Jefferies 2015 Global Healthcare Conference June 2015 1 Safe Harbor Provisions SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS: This news release may contain forward-looking statements within the meaning of the federal securities laws. Statements regarding future events, developments, the Company's future performance, as well as management's expectations, beliefs, intentions, plans, estimates or projections relating to the future (including, without limitation, statements concerning revenue and net income), are forward-looking statements within the meaning of these laws and involve a number of risks and uncertainties. Management believes that these forward looking statements are reasonable and are based on reasonable assumptions and forecasts, however, undue reliance should not be placed on such statements that speak only as of the date hereof. Moreover, these forward-looking statements are subject to a number of risks and uncertainties, some of which are outlined below. As a result, actual results may vary materially from those anticipated by the forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the volume and timing of systems sales and installations; length of sales cycles and the installation process; the possibility that products will not achieve or sustain market acceptance; seasonal patterns of sales and customer buying behavior; impact of incentive payments under The American Recovery and Reinvestment Act on sales and the ability of the Company to meet continued certification requirements; the development by competitors of new or superior technologies; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; undetected errors or bugs in software; product liability; changing economic, political or regulatory influences in the health-care industry; changes in product-pricing policies; availability of third-party products and components; competitive pressures including product offerings, pricing and promotional activities; the Company's ability or inability to attract and retain qualified personnel; possible regulation of the Company's software by the U.S. Food and Drug Administration; uncertainties concerning threatened, pending and new litigation against the Company including related professional services fees; uncertainties concerning the amount and timing of professional fees incurred by the Company generally; changes of accounting estimates and assumptions used to prepare the prior periods' financial statements; general economic conditions; and the risk factors detailed from time to time in the Company’s periodic reports and registration statements filed with the Securities and Exchange Commission. 2 Company Overview Quality Systems, Inc. and its NextGen Healthcare subsidiary develop and market computer-based practice management, electronic health records (EHR) and revenue cycle management applications, as well as connectivity products and services, for medical and dental group practices and small hospitals. • Revenue primarily derived from physician group businesses that utilize the Company’s high functionality practice management suites • Focus is on growing organically with a strong emphasis on reinvestment in new product and service development initiatives • Acquisitions of complementary business lines are also key drivers of growth 3 Organizational Timeline A willingness to reinvest and reinvent to better compete 4 Quality Systems Today March 31st, 2015 TTM Revenue: $490.2mm Non-GAAP EPS: $0.62 TTM TTM TTM TTM $18.5mm Revenue: $373.8mm Revenue: Revenue: $80.0mm Revenue: $18.0mm (76% of total) (4% of total) (16% of total) (4% of total) ~ 85,000 Providers ~10,000 Dentists ~ 6,500 Providers ~ 300 Hospitals Markets Ambulatory Markets Dental Markets Ambulatory Markets Small Hospitals Served: Practices Served: Practices Served: Practices Served: • Financials • Practice • Practice • Revenue Cycle • Clinical Management Management Management • Surgery • EHR • Electronic • Other Services Scheduling • Population Health Dental Records Management • Patient Portal 5 Market Drivers • American Recovery and Re-investment Act (ARRA) – 2/09 – Over $60 billion in incentive and grant money to stimulate healthcare information technology (HIT) adoption. – Stringent rules for providers to qualify for funds known as “Meaningful Use” – First time that state-based Medicaid programs and Departments of Health become major purchasers of HIT • Pay-for-performance (P4P) programs, patient-centered medical home, and other quality initiatives • Consumerism