1 Todays Outpatient Shift HOPD to Ambulatory Programs

1 Today’s Outpatient Shift: HOPD to Ambulatory Programs Playing the Long Game with Ambulatory Investments HOPD ASC Physician Practice Market Forces Driving Ambulatory Shift Payers Patients Payment Levelling Steering patients to even lower-cost sites Seeking more convenient care, lower co-pays Payment differential less significant than in past © 2019 Advisory Board • All Rights Reserved • advisory. com • WF 785517 -c-04/26 Source: Cardiovascular Roundtable interviews and analysis.

2 Off-Campus Payment Rates Back in the Spotlight Site Neutral Payments Add Cost Pressure for Outpatient Services CY 2018 -2019 POLICY IN BRIEF CMS Maintains a Site-Specific HOPD Rate 100% Excepted HOPDs Down from 50% in 2017 55% ASCs 40% Non. Excepted HOPDs HOPPS 35% Site-Neutral Payments • CMS aims to reduce reimbursement discrepancies based on site of care • Until 2017, hospital outpatient departments (HOPD) received higher Medicare reimbursement for the same services than non-hospital-owned facilities • Policy aims to level payment for new hospital-owned off-campus facilities Physician offices ASCPPS Site-Specific MPFS Access our site-neutral payment cheat sheet on the online resource page to learn more Payment System for Each Site of Service © 2019 Advisory Board • All Rights Reserved • advisory. com • WF 785517 -c-04/26 Source: CMS, CY 2019 HOPPS Final Rule; Cardiovascular Roundtable research and analysis.

3 Systems Must Choose Between Revenue And Reach Policy Excludes New Sites from Favorable Fee Schedule Review Of On-Campus, Off-Campus, Excepted, And Non-Excepted HOPDs Off-Campus HOPDs 250+ yards from hospital campus On-Campus “Safe Zone” Full HOPPS rate for all services Excepted HOPD Non-Excepted HOPD Off-campus facilities that furnished services payable under HOPPS before November 2, 2015 Did not furnish services payable under HOPPS prior to November 2, 2015 or lost excepted status Receives full HOPPS rate for all services Receives 40% of HOPPS rate for all services 250 yards Hospital HOPD Best environment for revenue amid service expansion © 2019 Advisory Board • All Rights Reserved • advisory. com • WF 785517 -c-04/26 Best environment to acquire patients amid service expansion Source: CMS, CY 2019 HOPPS Final Rule; Cardiovascular Roundtable research and analysis.

4 Clinic Visits Become Truly Site-Neutral Change to Routine Clinic Visits Could Significantly Impact CV Payments CMS Analysis Reveals Cost Savings Opportunity Off-Campus Payment Rates for Excepted HOPDs 50% G 0463 $116 Of all codes billed at offcampus HOPDs were attributed to one code Hospital outpatient clinic visit for assessment and management of a patient Current excepted HOPPS reimbursement $81 2019 rate (phase one) $46 2020 rate (phase two) Key Takeaways for CV Leaders 1 CV programs could see a significant payment reduction for clinic visits Percent of G 0463 Claims Provided at Currently Excepted HOPDs 2 There may be additional procedurelevel reimbursement cuts in the future Cardiology 72% In the same analysis, CMS analyzed the top 22 codes billed by an off-campus department of a hospital paid under HOPPS, which included five CV-related codes: Interventional Cardiology 67% • EKG Vascular 86% • Echo © 2019 Advisory Board • All Rights Reserved • advisory. com • WF 785517 -c-04/26 • Stress test • Nuclear medicine • Cardiac rehab Source: Centers for Medicare and Medicaid Services; Cardiovascular Roundtable research and analysis.

5 New Tool: CV Price Shift Calculator Estimate the Impact of Site-Neutral Payments at Your Facilities CV Price Shift Calculator Download the tool on our website TOOL CV Price Shift Calculator Calculate how changes in Medicare payment rates would impact your potential outpatient revenue • Get a custom analysis based on your contract agreements and payer mix • Understand the potential revenue impact of site-neutral payments on your CV outpatient revenue • Consider freestanding sites versus on-campus expansion © 2019 Advisory Board • All Rights Reserved • advisory. com • WF 785517 -c-04/26 Source: Cardiovascular Roundtable research and analysis.