Advancements in Telemedicine and Intra-operative Monitoring: A Comprehensive Overview

1. Sentient Medical Systems Health Tech Net Meeting December 14, 2007 1

2. 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

3. 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

4. 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 75-80 full time technologists with 5 reading physicians plus CMO (MD, PhD) 4

5. 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

6. 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. 2000 cases annually 6

7. 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

8. 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

9. 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

10. 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

11. 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

12. Telemedicine – first issue – How do we communicate? • Telephonic • Real time monitoring - snapshot • Streaming data 12

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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