Recursos con los que cuenta el inmigrante empresario

For the year ended December 31, 2014, we derived approximately 94.7% of our total revenue from private insurance, including managed care organizations and other health care insurance providers, and 5.3% from direct- bill patients. Where there is a coverage policy, contract or agreement in place, we bill the third-party payor, as well as the patient (for deductibles and coinsurance or copayments, where applicable) in accordance with the policy or contractual terms. Where there is no coverage policy, contract or agreement in place, we pursue reimbursement on behalf of each patient on a case-by-case basis and rely on applicable billing standards to guide our claims.

In 2014, MDxHealth received the Local Coverage Determination (LCD) for Medicare reimbursement of ConfirmMDx for Prostate Cancer through Palmetto GBA. Additionally, we continued to expand contracts with many of the largest preferred provider organizations (PPO) in the US, bringing the current total to 12 commercial managed care agreements. In aggregate, these managed care networks, combined with Medicare, represent approximately 214 million covered lives who now have access to the ConfirmMDx test. These agreements currently include:

• In May 2013, Three Rivers Provider Network, covering 10 millions lives • In August 2013, Stratose, covering 12.4 million lives

• In September 2013, FedMed, covering 40 million lives • In September 2013, HealthSmart, covering 11.2 million lives

• In September 2013, America’s Choice Provider Network, covering 11.2 million lives • In October 2013, Fortified Provider Network, covering 4 millions covered lives • In October 2013, Health Services International, covered lives not reported • In January 2014, Prime Health Services (PHS), covering 6 millions lives • In March 2014, Galaxy, covering 3.5 million lives

• May 2014, Consilium, covering lives not reported

• July 2014, Ancillary Care Services, covering 4.5 million lives

• November 2014, Medicare/Palmetto GBA, covering 55 million lives (CDD providers enrolled in CTR)

Commercial and Private Payors

MDxHealth’s managed care team continues to pursue adoption of positive coverage policies and contracts by other commercial and private payors, preferred provider organizations and networks. We believe the clinical utility and actionability of our ConfirmMDx test, combined with our experience and knowledge of the factors needed to gain reimbursement will enable us to expand coverage of ConfirmMDx among the private payor market. We continue to build upon our successful strategy, using our Medicare LCD and existing Preferred Provider PPO contracts as a foundation to secure additional contracts from major national and regional managed care organizations, insurance carriers, and self-insured employer groups. Several key factors will facilitate positive coverage policies from third- party private payors:

• additional clinical utility studies and peer-reviewed publications demonstrating the impact of ConfirmMDx test results on physician decisions for patient management and outcomes

• inclusion of ConfirmMDx in the National Comprehensive Cancer Network (NCCN), American Urological Association (AUA), American Cancer Society (ACS), and other institutional guidelines

• widespread adoption of ConfirmMDx in routine clinic urology practice demonstrating utilization • support of key opinion leading urologists within the academic and private physician communities • advocacy; patient advocacy organizations (e.g. PCEC), policy representatives, and industry coalitions.

Governmental Payors

In 2014, a Medicare coverage determination (LCD) was issued by Palmetto GBA, administrator of the MolDX technology assessment program for the Centers for Medicare & Medicaid Services (CMS), for our ConfirmMDx for Prostate Cancer test. The LCD #L35368 became effective on November 3, 2014 and establishes ConfirmMDx for Prostate Cancer as “reasonable and necessary” under Section 1862(a)(1)(A) of the US Social Security Act. As part of an ongoing commitment to ensure that Medicare covers the appropriate use of the ConfirmMDx test, the LCD was issued with coverage and data development (CDD) requirements, stipulating that MDxHealth continues accruing patients in the prospective, randomized PASCUAL clinical utility trial currently in process, and to enroll providers into a Certification and Training Registry. Under the LCD, coverage is initially limited to patients of physicians enrolled in the ConfirmMDx Registry. MDxHealth will conduct an interim analysis of the PASCUAL study to assess the trending of the repeat biopsy rate, and expects to complete the interim analysis in 2015. Provided the interim analysis yields positive results showing a substantially lower repeat biopsy rate, Palmetto will expand physician participation in the ConfirmMDx Registry, effectively increasing the number of Medicare patients covered. If the interim analysis demonstrates poor accrual, or fails to demonstrate a substantially decreased repeat

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biopsy rate, the LCD indicates that limited coverage will continue until either 1,200 patients have been tested or 3 years from the effective date of the LCD, which ever occurs first. MDxHealth expects to have tested 1,200 patients within the PASCUAL trial and the Registry by Q2 2016. Unrestricted Medicare coverage, with the Registry requirement removed, is expected with favorable PASCUAL trial findings.

