CML HealthCare Signs New Funding Agreement With the Ministry of Health and Long Term Care for Lab Services

MISSISSAUGA, ONTARIO, Oct 13, 2011 (MARKETWIRE via COMTEX) -- CML HealthCare Inc. /("CML") today announced it has entered into a new two-year Performance Based Funding Agreement (the "Agreement") with the Ontario Ministry of Health and Long-Term Care ("MOHLTC") for the periods April 1, 2011 - March 31, 2012 ("Year 1") and April 1, 2012 - March 31, 2013 ("Year 2"). This Agreement, which supplements the existing Base Cap Funding Agreement, is new to the community-based medical laboratory sector and was negotiated between the Ontario Association of Medical Laboratories (the "OAML") and the MOHLTC.

Base Cap Funding Agreement

The terms of the Base Cap Funding Agreement, which expired on March 31, 2011, have been extended and remain in effect. In each of Year 1 and Year 2, base cap funding for laboratory services provided by the sector will total approximately $670 million, which is materially unchanged from total funding received from the MOHLTC for the year ended March 31, 2011. CML's share of the base cap funding is approximately 30.6%.

Performance Based Funding Agreement

In each of Year 1 and Year 2, up to $15.9 million in new performance-based funding will be available to community laboratories. This amount represents 2.4% of the annual sector base cap funding of $670 million. Each laboratory service provider will be funded based on its percent of sector gross billings. Currently, CML's share of sector gross billings is approximately equal to its share of the corporate cap.