AGL Hospital Consulting

The Problem:
Inconsistent Cash Flows

• Identified by hospital executives as their number one financial concern.
  

The Approach:
A/R Funding Approach

• Specialized commercial funding and collection services to hospitals and other  healthcare providers regardless of credit ratings
  

• CMS is different from other healthcare finance companies in that it bills and collects the invoices purchased
  

• The combination of a billing and collection company with a capital partner allows CMS to scrub claims and pre-clear invoices for electronic payment for most major insurers while improving collection times, outcomes and cycles
  

• Purchase price of commercial A/R is competitive vs. Factor/Banks/Finco’s
  

• Structure is a True-Sale and therefore off-balance sheet and non-recourse
  

• Clients have the opportunity to reduce billing and collection costs while improving overall collection rates by 10-15% over 2 years
  

• CMS will share 50/50 with the hospital on every dollar of improvement in cash collections and historical collection rates.
  

The Mechanics:
How CMS provides Cash to the Hospital

• Hospital submits a batch of commercial insurance claims on daily basis
  

• CMS agrees to purchase 100% of all clean commercial insurance claims for 1 year at up to 80% of Historical net Patient Collection Rate ("HCR")
  

• CMS processes claims and notifies the medical insurance company to submit payment to our Lockbox
  

• CMS monitors cash collections of billings
  

• Posts lockbox receipts against claims purchased
  

• Returns and agreed % of collections in excess of Purchase Price to the hospital
  

• Maximizes contract reimbursement provisions which results in an improvement in overall HCR
  

• Hospital and CMS share in improved HCR
  

$100 Batch Example

Improvement in HCR:
Cash and Productivity Improvements

• CMS Clients benefit from accelerated cash flow and the elimination of billing and collections costs while reducing coding errors, improper reimbursements and rejected claims
  

• These savings are significant as most providers pay between 5%-15% to outsources collections and substantially more to maintain an in-house, central billing office with added employee costs
  

• CMS will share 50/50 in improved HCR collection rates
  

• Participation in the overall improvement of the hospitals collection rates creates an alignment of interests between CMS and its clients
  

The Competition:
Debt vs. Off-Balance Sheet

CMS is unaware of any other joint venture between a billing and collection company and funding source that provides liquidity, improved collection rates and opportunity to reduce operating costs

Target Hospitals and A/R:

• >$7mm per year in contract commercial insurance billings
  

• All hospitals regardless of credit ratings
  

• Private HMO, PPO, POS and Indemnity A/R
  

Transaction Process:
~ 4weeks from term sheet to 1st claims batch submission

• Provide CMS with Opportunity Assessment Data:
  

*   Last 2 years of audited financials and projections

*   Interim financials

*   A/R and billing data for determination of HCR

• Preliminary Term Sheet and Underwriting Deposit subject to:
  

*   Ability to obtain clear title and/or first priority interest in commercial     insurance claims
*   Tax, lien and judgment searches

• Agreement on Final Term Sheet
  

• Execution of A/R Purchase Agreement