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Kool SmilesFacts & Background #2

Kool Smiles Has Provided Over 8M InFree Care This Year.We Would Be Proud To Introduce You To SomeOf The Thousands Of Families Who HaveReceived Free, Quality Dental Care From Us ThisYear So You Can Balance Your Story.

Guadalupe Segura Mata, a parent of a Kool Smiles pa6ent inTexas who recently received free services for her daughter, saysthat the availability of dental care has made a tremendousdifference in their lives. “This was the first 6me I was taking my4‐year‐old daughter to a den6st and the service was excep6onal.My daughter was in pain and had a hard 6me ea6ng. It waspainful for me, too, to see her in pain. Thanks to them, mydaughter now can eat. She’s so happy and I’m happy too. I wasvery worried about being able to pay for the consulta6onbecause I don’t have insurance coverage, but the people at KoolSmiles told me not to worry. I was very happy for me and mostimportantly for my daughter. I’m very grateful for what they didfor my daughter.”We can provide contact informaNon for this paNent and a HIPAArelease, if you’d like to contact her directly. We also have severalpaNents who have indicated interest in speaking up about thegreat care they received from Kool Smiles denNsts.

Methodology Overview:Why Track by Prophylaxis? The data have unique paNent counts by procedure code, so amethod must be used to get to an understandable count ofpaNents going to the denNst. It was determined that themost valid way to do this was to look at dental prophylaxis,or what most people think of as the “cleaning” in theirhygiene visit. These are the D1110 and D1120 CDT codes.This is more accurate than looking at dental exams, since if anew paNent (D0150) comes back within the year (D0120), itwould inaccurately be counted as two paNents.We are happy to complete a similar analysis if provided withthe data set you are referencing.

Methodology Overview:Why PracNces vs. Age?The data set we were provided did not containage data. As such, we used the best availabledata, which was an indicator of the pracNcename (using typical children’s terminology).If provided the data you refer to, we willperform the same analysis.

Methodology Overview:Why Not Crowns vs. RestoraNons?Comparing crowns vs. restoraNons would be a falseand misleading metric. That analysis would show theoutlier denNsts, who are likely not bundling fillings, asbeing the most conservaNve on crowns because theyare doing a higher cost, less durable treatment.

In Texas, other providers billed 2.3 Nmesthe number of one‐surface fillings perpaNent as Kool Smiles.There are demonstrable cases where non‐Kool Smilesproviders are billing for several single‐surfacerestoraNons for a single tooth, when they should bebilling a single mulN‐surface restoraNon.This acNon can cost taxpayers substanNally more thana crown, and provides a less durable treatmentalternaNve (according to the AAPD) for the child.

Methodology Overview:Why Not Crowns vs. RestoraNons?Kool Smiles provides fewer crowns and restoraNonsper paNent than other groups and individual denNsts.Restora(ons / ProphyCrowns / ProphyData Source: Texas Medicaid FY 2011 Claims Paid Data.Methodology: Children's DenNst idenNfied using the following keywords in provider name: 1) pediatric, 2) kids, 3)children. Kool Smiles idenNfied using TPI's Group providers idenNfied by searching name in provider field. PaNents "clients" in the data set Procedures per paNent count of services/count of clients.Analysis (56MB file) can be provided or independently confirmed.

Methodology Overview:Why Not Crowns vs. RestoraNons (cont.)?When measured against the best data we haveavailable (prophylaxis indicator as paNents), it clearlyindicates that Kool Smiles denNsts, on the whole, aremore conservaNve than other providers (in aggregate)with respect to restoraNons, both fillings & crowns.Actual DataRestore/ProphyFilling/ProphyCrowns/ProphyKool Smiles1.491.942.31All Other TX1.763.243.18Source: Texas Medicaid FY 2011 Claims Paid DataUnique paNent numbers calculated based on prophy D1110 D1120 codesRestoraNons based on D2140 D2150 D2160 D2330 D2391 D2392 D2393 D2930 D2934