With the issuance of the LCD, ConfirmMDx has an established price for government agencies and MDxHealth can pursue state-run Medicaid programs as well as US military providers for contracts. MDxHealth intends to pursue such contracts for Medicaid starting with Medi-Cal in California. Medi-Cal is California’s Medicaid program and serves over 6 million residents. Medicaid is a medical assistance program established by Title XIX of the Social Security Act. The Medicaid program is a no-cost or low-cost public health insurance program that provides needed health care services for low-income and disabled individuals. Over the next few years, the Medi-Cal program is expected to expand further under the Affordable Care Act as those newly eligible for Medi-Cal are enrolled in managed care and as plans assume responsibility for additional covered services. With peer-reviewed health economic data demonstrating savings to payors covering ConfirmMDx, MDxHealth believes the California Department of Health Care Services (DHCS) leadership, and the public, will be receptive to contracting for the test. Once Medi-Cal coverge is established, MDxHealth intends to pursue Medicaid coverage in other US states, prioritizing each state program in order of ConfirmMDx utilization.

Beyond Medicaid programs, the military healthcare system, including the Veterans Affairs hospitals, military hospitals and Tricare healthcare providers, represent a significant opportunity for MDxHealth. These groups are estimated to be in excess of 20 million covered lives, with approximately 90% of beneficiaries being adult males. Likewise, the improved patient outcomes and health economic savings delivered through utilization of the ConfirmMDx for Prostate Cancer test are expected to facilitate contracting discussions.

Patients

Most often MDxHealth bills payors directly for ConfirmMDx testing services or as suggested by the ordering physician. In many cases, payors will cover the entire cost of testing. The ConfirmMDx test falls under the Clinical Laboratory Fee Schedule, so there is no co-payment, co-insurance or deductible for patients covered under traditional Medicare. Patients covered by commercial insurance companies may be responsible for a co-payment, co-insurance, and/or deductible depending on the health insurance plan and individual patient benefit. The amount, if any, will depend on the specific level of benefits provided by the insurance plan the patient has chosen. MDxHealth understands that the costs associated with the diagnosis, treatment and management of prostate cancer can impose a financial hardship that may affect a patient’s decisions on selecting testing and treatment options. Regardless of a patient’s insurance coverage or financial status, MDxHealth’s staff will assist the patient to obtain the testing needed. MDxHealth works closely with patients and healthcare providers on the timely and accurate filing of insurance claims and as needed, any appeals to mitigate out-of-pocket expense for the patient. MDxHealth offers a variety of financial assistance programs with options based on individual financial status. Some programs have certain eligibility requirements, so MDxHealth representatives assist in determining the right program for each patient.

In 2015, MDxHealth plans to invest in managed care sales and marketing to ensure optimal coverage and reimbursement for ConfirmMDx testing. MDxHealth will continue to educate payors on the test’s clinical value and its potential to reduce the overall cost of care. The key value proposition for payors will be focused on improved patient outcomes while delivering cost savings by reducing unnecessary, invasive and expensive biopsy procedures. We will leverage our managed care experience and base of contracted payors to obtain coverage for our future epigenetic test solutions in other cancers.

Billing

Billing for ConfirmMDx testing services is managed internally through our billing operations team utilizing specialized billing software for clinical laboratories and other healthcare organizations. Our billing department works closely with our third-party providers to ensure accuracy of billings, pursue timely collections, and to resolve discrepancies and process appeals as needed. Depending on our billing arrangement with each third-party payor and applicable law, we are obligated to bill in the specific manner prescribed by physicians and various payors, such as private insurance companies, managed care companies, and governmental payors such as Medicare and Medicaid, and physicians, each of which may have different billing requirements. Often we are paid by these third-party payors at rates that are based on the applicable fee schedule associated with the patient’s insurance plan.

