Alliance HealthCare Services Announces Estimated Impact of Final 2014 Medicare Reimbursement Rates

  Alliance HealthCare Services Announces Estimated Impact of Final 2014
  Medicare Reimbursement Rates

             Company Estimates 2014 Revenue Impact of <$3 million

Business Wire

NEWPORT BEACH, Calif. -- December 12, 2013

Alliance HealthCare Services, Inc. (NASDAQ:AIQ) (“Alliance” or the “Company”),
a leading national provider of radiology and radiation therapy services, today
provided additional information regarding the potential impact of the final
2014 Medicare reimbursement rates, which were issued on November 27, 2013 by
the Centers for Medicare and Medicaid Studies (“CMS”).

Using 2013 estimated volume data, the total impact to Alliance is a predicted
reduction of approximately $2.8 million in Medicare reimbursement. With
respect to patients that Alliance bills to Medicare directly under the
Medicare Physician Fee Schedule (“MPFS”), the impact to Alliance will include
a reduction in reimbursement for MRI of approximately $1.4 million, linear
accelerator of approximately $0.7 million, and a portion of procedures that
Alliance bills under-arrangement with its hospital partners for stereotactic
radiosurgery procedures under the Hospital Outpatient Payment System (“HOPPS”)
totaling approximately $0.7 million.

Howard Aihara, Alliance’s Executive Vice President and Chief Financial
Officer, stated, “We are pleased to receive the final rule, which now allows
us to more accurately plan for the impact in 2014. While slightly more than
our initial impact expectations of $2 million, this change in reimbursement
represents approximately 2% of our full year 2013 Adjusted EBITDA guidance
range. This is a manageable amount and will not hinder our ability to do
business or our focus on expanding our relationships and providing added value
to our hospital partners.”

The calculations noted above do not include the decrease under the Medicare
statutory formula, or sustainable growth rate methodology, used to update the
MPFS. CMS projects an additional 20.1% reduction in MPFS payment rates for
2014 if Congress fails to intervene. In the past, when the application of the
statutory formula would have resulted in lower payment, Congress has passed
interim legislation to prevent the reductions. We cannot assure, however, that
Congress will pass similar legislation for 2014 or for future years, or that
any such legislation will fully prevent the reductions required under the
statutory formula.

About Alliance HealthCare Services

Alliance HealthCare Services is a leading national provider of radiology
solutions and radiation therapy services based upon annual revenue and number
of systems deployed. Alliance focuses on MRI, PET/CT and CT through its
Imaging division and radiation therapy through its Oncology division. With
approximately 1,800 team members committed to providing exceptional patient
care and exceeding customer expectations, Alliance provides quality clinical
services for over 1,000 hospitals and other healthcare partners in 44 states.
Alliance operates 487 diagnostic imaging and radiation therapy systems. The
Company is the nation's largest provider of advanced diagnostic mobile imaging
services and one of the leading operators of fixed-site imaging centers, with
127 locations across the country. Alliance also operates 28 radiation therapy
centers, including 17 dedicated stereotactic radiosurgery facilities, many of
which are operated in conjunction with local community hospital partners,
providing treatment and care for cancer patients. With 17 stereotactic
radiosurgery facilities in operation, Alliance is among the leading providers
of stereotactic radiosurgery nationwide.

Forward-Looking Statements

This press release contains forward-looking statements relating to future
events, including statements related to the potential impact on the Company’s
business and revenues of (1) the 2014 Medicare reimbursement final rules, (2)
the reductions in the 2014 MPFS reimbursement rates required under the
statutory formula, and (3) any related Congressional legislation that could
impact such reductions.

In this context, forward-looking statements often address the Company’s
expected future business and financial results and often contain words such as
“expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks” or “will.”
Forward-looking statements by their nature address matters that are uncertain
and subject to risks. Such uncertainties and risks include: changes in
financial results and guidance in the event of a restatement or review of the
Company’s financial statements; the nature, timing and amount of any such
restatement or other adjustments; the Company’s ability to make timely filings
of its required periodic reports under the Securities Exchange Act of 1934;
issues relating to the Company’s ability to maintain effective internal
control over financial reporting and disclosure controls and procedures; the
Company’s high degree of leverage and its ability to service its debt; factors
affecting the Company’s leverage, including interest rates; the risk that the
counterparties to the Company’s interest rate swap agreements fail to satisfy
their obligations under these agreements; the Company’s ability to obtain
financing; the effect of operating and financial restrictions in the Company’s
debt instruments; the accuracy of the Company’s estimates regarding its
capital requirements; the effect of intense levels of competition in the
Company’s industry; changes in the methods of third party reimbursements for
diagnostic imaging and radiation oncology services; fluctuations or
unpredictability of the Company’s revenues, including as a result of
seasonality; changes in the healthcare regulatory environment; the Company’s
ability to keep pace with technological developments within its industry; the
growth or lack thereof in the market for imaging, radiation oncology and other
services; the disruptive effect of hurricanes and other natural disasters;
adverse changes in general domestic and worldwide economic conditions and
instability and disruption of credit markets; difficulties the Company may
face in connection with recent, pending or future acquisitions, including
unexpected costs or liabilities resulting from the acquisitions, diversion of
management’s attention from the operation of the Company’s business, and risks
associated with integration of the acquisitions; and other risks and
uncertainties identified in the Risk Factors section of the Company’s Form
10-K for the year ended December 31, 2012, filed with the Securities and
Exchange Commission (the “SEC”), as may be modified or supplemented by our
subsequent filings with the SEC. These uncertainties may cause actual future
results or outcomes to differ materially from those expressed in the Company’s
forward-looking statements. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date hereof.
The Company does not undertake to update its forward-looking statements except
as required under the federal securities laws.

Contact:

Alliance HealthCare Services
Howard K. Aihara
Executive Vice President
Chief Financial Officer
949-242-5334
 
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