Further Data Analysis – AddiNonal StatesIndex About The Data PaNent Counts and Market Share CalculaNons Procedure CalculaNons How Kool Smiles Data Are Broken Out

About the Data NCDR & Kool Smiles contractors made Freedom of InformaNon Requests earlyin 2012 to try to obtain 2011 claims data from as many of our states aspossible.The data requested were for Medicaid dental claims paid by provider and byprocedure code.Data were successfully obtained from Kentucky, Louisiana, Mississippi, SouthCarolina, Texas and Virginia. Data also were received from Indiana, but theyare on a summary level and do not allow for analysis on a per‐provider level.Data are for state fiscal year 2011 for LA, SC, TX and VA. Data are for calendaryear 2011 for KY and MS.We conNnue to pursue other state data, but this is our enNre claims‐paid dataset as of June 11, 2012.The original intent for obtaining these data was for compliance benchmarking(ability to compare our denNsts with a broader database than just our own), aswell as addiNonal market data to berer understand underserved markets.

About the Data The spreadsheets provide three essenNal numbers by procedure (CDT code) and byprovider:– Number of unique paNents receiving the CDT code– Total procedure count for the CDT code – Total reimbursement for the CDT codeIn KY and TX, all three of the above elements were present in the raw data obtained.In MS, SC and Virginia, reimbursement and unique paNents per CDT code were received.Procedure counts were obtained by dividing total reimbursement for the CDT code bythe per‐procedure reimbursement rate for that CDT code. (As a simple example – a den6stpaid 1,000 for a procedure that pays 100 would have a procedure count of 10.)In LA, unique paNents and procedure count per CDT code were received. Totalreimbursement was obtained by mulNplying the per‐procedure reimbursement rate bythe procedure count for that CDT code. (As a simple example – a den6st who performed 10procedures that pay 100 each would have total reimbursement for that CDT code of 1,000)KY data exclude the greater Louisville area, as we were only able to obtain the fee‐for‐service program data, which did not include the area administered by Passport HealthPlan.

PaNent Counts and Market‐Share CalculaNonsPa(ent Counts The data have unique paNent counts by procedure code, so a method must be used to get to anunderstandable count of paNents going to the denNst. It was determined that the most valid wayto do this was to look at dental prophylaxis, or what most people think of as the “cleaning” in theirhygiene visit. These are the D1110 and D1120 CDT codes. This is more accurate than looking at dental exams, since if a new paNent (D0150) comes backwithin the year (D0120), it would inaccurately be counted as two paNents. PaNent counts using D1110 and D1120 produce an 11.5% share as follows:Kool SmilesNon‐ 176,358183,321380,0302,923,3933,303,423TotalDollar Market Shares This is a very basic calculaNon of Kool Smiles reimbursements versus total reimbursement accordingto the data.

Kool Smiles DenNsts Perform Fewer Procedures PerPaNent, On Average, Than Do Non‐Kool Smiles DenNstsRestora(ons Per Pa(ent This calculaNon looks at the number of restoraNve procedures done per paNent. The count ofprocedures is based on nine codes for composite fillings, amalgam fillings and stainless steelcrowns. The nine codes used are procedures commonly performed by Kool Smiles and do notinclude alternaNve restoraNons that Kool Smiles might not perform. Specifically, the codes areD2140, D2150, D2160, D2330, D2391, D2392, D2393, D2930 and D2934.ProceduresPaNentsProcedures Per PaNent418,848380,0301.10Non‐Kool 3Kool Smiles

