement model SUSTAINABILITY Oerall Saings of: $609,155 or 16.3% of Total Cost HST HST All RightsResered Resered Confidential

8 Typical Renewal Inflation: Fully-Insured of 12% s. Self-Funded of 8% s. RBP tracking Medicare at 1%. INCEPTION tt Trend Oer Time YEAR-1 YEAR-2 YEAR-3 YEAR-4 Fully-Insured 400, , , , ,407 Self-Funded 400, , , , ,195 RBP 400, , , , ,241 FULLY- INSURED SELF - FUNDED RBP 650, , , , , , , ,000 INCEPTION YEAR-1 YEAR-2 YEAR-3 YEAR HST HST All RightsResered Resered Confidential

Saed an additional $1,446,565 Implemented a PEPM of $7.

9 RBP Plan Comparison Client Profile and Situation 1400 Employee self-funded group Based on 12 months of paid claims Preious endors fees on percentage of billed charges of 12% for all claims HST Inolement Reduced endor fees by 90% Fee Comparison Percentage of Billed Charges Per Employee Per Month Billed Charges $13,417,794 $13,417,794 Saings $9,602,708 $9,602,708 Fees $1,610,135 $163,570 Saed an additional $1,446,565 Implemented a PEPM of $7.50 (including prepricing) Experienced 2% Outlier claims paid at 14% with fee cap applied Client Benefits Reduced endor fees Decreased Stop Loss premium $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 SUSTAINABILITY Annual Fees % Of Billed Charges PEPM Achieed lowest claims cost HST HST All RightsResered Resered Confidential

10 The HST Solution Pricing proided prior to care deliery such as knees and hips RBP Prepricing Naigator HST s unique, collaboratie model integrates pricing into the pre-authorization process setting the pricing of medical serices before they are deliered. Well-suited for electie admissions and high-frequency serices Unique approach is collaboratie and proider-friendly Benefits Deliers expected reimbursements prior to rendering care Mitigates member balance billing Accurate price estimates based on procedures and diagnosis Timely turnaround and integration with the pre-authorization process Transparent upfront communication with proiders HST HST All RightsResered Resered Confidential

MedWatch s Nurse Naigator A National Solution offering members freedom to select proiders of their choice using a unique Reference-Based Pricing strategy powered by HST Integrated RBP health plan

estimated reimbursement rate prior to admission Open access to choose facilities Full transparency with reimbursements tied to Medicare or cost information Additional saings on stop loss premiums

13 MedWatch s Nurse Naigator A National Solution offering members freedom to select proiders of their choice using a unique Reference-Based Pricing strategy powered by HST Integrated RBP health plan that deliers an expected reimbursement prior to rendering care through precertification RBP health plan that integrates medical management through the precertification process and proides an estimated reimbursement rate prior to admission Open access to choose facilities Full transparency with reimbursements tied to Medicare or cost information Additional saings on stop loss premiums Collaboratie, proider-oriented approach Robust patient adocacy program handling member inquiries and proider outreach and re-direction Proides member/patient communication and customer serice Supports a PCP Network

shopping Informed Buying Quality Outcomes

14 Our Approach Payer Transparency Cost up Medicare Geo Specific Prompt pay Collaboration Proiders Accountability Proider reimbursements Network Calibration Accountable care - (P4P) Value based care Empower Comparison shopping Informed Buying Quality Outcomes Mobile Consumer HST HST All RightsResered Resered Confidential

15 Benefits of RBP Transparency Accountability RBP reduces the following: Claims cost Stop loss premiums Network access fees Employee plan cost RBP is a cost-up reimbursement that applies Medicare plus factors to ensure fair & reasonable proider payments; Sustainability Predictability Value RBP s fix fee model proides sustainable long term alue driing to the lowest claims & plan cost; Ties the Plans medical price index to Medicare inflation factors of 1%-2% ersus 5%-15% for alternate funded plans; RBP bends the cost cure downward with alue based payments. THE WAY WE DO HEALTHCARE HST HST All RightsResered Resered Confidential

16 Patient Adocacy Center (PAC) Member Protects And Guides Draft Member Letters Proider Explains Reimbursement Reiews Plan Language Inquiries Handled By PAC Negotiate Agreement Proider Communications Letter Communications HST HST All RightsResered Resered Confidential

17 Find What s Right For You RBP Negotiations THE HEALTHCARE Out-of-Network Claims Wrap Network Claims Pre-serice PPO Claims RBP Health Plan Hospital PPO replacement Turnkey RBP Solution Patient Adocacy Center Outlier Negotiations Serices RBP Analytics RBP Payment Impact Analysis RBP Claims Analysis Network comparison Consumer App Compare pricing by procedure Find a Proider/Facility View Member Info HST HST All RightsResered Resered Confidential

Conduct a demonstration RBP Claims Analysis, seeing is

18 Discussion Q & A What do you see as the potential opportunity? What serice(s) best meet your needs? Conduct a demonstration RBP Claims Analysis, seeing is belieing? T HST HST All RightsResered Resered Confidential

HALF YEAR RESULTS H September 16th, 2014

HALF YEAR RESULTS H September 16th, 2014 HALF YEAR RESULTS H1 2014 September 16th, 2014 Today s Presenters Fabio Cannaale Francesco Signoretti Gaspar Santonja Founder and Chairman CEO CFO p.2 Key Highlights Continuous growing olumes in a more