and Personal Health Records (PHR) • Interoperability and community-based data exchange 6 Medicare Complete EHR EP Attestations Top Ten Vendors Epic Systems Corporation 152,888 Allscripts 66,498 eClinicalWorks LLC 51,876 NextGen Healthcare 47,185 GE Healthcare 38,541 Greenway Health 29,527 athenahealth, Inc 21,070 Practice Fusion 17,104 McKesson 16,727 Community Computer Service Inc 9,204 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 Based on ONC March 2015 attestation data 7 Medicare Complete EHR EP Attestations: Top Five vs. Top Ten Vendors by % Total 22.9% 9.9% Epic Systems Corporation Allscripts eClinicalWorks LLC 7.8% NextGen Healthcare GE Healthcare Greenway Health, LLC athenahealth, Inc 7.1% Practice Fusion 32.6% McKesson 5.8% Community Computer Service, Inc All Other 4.4% 3.2% The top five vendors continue to 2.6% dominate more than half (53%) of 1.4% 2.5% all attestations, where “All Other” represents a collection of almost 500 additional vendors Based on ONC attestation data March 2015 8 Hospital Top 10 Vendors Vendor Attestations % Total 1 Epic Systems Corporation 1,414 17.7% 2 MEDITECH 1,357 17.0% 3 CPSI 1,234 15.5% 4 Cerner Corporation 943 11.8% 5 McKesson 656 8.2% 6 MEDHOST 606 7.6% 7 Healthland, Inc. 565 7.1% 8 Allscripts 332 4.2% 9 NextGen Healthcare 153 1.9% 10 Health Care Systems Inc 119 1.5% All Other 7.4% Based on ONC March 2015 attestation data 9 Hospital Attestations: Top Ten Vendors by % Total 17.7% 17.0% Epic Systems Corporation MEDITECH CPSI 7.4% Cerner Corporation McKesson 1.5% MEDHOST 1.9% 15.5% Healthland, Inc. 4.2% Allscripts NextGen Healthcare 7.1% Health Care Systems, Inc. All Other 11.8% 7.6% 8.2% Based on ONC March 2015 attestation data 10 EHR Incentive Program Total Program to Date Stage 1 Payments Active Registrations Providers Paid Dollars Paid Medicare Eligible Professionals 353,350 290,304 $7.67 Billion Medicaid Eligible Professionals 177,406 139,110 $3.63 Billion Eligible Hospitals & CAHs 4,811 4,793 $18.31 Billion Total 535,567 434,207 $29.61 Billion Stage 2 Payments Providers Paid Dollars Paid Medicare Eligible Professionals 38,472 $254.66 Million Total Dollars Paid Eligible Hospitals 1,440 $1.08 Billion $30.93 Billion Total 39,912 $1.33 Billion Based on ONC March 2015 attestation data 11 Market Opportunity & Positioning Revenue Cycle Population Health Management Services Management High Growth High $26 Billion $45 Billion <100 Bed 20-25% Penetrated 19% Penetrated Hospital Software $3 Billion Ambulatory Growth 60-70% Software Penetrated $13 Billion 60-70% Dental Software Penetrated $1 Billion Low Growth Low 80% Penetrated Low Opportunity (High Penetration) Penetration Opportunity High Opportunity (Low Penetration) 1. Citi Research, Oliver Wyman Analysis, 2. TriZetto, Industry Perspectives on Future Trends in Population Health; 3: KPMG Population Health Investment Survey 12 Representative Customers 13 Strategic Dial Movers Continued Growth of Our Core Businesses • This is the fourth year of government incentive payments to physicians and hospitals with half of the market to go • Stage 1-2-3 – Resale Market • ICD 9-10-11 – Resale Market • Healthcare Reform • Five Years of Incentives • Five Years of Penalties • 10 Year Adoption Period 14 Strategic Dial Movers Focusing on Opportunities to Sell Complementary Products • There is significant opportunity in cross-selling new solutions to the existing customer base and bundling multiple solutions for new customers • Large Installed Base ~ 85,000 providers ~ 10,000 dentists ~ 300 hospitals • Four Divisions 28 Product & Service Offerings 15 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 100% 5% 9% 90% 33% 80% 70% 60% 82% 88% 94% 50% 98% 95% 91% 40% 67% 30% 20% 10% 18% 12% 2% 6% 0% PM EHR RCM Mirth Patient Portal Population Health Dashboard Product Penetration 16 Reorganized Functional Areas • Reorganized functional areas to maximize efficiencies company-wide: Research & Development Sales & Marketing Finance & Back Office Operations Implementation & Professional Services Information Technology Services 17 Accountable Care Organizations 18 Strategic Dial Movers Expand Revenue Cycle Management Capabilities • NextGen RCM has been set-up to grow the company’s RCM business and is already seeing strong results. • Reform Provides the Fuel • Core vs. Non-Core Competency • Reimbursement Pressure – Revenue Down • Regulatory Pressure – Costs Up 19 Quick Fact 20 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/) 21 Revenue Cycle Management is a $50 Billion Market