Sentient Medical Systems Health Tech Net Meeting December 14,

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 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 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. 18