Sales Representative Training Guide

Thank you for participating in the Ancillary Advantage Sales Representative Training Program This training guide provides the core information for understanding how the Ancillary Advantage program works and how you can best sell the program Before beginning, you should have reviewed the following: Ancillary Advantage Customer Presentation Ancillary Advantage Online Brochure MyAncillary Overview Video Whitepaper – “DME – The Cost of Getting Paid” Whitepaper – “Evaluating the Cost-Benefit of a DME Practice Management Company”

For manufacturer’s reps, let’s get the elephant out of the room: What does “Manufacturer Neutral” mean and how does that effect the relationships we have with our reps? “Manufacturer Neutral” is a strong selling point for our program. Even if a practice only buys from a single manufacturer, they like the idea of not being sole sourced For Ancillary, what it means is that we do not promote one manufacturer over another in our customer relationships However, when we work with a manufacturer’s rep, such as yourself, you drive the product relationship with the account In other words, we will not sell another manufacturer against you Should an account want to use another manufacturer’s product, you can offer them that product through Ancillary Advantage – the other rep doesn’t need to be involved. And, you earn a commission on Ancillary’s management fee even when the practice uses a competitor’s product

The Ancillary Advantage Elevator Pitch Ancillary Advantage puts doctors in the business of dispensing and billing for orthopaedic bracing Instead of giving a patient a prescription and sending them to an O&P store down the street, the doctor’s staff can fit the brace from their inventory and then bill and collect for it As a result, patients are more satisfied and compliant with their doctor’s orders And, an individual doctor can add $20-$50,000 per year to their bottom line

Our Value Proposition $100,000 net profit for a 5 physician stock-and-bill practice. $42,000 additional net profit for the same practice already running a DME program. How do we do it? Focus We make sure the practice is taking advantage of dispensing DME whenever possible. Even complex braces, which often times get referred out by DIY practices, are supported by our program. And these complex braces represent excellent reimbursement opportunities. Collections We don’t send a claim out that hasn’t been scrubbed for compliance. As a result, we collect 95% of allowed charges. A DIY practice, if they even know their collection percentage, is in the 75-80% range. How do we do this? It begins with our software, MyAncillary, which automatically generates pre-certification alerts and prompts for required documentation. It ends with our revenue management team in Canton. All they do is bill and collect DME and they have been doing it for more than 10 years.

The Ancillary Advantage Program Our services include: Staffing Product Sourcing Revenue Management Program Management, including: Oversight of Daily Operations Compliance Product Selection

The Pieces of the Ancillary Program Staffing (leased employees) – the DME Coordinators. We recruit, train and oversee these individuals. We cover their benefits, continuing education, professional liability insurance, etc. We charge the practice for the direct salary cost of the employee plus the cost of their benefits. We do not charge an administrative fee Product Sourcing – we sell products to the practice at our product acquisition cost. We have over 130 manufacturers in our product catalog Revenue Management Two levels of service: Pre-certifications, compliance support and consulting Turnkey revenue management – we handle precerts, compliance support, consulting and billing and collections Program Management – In addition to on-site DME Coordinators, each practice is managed by an Area Manager who is responsible for the day-to-day operations of the DME practice MyAncillary Practice Management Software

Not every practice wants or needs a turnkey program Staffing - they may already have personnel that can be utilized as DME Coordinators Revenue Management - they may already have a strong billing and collections department or they don’t want to give up total control over the program We will break out the staffing and revenue management components. The most common alternative configurations are: Turnkey program but the practice does the billing and collections Turnkey program but the practice does the billing and collections and provides the employee from their own staff If they provide their own employee, the must acknowledge the importance of that employee focusing on the DME program. For five physicians, its not a part time job

How Does the Ancillary Program Work Out For the Practice? For a five physician practice: If they are currently doing nothing with DME, or a stock-and-bill, the Ancillary program can add $100,000 to their bottom line If they have an average performing self-managed DME program, the Ancillary program can add $42,000 to their bottom line. How? More product dispensed – typically 34 units per physician per month vs. 23 in a self-managed program More profit per product – typically about 10% better profitability due to improved pricing, product selection, inventory control and collections performance Our whitepaper, “Evaluating the Cost-Benefit of a DME Practice Management Company” details these calculations Billing and collections efficiency – we collect 95% of every allowable dollar. And we don’t dispense products that aren’t going to be paid for

