QSI Analyst Day May 2013

QSI Analyst Day May 2013

Opening and Overview Steve Plochocki Chief Executive Officer

Company Restructuring Dan Morefield Chief Operating Officer

Restructuring for Growth & Profitability

Restructuring for Growth & Profitability Operational restructuring benefits include: Greater operational efficiencies and expense control Better positioned for future success

Positioned for Future Success Business Divisions Shared Services Software Development Sales Marketing Global Operations Human Resources IT Legal Finance Facilities Management

Operational Efficiencies & Expense Control Synergies among cross-functional groups Implementation & Training Customer Support Software Development Internal and external IT Offshoring enhancement Labor cost arbitrage Operating controls and common policies & practices leading to lower total costs

Positioned for Future Success Enhanced cross-selling & multi-product sales Acceleration of data monetization opportunities Enhanced interoperability across products Enhanced ability to scale operations Ability to adjust to rapidly changing industry Enhanced financial discipline Better capability to forecast financial results Better client satisfaction

RCM as a Growth Engine Monte Sandler Executive Vice President, RCM Services

Quick Fact * *Based on industry statistics.

Majority of Practices See Results [with RCM] Source: MGMA. Medical Billing Services Information Exchange: #4840. Based on MGMA Survey: Medical Billing Companies Produce Strong Results, 2009. (http://www.mgma.com/store/book s/medical-billing-services/)

Top 5 Reasons Healthcare Firms Outsource Revenue Cycle Management 1. Lower costs (important or very important for 76% of respondents) 2. Gain access to talent (70%) 3. Farm out activities others can do better (63%) 4. Switch to more flexible variable cost business model (56%) 5. Focus on Higher Value Activities & Key Initiatives such as: Improving patient care, outcomes & relationships (42%) Developing new products & services (37%) Expansion (33%) Source: PricewaterhouseCoopers Outsourcing comes of age: The rise of collaborative partnering 2012

Entry into RCM Acquisitions 5/2008 Acquired Healthcare Strategic Initiatives (HSI) St. Louis, MO 10/2008 Acquired Practice Management Partners (PMP) Hunt Valley, MD 4/2012 Matrix Healthcare Management Solutions (Matrix) North Canton, OH

RCM Services Reorganization Operational Reorganization 4/2010 post earn out integration of HSI and PMP into NextGen Practice Solutions 4/2012 post Matrix acquisition integration of NextGen Practice Solutions and Matrix into NextGen RCM Services Corporate Reorganization 8/2012 QSI shared service reorganization to better support growing RCM demand and projected growth

RCM Services Offering Standardized Best Practice Revenue Cycle services focused on revenue optimization and software utilization Tailored offering Scalable solution Rapid deployment Transparent Results oriented, data-driven Account Management and Reporting

RCM Services Growth Revenue 16% CAGR service revenue growth FY2010 FY2013 130% contracted annual revenue growth FY2013 67% of contracted annual revenue growth in FY2013 from existing NextGen Healthcare clients vs. 33% net new clients Margin 52% CAGR Operating Income growth FY2010 FY2013 32% CAGR Operating Margin growth FY2010 FY2013 Driven by expanded offshore labor arbitrage and other operating efficiencies

RCM Services Opportunities NextGen Ambulatory RCM cross-selling Hospital and Dental RCM service offerings ICD-10/ICD-11 ACO/Coordinated Care reimbursement models

Positioned for Growth Gary Voydanoff Executive Vice President, Sales & Marketing

Reorganized Sales & Marketing for Growth Stabilized the sales team Strong industry experience; 5 years on average for Sales Executives Increasing headcount in FY14 to support RCM; Inside Sales and Small Practice Integrated sales and marketing across all divisions Reorganized the sales team to: Take advantage of industry trends Align the team s strengths with industry trends RCM Services Professional Consulting Services Ambulatory fringe markets Cross selling within the current client base Multi-product net new sales Opened up the pricing playbook to support growth models

Put the Right People in the Right Positions Kelly Skeen Vice President Sales, Ambulatory Patty Rutherford Vice President, Inside Sales James Muir Vice President Sales, RCM Services Kelli Castellano Vice President, Marketing & Communications

Integrated Sales and Marketing Marketing team aligned with revenue objectives and shifted focus to: - Demand and lead creation - Positioning NextGen Healthcare as a thought/industry leader - Client success stories that demonstrate our position FACTOID: Organizations that integrate sales and marketing outperform those that do not by as much as 24% on average revenue growth Sirius Decisions 2012

Feeding the Top of the Funnel 110% Growth in lead generation FY12 Q4 to FY13 Q4

Prospect Web Traffic

Google AdWords

Short-Term Results Sales are trending up in strategic growth areas RCM Services Professional Consulting Services Client base cross selling Multi-product sales for net new business Long-term pipeline has turned the corner

Product Penetration in Current Client Base Creating demand for ancillary products Focused on client education, product bundling, and marketing Client base demand for products is significant 123

Results: Cross Selling, Ambulatory Client Base 14% INSIDE SALES ARE UP

Outsourcing Experiencing Rapid Growth More companies are choosing to outsource IT services, as third-party contracts for cloud computing have tripled since 2010. Report by Information Services Group This function of outsourcing IT is also expected to see a 30 percent increase in the next 12 to 18 months. Bluewolf Report 2012 The percentage of the IT budget designated for outsourcing services is up 23 percent, on average, in 2012 over the prior year. Computer Economics' annual outsourcing study, IT Outsourcing Statistics 2012/2013.

