Accounting & Finance Department Overview Presented by: Tiffany Smiley, Director of Accounting Emmy Nteziryayo, Director of Finance Chad Osborn, Senior Financial Analyst

Accounting & Finance Emmy Nteziryayo Tiffany Smiley Gina Singleton Director Financial Accounting & Reporting Tiffany Smiley Director of Accounting Gina Singleton Accounting Administrator Kimberly Davis Accounting Manager Mary Ann Crouch Sr. Accounting Manager Chad Osborn Sr. Analyst Julie Gervais Accounting Manager Laura Weimar Sr. Accountant Brittany Meredith Sr. Accountant Jordan Perry Sr. Accountant James Everett Staff Accountant

Accounting Team What we do Key Objective: To ensure accurate and timely delivery of financial results presented in accordance with GAAP to our customers Customers: Executive Team Operational and Clinical Leaders Board of Directors Investors Government and Regulatory Authorities Auditors

Accounting & Finance Team Challenges Rapid pace of acquisitions & integration work, scale from 14 states, 32 provider markets, 65 locations in Q3-2014 to now 31 states, 96 markets, 151 locations Systems and process improvement projects had to be paused GL & AP system conversion Jan-2016 Financial close and reporting data must be sourced currently from 7 clinical/billing systems Cerner, HCHB- 2 instances, Consolo, Carevoyant, Allscripts, EZ Claims and various other systems and third parties Workday, Cowan (benefits), other vendors, 3 separate banks

Month-end Financial Close Cycle Day 3: Accounts Payable close Day 4: Billing Team close Days 5 – 8: Accounting Team books revenue into GL from billing systems. Days 4 – 8: Accounting Team accrues any expenses that AP was not able to post in time. Days 9 - 10: FP&A and Accounting review key line items at program level to determine if adjustments need to be made. Day 11: Financials presented to CFO & Accounting completes close. Day 12: Results overview to Executive Team. Finance distributes financials to operational leaders. Days 13-14: Operational financial review meetings

Accounting Team Goals for 2017 To consistently hit the delivery target for distribution of financials and accelerate the close process Continued improvement on program level analytics in coordination with the FP&A Published Accounting resources and guidance on iConnect “Who to Contact” list on iConnect

Accounting Methodology Adhere to GAAP Generally Accepted Accounting Principles Difference between Accrual Basis and Cash Basis Accounting? The main difference between accrual and cash basis accounting is the timing of when revenue and expenses are recognized. The cash method accounts for revenue only when the money is received and for expenses only when the money is paid out. The accrual method accounts for revenue when it is earned and expenses goods and services when they are incurred. The revenue is recorded even if cash has not been received or if expenses have been incurred but no cash has been paid. Accrual accounting is the most common method used by businesses.

Common Questions How do Accruals impact my financials? Accruals are either an estimate based on a defined methodology or an actual invoice that was provided after AP close. Accruals will always reverse out the next month and the actuals will show up in the next month’s financial statements. When an invoice posts to my financials, when is it actually paid? When AP keys an invoice to your P&L, that does not necessarily mean the invoice has been paid. This only means that AP has keyed the expenses, and it has been added in the queue to pay. We pay vendors based on agreed terms (Net 10, 30, 45, etc).

Financial Planning & Analysis Team What we do Main objective: Provide the data you need in order to make informed decisions and show you a path towards achieving your targets. Information available today: Financial Reports Business Intelligence Tools Financials Reports BI Tools Revenue drivers KPIs Revenue adjustments Labor tool Direct / variable costs Forecast templates Indirect / fixed costs Quality metrics Statistics and ratios

2017 Income statement Overview – Program x

KPI Summary Category KPI Detail Regulatory Discharge ALOS Average / Median / % > 180 Days Discharge LOS by SOC Home / NH / ALF / Inpatient BP1 Admissions Cap Cushion / (Liability) Quality Visit Duration By discipline Productivity # of visits per FTE (by discipline) Patient Utilization Weekly visits per Patient (by discipline) Growth ADC by SOC Admissions by SOC ADC / Admission Ratio # of Referral Admissions Conversion Rate / Admits per HCC Financial Revenue Per Patient Day Revenue Adjustments Write-offs / Cap Liability / Charity Care Adjustments Margin %ages Pt Care costs / G&A costs / margin % of revenue Miscellaneous Diagnosis Mix (Admissions) Kidney / Liver / Cancer / Lung / Heart Discharges Deaths / Live (Eligibility, Revocations/Transfers)

Task – Program A vs Program B Which program is performing better: Compare operating margins (consider rate differences) ADC / Admission ratios Main call outs by comparing the summary KPIs: Discharge ALOS and ADC / Admit ratio correlation Growth – factors driving ADC increase or decline Sales productivity Admissions by diagnosis and referral sources Death discharge % Task: Identify opportunities of increasing margins / areas of concern Program A Program B

Collaboration – Partners in Success Accounting & Finance KPIs Financials Bi-directional feedback Operational Leaders

Collaboration – Your input How can we help you achieve your goals and objectives? What else do you need? How can we help you get it? What is it worth?