Paid to Ancillary Advantage A Closer Look at the Financials The table below shows the financials for a 5 physician practice performing at Ancillary’s book-of-business average collections of $55,000 per physician Per Year Paid to Ancillary Advantage Collections $277,236 Product Cost $83,171 Invoiced at Ancillary’s acquisition cost Gross Profit $194,065 Ancillary Management Fee $48,516 25% of Gross Profit DME Coordinator $39,658 Direct cost only – no administrative markup Practice Net Profit $105,891 Sales Commission Opportunity Sales Rep commissions are calculated off of Ancillary’s management fee – in the case above, $48,516 x 10% = $4,852 annual commissions Assuming you are already earning 20% commission on product sales, Ancillary increases the total commissions on an account by 30%: Product Commissions $16,634 ($83,171 x 20%) Ancillary Commissions $ 4,852 Total Commissions $21,486

How Much Does the Ancillary Program Cost the Practice? The practice pays for the products The practice pays for any DME Coordinators provided by Ancillary The practice pays Ancillary’s management fee as follows: The management fee is calculated as a percent of practice gross profit. Practice gross profit equals collections less product cost. The management fee percentage is set at: 25%, if we are providing a turnkey program, which includes product sourcing, all revenue management services, MyAncillary and program management 15%, if we are providing the above services but the practice is doing the billing and collections

Who are we selling to? At the market level: Orthopaedic physician groups Sports medicine physician groups Orthopaedic departments of hospitals and healthcare clinics Our “sweet-spot” account is a physician group with 5-15 physicians. These groups are: Big enough to support a DME Coordinator who drives the program Small enough to not have an existing DME department that may already be running a high performing DME program or would see what we offer as a threat to their job security

Who are we selling to? Understand the practice environment and the practice players What are they doing today? Nothing – should be a good opportunity but why are they doing nothing? Some doctors are opposed to being in any business other than being a physician Stock-and-bill – the manufacturer is making the money so this should be an excellent opportunity but be careful of relationships – stock-and-bill reps are sometimes seen as part of the practice family. And be ready for the stock-and-bill manufacturer to swoop in with a physician-owned program of their own Self-Managed – our Practice Profile Worksheet is going to help define the opportunity Who is making the decision? The Doctors – the best people to get the ball rolling.  Doctors have the most to gain from implementing a DME program.  A Practice Manager is much more likely to engage in the process if the interest comes from the doctor first. Keep your eyes out for the doctor who “has a friend”, i.e. a competing rep The Practice Administrator – can either be a huge proponent of our program or the biggest obstacle to overcome.  A practice administrator is typically overloaded with work and can view implementing a DME program as something the practice doesn’t have time for The DME staff – “know your audience” is the key here. We can be viewed as a godsend or as a threat to their job. .  It is important to identify whether the DME staff is employed by the practice or working for another company. We never want to alert the competition that we are looking to take their business

We don’t make money until the practice makes money Who are we selling against? Manufacturer Programs – These programs don’t provide staffing and don’t do billing and collections. They teach the practice how to do it themselves. It still comes down to the dedication of the practice to make the program work Consultants – typically charge a fixed fee, either one-time or on a monthly basis to teach the practice and then periodically review program performance With both of these competitors, they make their money whether or not the practice makes money Ancillary Advantage charges a management fee when collections are received We don’t make money until the practice makes money

Information Gathering The Selling Process Your job is to identify, cultivate and qualify prospects within your territory Our job is to work with qualified prospects, close and implement the account Prospecting Introduce Program Information Gathering Qualified Prospect Closing Practice Pro Forma Sales Cycle Contract Signed Implementation Due Diligence Implement Go Live

What is a Qualified Prospect? At least 3 physicians, prefer 5 or more Decision maker(s) have been identified, Ancillary program concept has been introduced and they are interested Decision timeframe is estimated as 6 months or less There are no contractual obligations with another company preventing a sale We have summarized the practice’s top three motivations for buying our program, i.e. make more money, inventory control, etc. The concept of a dedicated DME Coordinator has been discussed and the practice acknowledges the need The decision maker(s) have completed the Practice Profile Worksheet

Engage our support: you qualify – we close Sales Obstacles Relationships with other sales reps – many practices have strong relationships with their DME providers that have been built over years.  Often times it is hard to penetrate these relationships to get a fair shot at earning a practice’s business Existing DME contracts – some practices use the fact they have an existing DME contract as an excuse to avoid conversation Practice Managers/Administrators – can be the biggest obstacle to overcome in the sales process.  Many administrators don’t want to undertake a “large” project.  They are often the most resistant to change in the practice Engage our support: you qualify – we close