Key factors to successful revenue cycle management include:

• understanding the coverage and information requirements among various payors

• proactively capturing missing, incomplete or inaccurate billing information provided by ordering physicians • managing claims directed to out-of-network payors with whom we do not have contracts

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MDxHealth focuses on carefully preparing claim submissions to minimize missing or incorrect information to facilitate billing and claims processing, and our internal billing and collections department consistently appeals unpaid claims to mitigate patient out-of-pocket expenses.

We have established policies and audit requirements to ensure compliance with applicable laws and regulations as well as our internal compliance policies and procedures. Billing for ConfirmMDx testing services in connection with governmental payor programs is subject to numerous federal and state regulations and other requirements, including those related to: (1) adherence to procedures and processes required by governmental payor programs; (2) training and education of our employees and customers; (3) compliance and legal costs; and (4) managing medical necessity denials in the absence of advance beneficiary notices.

Both California law and CLIA requirements dictate that laboratory testing be performed only at the request of authorized persons, and the Medicare program’s position is that laboratories are responsible for having sufficient processes and safeguards in place to ensure services are delivered only when ordered by a physician and for producing in an audit valid orders for all testing that they perform (e.g., a requisition signed by a physician). Accordingly, while we do not believe that laboratories are strictly required to obtain physician signatures on test requisitions as a matter of law, it is a best practice for laboratories to take all reasonable steps to obtain physician signatures on their test requisitions, at least in connection with testing that is billed to the Medicare program. If not, a laboratory may be subject to the possibility of payment denials or recoupment actions if its Medicare contractor asks for documentation of a valid order and it is then unable to work with the ordering physicians to produce satisfactory documentation of orders from the medical records of the physicians.

SALES

MDxHealth’s sales approach in the US focuses on the clinical and economic benefits of our ConfirmMDx for Prostate Cancer test as supported by extensive peer-reviewed literature covering the clinical validation and utility of our test. As of December 31, 2014, our sales and marketing team consisted of approximately 30 employees, including epigenetic diagnostic specialists, reimbursement account managers, medical science liaisons and customer service personnel. All personnel are field based except for customer service, which are based in our California headquarters.

MDxHealth’s sales team is trained to address the clinical, economic and reimbursement questions associated with selling the ConfirmMDx for Prostate Cancer test. Our sales force focuses on educating its primary and secondary clientele, which consists of urologists and their clinical staff, including nurses, laboratory and pathology personnel, finance administrators and billing personnel, and secondarily the pathology and laboratory staff who fulfill ConfirmMDx test requests on behalf of their clinician clients.

MDxHealth’s current urology sales force consists of 14 direct sales representatives, 3 regional sales managers and the director of sales. Territories have been designed to strategically cover key geographic areas that have the highest concentrations of prostate cancer patients. We have recruited sales professionals with an average of 5-10 years of successful experience in clinical oncology, diagnostic testing, pharmaceutical and medical device sales from leading biopharmaceutical, pharmaceutical or specialty reference laboratory companies. MDxHealth plans to expand this specialized, oncology-focused sales force to 30-40 direct representatives within two years, and to 60-80 direct representatives within five years.

Our sales efforts are directed towards increasing adoption and utilization of the ConfirmMDx for Prostate Cancer test in clinical practice. The strategy entails:

• working with community-based, large group practices and academic urologists to educate them on the clinical and economic benefits provided by ConfirmMDx

• nurturing and strengthening relationships with key thought leaders in urology

• supporting ongoing collaborations with leading universities and research institutions that have generated clinical validation data supporting ConfirmMDx

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• continuing ongoing clinical utility studies with key collaborators and clients to demonstrate the impact of ConfirmMDx on physician decisions and patient management for the payor community.

We also take advantage of customary marketing channels commonly used by the diagnostic and pharmaceutical industries, such as medical meetings, broad-based publication of our scientific and clinical data, and the internet. In addition, we provide easy-to-access information to our customers through our website and a data portal for physicians who wish to access test results electronically. Our customers value easily accessible information in order to quickly review their patients’ information and begin developing a treatment protocol.