AEON provides testing services to a broad range of health care providers and other
customers. The primary client groups serviced by AEON include:
• Physicians
• Clinics
• Medical Centers
• Hospitals
• Accountable Care Organizations (ACOs)
• Rehabilitation Centers or Intensive Outpatient Care Centers
• Employer Health Programs
AEON’s services are paid for through a mix of reimbursement from Medicare,
Medicaid and private health insurance along with a direct pay clientele. Currently,
the top 50 payors represent over 83% of AEON’s billings with 39% of these
billings representing in-network insurance charges. No single customer (payor)
accounts for more than 15% of AEON’s revenue or income.
Billing for laboratory services is a complicated process involving many payors
such as managed care organizations or MCOs, Medicare, Medicaid, physicians and
physician groups, hospitals, patients and employer groups, all of which have
different billing requirements. Billing process arrangements with third-party
administrators may further complicate the billing process and tests ordered
by a physician may be billed to different payors, depending on the medical benefits
of a particular patient.
AHC’s web-based services and telehealth products and services are sold
through direct sales efforts, reseller arrangements and group purchasing organizations
(GPOs). Resellers and GPOs typically receive a commission based on a percentage
of the value of customer agreements we enter into due to their efforts. In cases
where our contracts have a term exceeding one year, we generally defer service
revenue derived from these contracts and recognize it over the life of the contract.
AHC has also retained professional consultants to support its marketing and
sales efforts by providing it with expertise in specific markets. The markets
for healthcare devices and solutions include integrated delivery networks, physician
groups and networks, managed and accountable care organizations, hospitals,
medical centers, home health agencies, pharmacies, governments and public health
organizations. AHC has historically contracted with third parties for the provision
of hosting services to support its web-based services. AHC believes that there
are sufficient alternative suppliers of these services. AHC augments its own
staff from time-to-time by using third party consultants and its software and
services incorporate products and services which it licenses from unaffiliated
third parties. AHC has utilized the services of a contract manufacturer to assemble
telehealth devices and several suppliers for its tablets, peripherals and various
component parts and services. AHC believes that adequate alternative suppliers
of these products and services exist on commercially reasonable terms so as
to mitigate any adverse impacts caused by the termination of any of its existing
relationships.
