1 1 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) The contents of this presentation are confidential and proprietary to SUNRx and MedImpact Healthcare Systems, Inc. and may contain material MedImpact considers Trade Secrets. This presentation may not be reproduced, transmitted, published, or disclosed to others without prior written authorization from SUNRx and MedImpact Healthcare Systems, Inc. © 2013 MedImpact, Inc. All Rights Reserved. 340B. Simplified.

2 2 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Defining 340B Created in 1992 to: o Expand access to affordable medications for low-income patients o Enable hospitals to stretch their resources to provide more comprehensive care for the uninsured population Eligibility: o Entities (must be non-profit) Federally Qualified Health Centers, Disproportionate Share Hospitals, Critical Access Hospitals, Children’s Hospitals and others o Medications Outpatient drugs only o Patients Only patients of covered entities Oversight Responsibility: o Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA)

3 3 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) The SUNRx 340B Solution Reporting & Compliance Virtual Inventory Management Plan Design Complete 340B Management Solution Plan Design Program Marketing Contract Pharmacies Patient Eligibility

4 4 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Patient Definition HRSA Patient Eligibility o The covered entity has established a relationship with the individual, such that: 1.The entity maintains records of the individual's health care 2.The prescriber is either employed by the covered entity – OR 3.The prescriber provides health care under contractual or other arrangements (e.g., referral for consultation) 4.The responsibility for the care remains with the covered entity o Outpatients Only

5 5 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Data Elements Obtained to Determine Eligibility Eligible Service Areas o SUNRx will identify the hospital’s outpatient (OP) service areas that are on the Medicare Cost Report—used to code the VI system. Eligible Events o SUNRx will establish a real-time feed of the hospital’s ADT system to document patient visits to the hospital. Eligible Timeframe o SUNRx will assign the script an appropriate capture time frame based on the establishment of an Eligible Event (i.e., one year) and the provider type. Eligible Providers o SUNRx will obtain a list of hospital providers who are classified as employed, contracted or credentialed, and determine their exclusivity to the hospital. This determination will be used to define SUNRx’s prescription capture rules. Eligible Pharmacy o SUNRx will obtain data on all prescriptions filled for hospital patients at the contract pharmacy (either retrospectively or in real time.)

6 6 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Contract Pharmacies Hospitals may set up a contract pharmacy network to serve their patients: o Contract pharmacies (all types) supplement your outpatient pharmacy o Convenient pharmacy locations to expand access to the Self-Pay population o Working with a pharmacy chain will create efficiencies and greater access Pharmacy Contracts o Serves both cash and third-party patients o Paid a dispensing fee (prefer fixed), and drugs are “replenished” by the hospital (bill-to, ship-to) o Strict diversion and inventory control management

7 7 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) 7 © 2013 SUNRx and MedImpact Healthcare Systems, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) How it Works: Prescription Processing Third-party Claims Capture claims Confirm eligibility Adjudicate to MedImpact / SUNRx Contract Pharmacy Adjudicate to third-party PBM Cash Claims Opportunity Savings Covered Entity Adjudicate to MedImpact/SUNRx Determine eligibility Loaded 340B Network U&C Confirm lowest cost

8 8 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) 8 © 2013 SUNRx and MedImpact Healthcare Systems, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Net Benefit for Hospital Net Benefit Third-party Benefit Example Copay Third-party Reimbursement

9 9 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) 340B Virtual Inventory

10 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Registration Period Start Date October 1 st – 15 th January 1 January 1 st – 15 th April 1 April 1 st – 15 th July 1 July 1 st – 15 th October days Minimum (Up to 210 days) HRSA Registration Period (15 days) Contract the Pharmacies (30 days) Implementation Period (75 days) Wholesaler Setup (60 days) Q1 Implementation Timeline Q2 HRSA Active Date HRSA registration periods: – New covered entities – Off-site facilities – Contract pharmacies 340B Facility and Pharmacy Registration

11 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) 340B Guidance HRSA Audits o HRSA conducts audits to assure entities are: Preventing diversion of 340B Drugs (use only for eligible patients) Preventing duplicate discounts (Medicaid rebate + 340B discount) Maintaining readily auditable records Adhering to the GPO and Orphan Drug Exclusions Internal Audits o HRSA expects entities to perform annual “independent” 340B audits o Self Audits—random audits of contract pharmacy claims o Self-Reporting of program violations to HRSA Annual Facility Recertification—Entities should: o Assure that contact information is up to date on the HRSA website o Make sure OP facilities are registered with HRSA o Facilities are on their Medicare Cost Report o Contracts are in place and annual audits are conducted

12 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Helpful Self-Audit Information 340B Audit information ontent&Ntt=audit Sample Self-Audit Process for Rural Hospitals Hospital_340B_Compliance_SelfAssessment_DataTransactions.pdf Sample Self-Audit Process for DSHs 340B_Compliance_SelfAssessment_DataTransactions.pdf 340B_Compliance_SelfAssessment_DataTransactions.pdf

13 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Monitoring and Compliance Every transaction should be tracked, creating a fully auditable records: o Eligibility o Medication dispensing history o Reversals, re-bills o Replenishment orders o Pharmacy Receipts Program Performance Monitoring: o Captured claims by pharmacy o Program utilization o Financial performance Compliance Reporting Dashboard Monitoring

14 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Maintenance of Auditable Data Eligible patients Eligible events at the hospital Eligible providers (by type) Captured claims from eligible pharmacies Reviewed and accepted ICD-9 matched claims Wholesaler orders placed for drug, at each contract pharmacy Pharmacy receipt of replenished drug Documentation of all “blocked” Medicaid claims Results of financial reconciliation

15 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Important websites 340B Prime Vendor Program (Apexus) o Office of Pharmacy Affairs o

16 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Searching for Covered Entity

17 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Searching continued

18 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Marketing Your Program

19 © 2013 SUNRx and MedImpact, Inc. All Rights Reserved. Confidential, proprietary and possible Trade Secret of SUNRx and MedImpact (See Slide #1) Re-Investing Resources Build clinics to help serve the indigent population Fully supporting Free Clinic that lost federal funding (savings passed along to patients) Maintain patient assistance program which includes subsidy for discharged script from ER (designated time frame) Programs that bring care to the patients which is essential to health (patient has minimal means to travel) Contract with pharmacies in remote areas that provide home delivery to patients at no additional cost Increase in discussions around full subsidy indigent programs