At Kool Smile Offices, The Cost Per PaNent Was SubstanNally LowerThan At Non‐Kool Smiles Dental PracNcesRestora(on Cost Per Pa(ent This calculaNon is done the same way as the restoraNons per paNent, but it replaces procedure inthe numerator with the dollars spent on these restoraNons. Again, this is based on nine codes forcomposite fillings, amalgam fillings and stainless steel crowns. The nine codes used are procedurescommonly performed by Kool Smiles and does not include alternaNve restoraNons that Kool Smilesmight not perform. Specifically, the codes are D2140, D2150, D2160, D2330, D2391, D2392, D2393,D2930 and D2934.ReimbursementPaNentsCost Per PaNentKool Smiles 41,616,921.70380,030 109.51Non‐Kool Smiles 525,140,760.322,923,393 179.63Total 566,757,682.023,303,423

Kool Smiles Offices Have A Lower X‐Ray Cost Per PaNentThan Non‐Kool Smiles Offices.X‐ray Cost Per Pa(ent This calculaNon examines X‐ray cost per paNent. It is based on 10 common radiograph codes.DiagnosNc imaging procedures that Kool Smiles does not perform were not included. Specifically,the codes are D0210, D0220, D0230, D0240, D0250, D0260, D0270, D0272, D0274 and D0330.ReimbursementPaNentsCost Per PaNentKool Smiles 15,464,328.77380,030 40.69Non‐Kool Smiles 145,613,887.012,923,393 49.81Total 161,078,215.783,303,423

Even When Compared With Offices That May Not Follow AAPDGuidelines For Stainless Steel Crowns, Kool Smiles Provides FewerCrowns Per PaNent.Crowns Per Pa(ent This calculaNon is idenNcal to the restoraNons per paNent calculaNon, but only looks at stainlesssteel crowns (D2930) and stainless steel crowns with a white estheNc coaNng (D2934 – NuSmilecrowns). Since many general denNsts do not stock crowns or may not provide them in a way thatfollows AAPD guidelines, we might expect denNsts that do stock them and provide them in a waythat follows AAPD guidelines (such as Kool Smiles denNsts) to be higher than the average.ProceduresPaNentsProcedures Per PaNentKool Smiles112,752380,0300.30Non‐Kool Smiles900,1122,923,3930.311,012,8643,303,423Total

How Kool Smiles Data are Broken OutFollowing are the methods and iden6fiers used to ensure all Kool Smiles procedures were iden6fied in each state:Kentucky Kool Smiles had three offices in Kentucky during CY2011, but only one office is in the area for whichdata were obtainable. Since the data do not have a group idenNfier, looking up Kool Smilesproviders by address is the opNmal way of breaking Kool Smiles out of the data. The address of theoffice in the data is 1301 Winchester Rd., Suite 225, Lexington, KY 40505, and all Kool SmilesdenNsts appear under this address.

How Kool Smiles Data are Broken OutLouisiana Kool Smiles had seven offices in Louisiana during FY2011. Since the data do not have a groupidenNfier, looking up Kool Smiles providers by address is the opNmal way of breaking Kool Smilesout of the data. Below are LA addresses and the different combinaNon in which they appear in thedata. (Note that there was a post office address change for Lake Charles and a direcNonalcorrecNon for Lafayere).Kool Smiles Office Addresses:2001 NE EVANGELINE THRWY, LAFAYETTE, LA 70501-00002706 RYAN ST, LAKE CHARLES, LA 70461-41532820 LOUISVILLE AVE, MONROE, LA 71201-66853057 GENTILLY BLVD, NEW ORLEANS, LA 70122-38073445 GOVERNMENT ST, BATON ROUGE, LA 70806-57173735 JEWELLA AVE, SHREVEPORT, LA 71109-47036 WESTSIDE SHOPPING CTR, GRETNA, LA 70053-3640How they appear in the data:2001 NE EVANGELINE THRWY2001 NW EVANGELINE THRWY2706 RYAN ST2802 RYAN ST/STE 262820 LOUISVILLE AVE2820 LOUISVILLE AVE/STE 1003057 GENTILLY BLVD3445 GOVERNMENT ST3735 JEWELLA AVE3735 JEWELLA AVE6 WESTSIDE SHOPPING6 WESTSIDE SHOPPING CENTER6 WESTSIDE SHOPPING CTR