Revenue Cycle Management is a $50 Billion Market in the United States Revenue cycle management (RCM) is currently a $50 billion market in the US 75 Times Larger than IT Bizcharts India Outsourcing Industry 2011 Focus on Healthcare vertical for Growth. the EHR Market at $6.5 Source: Frost & Sullivan 2012

Healthcare IT Services Outsourcing Expected to Grow at 28% from 2010-2014 3.5 Times Faster than The EHR Market at 7.5% Source: TechNavio 2012 Source: RCNOS - http://www.rncos.com http://www.triple-tree.com/blog/2012/09/21/health-reform-and-the-re-emergence-of-it-outsourcing-services/

Top Healthcare Drivers for Sourcing Source: Gartner Research, Inc. Outsourcing Buying Trends and Drivers for Sourcing Strategies for 2012 and Onward Published: 15 August 2012, Claudio Da Rold The 2012 Gartner CEO & senior business executive survey of more than 200 CEOs from a total of more than 300 senior business executives & included 2,335 CIO responses to the 2012 survey

Results: RCM and Professional Consulting Services 130% 139% 1200% RCM SERVICES SALES UP RCM SERVICES PIPELINE UP PROFESSIONAL CONSULTING SERVICES SALES UP Factoid: 5% RCM Services penetration within NextGen client base

Channel Partner Expansion Strong program Adding new partners Expand relationship w/medline RCM $1M in opportunities

Optimizing Our Consulting Partnerships Helping each other grow business 75 active consulting relationships

Value Added Reseller Partners VirMedice LLC Cross selling RCM, Inpatient, Dental New products Population Health Attacking untapped specialty markets across the country Looking to expand VAR channel in areas with limited coverage Competitive replacement VAR search

OPTIMISTIC ABOUT THE FUTURE

Optimistic About The Future Cross selling and RCM Services model is working! RCM Services is moving into hospital Population Health demand is picking up Professional Consulting Services sales outside of NextGen Healthcare Growth of fringe market opportunities these fit our product strengths Cloud technology is not all it s cracked up to be The hype comes and goes we re strong, stable, and consistent

Top Four Vendor MU Attestations

ONC Certified Only 3 Vendors

ONC Certified Why Does This Matter? Decertification is starting two recent vendors 500+ EHR vendors shrinking to less than 200 Replacement buyers more savvy Will choose proven, safe vendor Will demand service level agreements and shared risk the next time around We are poised to pick up growth as the long-term, safe choice

Optimistic About The Future Emergence of physician-owned mega-groups and payer-owned groups They are organizing, consolidating, and poised to take on the hospital owned physician organizations We have a strong base in this market with a proven performance record Crystal Run, Mt. Kisco Medical Group, Monarch Healthcare, OPTUM Health, Texas Healthcare, CWPW, Muir Medical Group, Hill Physicians, Caremore Medical Clinics of North Texas.. Resulting in add license sales, and ancillary product sales

The Existing Client Base is Vibrant Existing client base is vibrant and excited about what we re doing Great list long-term clients stickiness expanding growing, buying Record number of attendees at UGM 2012, 4500+ attendees

Industry Leading Clients 10,000 MEDICARE ATTESTATIONS 2,300+ PCMH CERTIFIED PROVIDERS 130 ACO CLIENTS 26 STATES

FUTURE TECHNOLOGY

Optimistic About Our Future Technology Cloud V.1 systems are not user friendly TCO is very high The delivery model is limited Questions around security and data ownership There is a demand for a new generation of EHR applications Physicians are universally unhappy with their EHR today

Optimistic About Our Future Technology Under the direction of our CTO we re investing in the next NextGen Cloud V.2 Hybrid deployment App-like, intuitive UI Highly configurable yet easy to update Protecting our client investment Improve on our current product strengths Completely integrated products line Expanded and standalone population health capabilities

The Next Generation of NextGen Healthcare Interactive Connected Intuitive

The Next Generation of NextGen Healthcare Interactive Engaging Personal Touch Mobile Gestures Audio Plug and play Modern lifestyle Intelligent Relevant

The Next Generation of NextGen Healthcare Connected Best Practices Cloud Open Social Managed Flexible Supportive

The Next Generation of NextGen Healthcare Intuitive Adaptive Search Fast Efficient Thinks like you Instantaneous

The Next Generation of NextGen Healthcare App Community Interoperable

Optimistic About Our Future Technology The EHR doctors want to use! Interactive Connected Intuitive

Closing Remarks Steve Plochocki Chief Executive Officer

Thank You