About VirtuOx. Was marketed exclusively by Phillips Healthcare division, Respironics for 3 years

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2 About VirtuOx VirtuOx, Inc. assists physicians and Durable Medical Equipment (DME)( companies diagnose respiratory diseases and qualify patients for home respiratory equipment under the guidelines of CMS and other insurances. Virtuox offers both laboratory services and diagnostic hardware to assist with this process VirtuOx was founded in 2004 as the latest generation of CMS approved Overnight Oximetry Testing software platforms and have developed one of the industry s s top web based applications that communicates with a variety of Oximeters. We are an industry leader for patient self administered Overnight t Pulse Oximetry testing providing support to over 2000 registered DME s nationwide and over 26,000 physicians. With the recent Medicare approval of Home Sleep Testing, VirtuOx can now help diagnose patients with Obstructive Sleep Apnea at a drastic savings. Was marketed exclusively by Phillips Healthcare division, Respironics for 3 years

3 About VirtuOx Manufacturer of the VPOD portfolio of Pulse Oximeter Devices that store data and can be uploaded to the VirtuOx system VPODCOMBO.pdf Manufacturer of the VProbe line of cost effective replacement oximeter probes Virtuox_VPO_Sensor_Flyer.pdf Manufacturer of specialty Pulse Oximeters that include Blue Tooth and GPRS communication capabilities.

4 About VirtuOx Manufacturer of VirtuOx Office Edition, our web-based Oximetrey software licensed to physicians, hospitals, skilled nursing facilities and patients VirtuoxOE.pdf Manufacturer of VirtuOx Vo2 Program, our Oxygen validation and discharge program. vo2 program details.pdf Provider of VirtuOx HST, Home Sleep Testing VirtuoxHSTFlyer.pdf

5 Home Sleep Testing

6 What Is SDB? Disrupted breathing during sleep due to collapse of the upper airway Serious disorder linked to leading causes of death in the US (heart disease, stroke) Affects over 40 million Americansmany are undiagnosed 6

7 Apnea A cessation of airflow for > 10 seconds Obstructive Central Mixed Hypopnea A decrease in airflow lasting > 10 seconds with a 30% reduction in airflow and with at least a 4% oxygen desaturation from baseline AHI (Apnea/Hypopnea Index) Number of apneas and/or hypopneas per hour of sleep (or study time) Reflects the severity of the SDB AHI = 0-4 Normal range AHI = 5-14 Mild sleep apnea AHI =15-30 Moderate sleep apnea AHI > 30 Severe sleep apnea 7

8 Sleep Apnea, it s not just a snore... People who suffer from sleep apnea have: People who suffer from sleep apnea have: Multiple episodes of sleep apnea per night Multiple episodes of sleep apnea per night Drop in blood oxygen Drop in blood oxygen Increase in blood pressure Increase in blood pressure heart rate Increase in heart rate Increased risk for for heart heart attack attack Increased risk for for stroke 8

9 Metabolic Syndrome Sleep-disordered breathing is at the center of Metabolic Syndrome Treating SDB may improve co-morbidities 9

10 Sleep Apnea Prevalence in Co-morbid Patients Drug-Resistant Hypertension Type 2 Diabetes Congestive Heart Failure Atrial Fibrillation All Hypertension Coronary Artery Disease Angina Logan et al. J. Hypertension 2001 Einhorn et al Endocrine Prac 2007 Maisel et al. HFSA 2007 Somers et al. Circulation 2004 Sjostrom et al. Thorax 2002 Schafer et al. Cardiology 1999 Sanner et al. Clin Cardiology

11 Patients presenting with either sleep apnea or diabetes should be evaluated for the other condition Patients with type 2 diabetes should be assessed for symptoms of sleepdisordered breathing. Continuous positive airway pressure is the current best treatment for moderate to severe sleep apnea. 11

12 The Cardiovascular Link High prevalence of sleep apnea in cardiovascular disease patients 30% to 80% of patients for common CVD states Logan et al. J. Hypertension 2001; Schafer et al. Cardiology 1999 Proven benefits from sleep apnea therapy in lowering blood pressure 4mm Hg to 10mm Hg reduction with CPAP therapy Becker et al. Circulation 2003 Proven benefits from sleep apnea therapy in improving cardiovascular health Left ventricular ejection fraction, six-minute walk, VO 2 max, afterload, BNP Kaneko et al. NEJM 2003, Maisel et al. UCSD VA Hospital Case Study Data (2002), Teschler et al. AJRCCM

13 Sleep Apnea is an identifiable cause of hypertension according to the National Institute of Health (NIH) 13 SDB Exploring The Links ResMed 2007 v 13

