1. AEGIS THERAPIES RESPONSE TO EVOLVING CARE DELIVERY ENVIRONMENT 4.29.15 EMERGING WORLD OF POST-ACUTE CARE (PAC) THERAPY PROVISION

2. REIMBURSEMENT SHIFT Traditional pay for services shrinking annually as more potential patients need services 2

3. CMS # 1 Priority is Post Acute Care (PAC) 40,000 beneficiaries exit hospitals daily 40% over-utilization of SNF days 80% of Medicare Reimbursement in PAC $62B Annually $31B SNF - $18B HH - $13B - LTAC 3

4. REIMBURSEMENT SHIFT Experiment Trends Patient-centric Patient-centric Value-based Value-based Collaboration Collaboration 4

5. LENGTH OF STAY CATEGORYDIAGNOSIS Sub Acute GOAL - LOSSub Acute MEDIAN - LOS CardiologyHeart Failure9 to 16 days20 days Infective Endocarditis11 to 20 days22 days Myocardial Infarction10 to 17 days20 days Syncope10 to 17 days20 days OrthopedicsAnkle Dislocation11 to 20 days27 days Ankle Fracture12 to 20 days26 days Back Pain10 to 17 days20 days Cervical Spine Surgery9 to 15 days20 days Femur Fracture13 to 24 days30 days Foot: Transmetatarsal Amputation10 to 18 days21 days Hip Arthroplasty7 to 12 days14 days Hip Fracture, Open Repair14 to 23 days28 days Knee: Amputation Above or Below Knee13 to 23 days29 days Knee Arthroplasty7 to 10 days12 days Knee: Fracture of Tibial Plateau12 to 20 days25 days Lumbar Spine Surgery7 to 12 days14 days Pressure Ulcer Closure25 to 39 days39 days Tibia/Fibula Fracture11 to 21 days27 days

6. PATIENT EXPERIENCE 6 Patient: Violet DRG: Hip & Femur procedures w/o complications Target Cost: $30,237.77 Patient: Henry DRG: Hip & femur procedures w/ complications Target Cost: $33,726.18

7. PATIENT EXPERIENCE - GOALS 7 Patient: Violet DRG: Hip & femur procedures w/o complications Target Cost: $30,237.77 Independent ADL & driving prior to surgery. Goal = Transition home w/ son, continue w/ HH Patient: Henry DRG: Hip & femur procedure with complications Target Cost: $33,726.18 Independent ADL & driving prior to surgery. Goal = Transition home w/ wife, continue w/ HH.

8. PATIENT EXPERIENCE – THE RESULT 8 Patient: Violet DRG: Hip & femur procedures w/o complications Target Cost: $30,237.77 1/17/14 – 2/8/14: SNF (22 days) $11,584.76 2/10/14 – 4/10/14: HH (16 visits) $3,277.44 Patient: Henry DRG: Hip & femur procedures with complications Target Cost: $33,726.18 1/20/14 – 1/25/14: SNF (5 days) $2,400.51 1/26/14 – 1/29/14: Hospital (3 days) $5,921.08 1/29/14 – 3/14/14: SNF (44 days) $24,712.70 3/15/14 – 4/19/14: HH (15 visits) $3,222.06

9. THE RESULT – FINANCIAL IMPACT 9 Patient: Violet DRG: Hip & femur procedures w/o complications Target Cost: $30,237.77 Actual Cost: $15,812.52 Cost Variance: $14,425.25 1/17/14 – 2/8/14: SNF (22 days) $11,584.76 2/10/14 – 4/10/14: HH (16 visits) $3,277.44 Patient: Henry DRG: Hip & femur procedures with complications Target Cost: $33,726.18 Actual Cost: $36,709.57 Cost Variance: $4,983.39 1/20/14 – 1/25/14: SNF (5 days) $2,400.51 1/26/14 – 1/29/14: Hospital (3 days) $5,921.08 1/29/14 – 3/14/14: SNF (44 days) $24,712.70 3/15/14 – 4/19/14: HH (15 visits) $3,222.06

10. ACCOUNTABILITY 10 CONTROL INFLUENCE CONCERN

11. ACCOUNTABILITY 11 SNF HH OP

12. VISION – HAPPENING NOW Patient-centric Patient-centric Value-based Value-based Collaboration Collaboration Aegis believes the future makes sense. How do we prepare to be the best at it, as soon as possible? 12

13. PROCESS High-touch patient and provider engagement to drive improved outcomes at lower cost. 13 Embrace reality

14. RESPONSE What will change?  Still provide highly skilled rehab services  Determine transition plan by Day 3  Communicate with previous care setting in order to begin where they left off  Collaborate with next care setting to know what patient will need  Assess health literacy of pt./family & provide training  Follow up w/ pt. after transitioning from PAC setting 14

15. SCOPE OF PRACTICE / GOAL SETTING Therapy Scope of Practice Current: Treat most underlying impairments and functional deficits identified during evaluation. New World: Treat underlying impairments or functional deficits necessary to move patient to next transition. Goal Setting Current: Goals set at highest level patient seemingly can achieve. New World: Goals set at level patient needs to attain in order to achieve next transition safely. 15

16. PREDICTING CHANGE From Day 1, therapy education is two-fold: on patient and family. By Day 2 of admission, IDT team must have same understanding of LOS and transition environment (home) Home visit completed by Day 3, on-site with patient or potential for “virtual home visit”. 16

17. REHAB ENHANCEMENT Frequency and Intensity With multiple co-morbidities, frequency of therapy needs to be 7 days per week Intensity is based on clinical need to prioritize goals for the transition point 17

18. TRANSITION ENVIROMNMENT DETERMINATION NEW WORLD Obtain information about next care setting: Physical home visit with patient Virtual home visit - aide visit home to take pictures or short videos Virtual home visit – family/friends take pictures or short videos of home, take measurements, fill out checklist, etc. Communicating with providers in transition environment. 18

19. AVOID DECLINE POST-TRANSITION NEW WORLD Decline in function post-transition – heavily scrutinized. High-touch interaction. Train family on strategies to maintain functional level. Enhance collaboration with resources outside usual group. 19

20. THERAPY SCHEDULE NEW WORLD Trends toward shorter LOS continues. Creates need to increase rehab hours during day AND across more days during week. Greater need for immediate evaluations. “Traditional” SNF rehab hours (Mon-Sat) must expand to 7 days. Must address late day admits 20

21. PAYOR-SPECIFIC GUIDELINES Third party payers have specific coverage guidelines Understand the various benefits, so that Right Patient Right Time Right Discipline Right Setting 21

22. ACO’s ARE WATCHING & MEASURING ACO’s measuring SNF performance. Measuring timeliness of nursing & therapy evals Measuring intensity of services Measuring transition time from SNF to next level. 22

23. AEGIS TRANSITION Work with partners and customers to grow ACO relationships and “collaborative” possibilities Maintain a constant “pulse” on the changing regulatory environment Ongoing training - therapy staff 23

24. NEXT STEPS Partner with NHA on how to introduce concepts to facility. Is SNF experiencing new expectations? (i.e. payers driving shorter LOS and transition to next level, pt’s demanding earlier transition?) Timelines? Level of detail? Target audiences? 24

25. SUMMARY Reduction of SNF costs CMS priority. PAC to reshape delivery of care with quicker transitions. ACO measure SNF key performance indicators PAC sites will be rewarded on alignment and efficiency. 25

26. Questions