Sales Support Ancillary Advantage provides the following resources to support the sales process Territory Sales Support Specialist - this individual is your primary point of contact with Ancillary Advantage. They are a member of the Ancillary sales team and can assist in training, presentations and engaging other Ancillary resources. Once you have qualified a prospect, the prospect is handed off to the Territory Sales Support Specialist, who is responsible for closing the account Area Manager – an Area Manager has operational responsibility for a book of business within a geographic region. As necessary, the Territory Sales Support Specialist will engage the Area Manager to support the sales process and to ensure a smooth transition into the implementation phase Sales Tools – we have an variety of printed and online tools that can be used during the sales process. These are further described on the next few pages

Sales Tools

Click button to Login/Logout Once logged in, Sales Home link appears in right menu bar Sales Website We have consolidated all sales and marketing materials on our corporate website at www.ancillaryadvantage.com You must be logged in to access Sales Home. Ancillary will provide you with a username and password. Password is also used as the access code for the Value Calculator

Sales Tool Summary Quick Start Materials Collateral Leave-Behinds Ancillary Revenue Opportunities in Orthopaedic Bracing The Path to Qualifying a Prospect Collateral Leave-Behinds Tri-Fold Brochure Flyer – Don’t Let Your Profit Fly Out The Window Flyer – CMS Split Codes Whitepapers DME – The Cost of Getting Paid Evaluating the Cost-Benefit of a DME Practice Management Company MyAncillary Online Demo Value Calculator State Regulatory Guides Practice Profile Worksheet

Quick Start Materials Ancillary Revenue Opportunities in Orthopaedic Bracing A quick and basic slide show of what the opportunity is and what Ancillary Advantage brings to the table The Path to Qualifying a Prospect A highlighted guide showing how you can take a prospect through the process of introducing and understanding the Ancillary program using the collateral and sales tools available

Collateral Leave Behinds Sales Tools Collateral Leave Behinds Print from website or request press-printed copies

Value Calculator Sales Tools Allows you to demonstrate program potential while sitting in front of customer Calculator uses actual data from Ancillary’s book of business Fill in the form with practice specific information, press calculate An access code is required. Once submitted, form to the right will be displayed Accessible from right menu bar of website

Value Calculator Sales Tools Results are immediately displayed, including footnotes A copy is emailed to you which you can forward to practice

Sales Tools Whitepaper – “Evaluating the Cost-Benefit of a DME Practice Management Company” Compares a self-managed to a managed program as offered by Ancillary Advantage Calculates the average per product net profit between a self-managed program and an Ancillary managed program – Ancillary program is $5.14 or about 10% more profitable Takes into account the improved utilization of an Ancillary program and calculates an annual net profit improvement of $42,000, or 67% All calculations are footnoted and referenced Page 1 Page 2

Whitepaper – “DME – The Cost of Getting Paid” Sales Tools Whitepaper – “DME – The Cost of Getting Paid” How much is it really costing to bill and collect a DME claim? A proof statement for the value of our billing and collection service – we charge 10% of gross profit – whitepaper shows its costs a DIY practice a minimum of 11.3% Data from the American Medical Association’s Practice Management Center is presented to calculate the average claim collection cost ($11.31 per claim) Use the excess cost matrix to calculate the collection cost a practice is incurring above the Ancillary Advantage benchmark of a 95% collection rate and $11.31 cost per claim Page 1 Page 2

MyAncillary Demo Sales Tools Demo conducted online, 30-60 minutes Requires access to computer and internet GoToMeeting session with Ancillary team Can provide an opportunity to get an in-depth understanding of practice requirements

State Regulatory Guides Sales Tools State Regulatory Guides Page 1 covers federal and state specific regulatory and reimbursement requirements Page 2 addresses key compliance requirements in the Medicare DMEPOS Supplier Standards Page 1 Page 2

Practice Profile Worksheet Sales Tools Practice Profile Worksheet Worksheet is completed as part of the lead qualification process Fill out as much information as possible and we will use it to create a more detailed pro forma estimate of financial potential This is a PDF-fillable form that can be filled out online, saved and emailed

What’s Next? Test your knowledge with our online quizzes Request collateral materials Contact your Territory Sales Support Specialist Schedule a ride along Practice your sales pitch Prospect, sell, close!