14 Should I care? Higher hospitalization rates for patients with untreated OSA: The OSA group had 251 nights in hospital vs 90 nights for control group over 2 year period Kryger et al., SLEEP 1997; 19(9):S111-S116 Patients with undiagnosed sleep apnea had higher medical costs than aged and sex matched controls in the year prior to diagnosis $2720 OSA vs $1384 controls (mean average health care costs) Kapur et al. SLEEP 1999;22:749 Prior to diagnosis of OSA patients utilized medical resources 23-50% more than a control group Smith et al. CHEST 2002, 121:164 In the year prior to diagnosis, patients with OSA were heavy users of medications especially those used to treat cardiovascular diseases Otake et al. Thorax 2002, 57:417 Treatment of OSA resulted in significant reduction in health care utilization - hospital stays 1.25 days vs 0.53 days Krieger et al. Sleep

15 Treatment of Sleep Apnea PAP - Positive Airway Pressure Works as an air splint to keep upper airway open during sleep Prevents upper airway collapse and associated physiologic responses Most effective non-invasive therapy 15

16 Effective PAP therapy provides: Significant reduction and near elimination of apneas and hypopneas Elimination of desaturations Improvement in blood pressure Removal of increased risk for heart attack and stroke Improvement in insulin sensitivity Improved quality of sleep and metabolic well-being Improved productivity: daytime alertness, cognition, and mood Improved Quality of Life 16

17 Therapy: From this in

18 to a system revolution in

19 Web-based patient compliance and treatment efficacy monitoring TM ResTraxx System 19

20 Home Testing In 2008 Home Sleep Testing (HST) was approved by CMS In lab sleep test (PSG) Home sleep test (HST) 20

21 HST Order Process HST order is placed Physician sees a patient with symptoms of Sleep Apnea, uses VirtuOx prescription and: Faxes directly to VirtuOx HSTOrderForm.pdf VirtuOx processes order Verification of insurance benefits are performed Patient has benefits Patient has no benefits for HST, MD notified immediately Patient is called and informed of the physician s orders, the test process is thoroughly explained, and the test is scheduled. If patient refuses because of deductible, coinsurance or does not want HST, MD notified. HST is set up for patient and mailed via USPS 2 day express. Virtuox provides easy-to follow patient instructions and pictorial guides. 24-hour telephone support is available through our toll free number to assist patients with the test procedure. HST is received by patient ApneaLink Welcome Package.pdf VirtuOx receives from USPS about delivery. VirtuOx calls patient to go over proper HST set up and to answer any questions. HST is performed The following day, the patient ships back HST device in the postage paid USPS container provided by VirtuOx.

22 HST is scored A VirtuOx Respiratory Therapist or RSPGT will manually score the test. HST is interpreted HST EXAMPLE 2.pdf VirtuOx has a panel of Board Certified Sleep physicians available to interpret the scored test data. If the physician who ordered the test is a Sleep Specialist they will have the option to interpret their own tests. One of three situation will occur: Patient needs Auto titrating PAP therapy. Sleep MD recommends appropriate high and low pressure Patient requires no additional therapy as they do not meet the medical necessity for PAP Patient should have a facility based PSG as the Sleep MD noticed some significant abnormalities. Results to the referring physician Once the data has been scored and interpreted, the results will be sent to the ordering physician. A copy of the test will also be sent to the DME as the patient signed a PHI release. DME delivers equipment DME will get proper prescription from the patients treating physician based on the Sleep MDs recommendation. Depending on the DMEs policies the DME will either deliver a Auto PAP and download the results after a specified time and deliver a regular PAP based on the Auto PAPs results. The DME may also leave the Auto PAP device in the patients home. Virtuox bills appropriate carrier for test

23 HST Cost Analysis Procedure Cost Description HST $258 Based on Florida Medicare Allowable PSG / CPAP* $ Based on 2 nights of testing PSG $ Based on Florida Medicare Allowable CPAP $ Based on Florida Medicare Allowable Split Night $ Based on Florida Medicare Allowable *Most patients get a two night protocol

24 HST Cost Analysis vs 2 night Protocol Procedure Cost HST $258 PSG / CPAP $ Savings $ per patient The average time for patient to receive PAP therapy: HST: 7-15 days PSG / CPAP: days

25 HST Cost Analysis vs 1 night Protocol Procedure Cost HST (G0399 or G0400) $258 Split Night (95811) $ Savings $ per patient The average time for patient to receive PAP therapy: HST: 7-15 days Split Night: days

26 Goals to Success Implement VirtuOx IDTF services for Overnight Oximetry and Home Sleep Testing Restrict all PSG prescriptions and have all patients get channeled thru a Home Sleep Testing pathway. Let VirtuOx s Medical Director decide who should get more extensive testing like PSG and or CPAP titration Allow VirtuOx to coordinate PAP therapy to provide longitudinal care.