Hello, everyone. Thanks so much for joining our second day of our Third Annual Home Care conference. Again, my name is Joanna Gajuk. I'm an equity research analyst at Bank of America. I cover some of the home care companies. So now this session we have lined up is with AdaptHealth. They're one of the largest suppliers of durable medical equipment in the U.S. And today, with us is Richard Barasch, Chairman and interim CEO, and also Jason Clemens, the CFO. And like our operator mentioned, there is a way for the audience to participate. It's not just me, so you can go ahead and pose a question to our speakers, and I'll be more than happy to relay the question here.
But first, I guess, you know, it's quite topical when it comes to the CEO seat, so maybe can you give us an update there? And I guess, Richard, you know, any interest in staying permanently?
No, I'm, you know, I've, you know, been in the seat for almost six months now, and it's been, it's been very interesting. I think we've made a ton of progress in these six months. The staff and the executive group have been welcoming, and welcoming, you know, some of, some of the changes that we've done have been, I think, very helpful. So I, you know, I'm enjoying being in the seat. Now, having said that, we are in the midst of a search and looking for a candidate who can lead the company into the future. We're, you know, as I said, we're pretty excited about what's going on, and looking forward to answering your questions.
Great. So I guess we're just gonna wait then.
Yep. But in the meantime, things are moving along very nicely.
Great. So I guess, and just thinking about from your vantage point, and I guess, you know, Jason can chime in obviously as well, but, just thinking about, you know, long-term view of this entity, right? You have a lot of different businesses, so maybe you can kind of give us a sense of how you're thinking about the growth, you know, for the sleep versus diabetes versus the supplies and DME. There's, you know, different drivers to some degree for these businesses, so I guess it would be helpful to just, you know, give a lay of the line of your thoughts around the entity and the different-
Sure. I mean, I'll give the overlay to Jason, make sure I don't say anything that I shouldn't say. And he'll chime in. You know, our biggest business obviously is sleep. We don't expect to grow 17% next year. You know, we've got some cons coming up that are gonna be harder. You know, we're through the part, the piece where the supply chain was difficult. So, you know, if we can move down to sort of high single-digit growth, we'll be delighted. And we think that's quite achievable. Well, you know, without... And when, you know, we're not ready to give guidance for 2024 yet, so this is all in the nature of just sort of general commentary.
You know, the things that we look at internally, you know, is the census in sleep, it continues to grow, you know, kind of month-over-month, quarter-over-quarter, and that's just an engine of recurring revenue, and we are, you know, feel good about the growth there. So we're, you know, we feel very good about our sleep business. And, you know, I'm sure you're gonna ask about GLP-1 later on, so I'll hold the answer to that. But, you know, even in the face of that, we think, you know, we're very pleased with where we are on sleep. You know, diabetes has been a little bit different. Diabetes, we've, you know, and I think we've been pretty open about acknowledging some of our, you know, some of our challenges in diabetes.
I think we're very much on the way toward bringing diabetes back to the position it should be, which is, you know, growth in line with the industry. You know, again, we're dealing with headwinds from some of the prior, you know, from some of the prior periods. So our revenues have not, you know, we're, we're kind of flat on, maybe even a little down on revenue, but But if you look at it from the inside, you know, the good revenue is trying to outrun the revenue that's more troublesome. And we're, we're, you know, sort of in a tight race with that. At some point, the revenue that we're outracing is going to be smaller, and the, quote, "good revenue" is going to get larger.
So we really do expect to resume growth in 2024. Very excited about that. You know, just a couple of things that are of note, we spent a ton of time in diabetes on making our internal processes better, quicker, you know, less, you know, less, more throughput, more electronic ordering, you know, less human intervention, and we're starting to see the benefit of that. By the beginning of 2024, we will have doubled our distribution force in diabetes, specifically targeted in metropolitan areas where there's a high prevalence of diabetes and which fortunately coincides with a high prevalence of government business as well. So we've taken a bunch of steps to rectify the diabetes issue.
You know, on the sort of the respiratory core HME side, you know, we've—Jason's always talked about, you know, demographic growth, but we're doing better than demographic growth. And I think that's a testament to, you know, what's going on on the ground, where we're gaining share. We've got demographics plus share. There were fewer moms and pops. There's less competition, you know, at the low level. You know, we have some larger competitors, and they're tough, but there's, you know, but we're finding, you know, that we're gaining share in those, in that market as well. You know, we do have a bunch of other smaller businesses. You know, we're looking at every one of them to determine what its proper place is in the company.
Jason, you want to add anything?
No, I think that was pretty good. I mean, the only item I'd just call out again to reiterate, because it's a big deal, is the comparable period. You know, Richard mentioned this, but it just bears repeating. It's gonna be just a very tough comparable period. But again, we're you know high on sequential growth, and we expect to continue to deliver that until we get back to more of a normalized growth rate in 2025.
You know, John, what's kind of interesting has gotten lost in some of the, you know, some of the noise around the story is that this company has grown in revenue and EBITDA every year since 2019, and in a very sort of consistent way. And, you know, we, there certainly has been some noise in the numbers, but there's a consistent pattern of growth in this company, both in terms of top and bottom line.
But when it comes to sleep, you mentioned, right, the GLPs, because obviously that's very topical, continues to be. You know, we, we've done these surveys the last couple of quarters, kind of trying to assess the utilization of these, you know, new therapies by, specifically, you know, the sleep apnea patients. And it's showing, like, the utilization is still low, but it sounds like there's a lot of things, you know, that might be limiting that use. And, you know, some other, you know, additional studies are supposed to be coming out, specifically one on, patients, I guess, on, you know, with sleep apnea condition. So maybe that could be a, you know, a driver for increased utilization.
So how do you, how do you kind of think about this progressing, you know, as time passes, and how, I guess, how could this broader use of GLPs impact the business eventually?
Yeah, that, you know, it's, you know, it's a great question, and, you know, other than, you know, quote, fixing and improving diabetes, this is the most topical thing for us as well. We're on sleep now, so, you know, we understand that there's a theory that the TAM is going to decrease at some point, and the growth rate may slow. You know, BA came out with a study. One of you came out with a study that said only 3% of people using GLPs who are on CPAPs can discontinue. If that is the case, then, you know, it's much less of an issue than we would anticipate.
You know, there's also a lot of, you know, questions about, you know, attrition, whether people are going to stay on the drugs, what happens, how much they're gonna lose, et cetera, the cost of the drugs, who's gonna cover it. From our perspective, and, you know, I'm giving you a personal view, GLPs are gonna matter as time goes on. There's no issue about that. And, and I'm very happy about that as a human being and as a, you know, as an American. If Americans get healthier, that's a good thing for everybody.
Specifically for our sleep business, even if, and by the way, I am a proponent of the theory that more conversation about sleep apnea is going to increase the funnel of people coming in, because sleep apnea is still highly, highly under-diagnosed, and even when diagnosed, highly under-treated. So I think there's a, you know, there's an additional TAM out there that we're not even considering yet. So having said all that, having given you all the qualifications, let's assume that there's going to be pressure. Our view is that we're the largest in the category. We can keep building share. We've got a very vibrant distribution force, and we'll continue to make our presence known in our markets and continue to build our census.
Two, is we're highly focused on, you know, what I'll call the middle-of-the-income statement, which is the cost of doing business. We're bringing technologies to bear. You know, we're leaders in electronic ordering. We're leaders in, you know, in sort of bringing, you know, new technology to bear so that we can be even more efficient than we are. And we continue to think that given our size and given our investments in technology, we'll be able to improve margin. But what we also think is very interesting is we put business on the books, and we have an attrition rate, and we think we can improve the attrition rate, and a lot of that's gonna do with our commitment to doing more for our members and providers than just providing equipment.
We're in the process of standing up a bunch of pilots that will allow us to use the vast amount of data that we've got in our midst to improve the sleep health, and as I think we've talked about, a lot of our sleep members also have diabetes, so work with them on the comorbidities as well. So, you know, we're not putting our head in the sand on GLPs. You know, we're gonna. Our job is to just be much better at what we do, so that even if there's a slightly lower TAM, we're still gonna be the vast leader in the category.
Right. And I want to say, at some point, you had mentioned you also will be collecting your own data, right, on that sleep apnea use, or the sleep apnea patients using the GLP. So when do you think you will have enough data to kind of better sense, to get a better sense, you know, of the impact? And I guess, do you expect, you know, the readout on the study in March to kind of change the utilization by this patient cohort?
Well, you know, yes, it's not, you know, again, I assume you're talking about the Lilly studies. Yeah, we, you know, again, you know, we're watching like everyone else to see what it says. You know, our surveying shows that people in our sleep population, many of them are already taking GLPs. You know, this isn't new. You know, Ozempic didn't show up in three months ago. You know, the Ozempic song is like an ear-worm in my head sometimes after I watch a football game. And, you know, so it's not new. So, let me step back. We think about 25% of our sleep patients are also diabetics, so many of them are already taking GLPs for their diabetes.
So far, it is working out in concert with their sleep therapy, not in opposition to their sleep therapy. That's, that's not a conclusion. That's a supposition based on what we're seeing so far. In order to go from a supposition to a conclusion, we're going to need longitudinal studies about what happens to the cohort of members who have come in, and what happens to them over a period of time, and whether the GLP actually affects their utilization of CPAPs. But we expect, you know, much of our population to be, to be taking GLPs.
Right. Because also on the flip side, you mentioned, right, the, you think that just GLPs being on everyone's minds, like, actually could increase the penetration of the sleep, you know, being actually diagnosed. And the other dynamic, right, there's data from Dexcom and the other makers of the CGMs, right, that they argue that the GLPs user actually get on CGMs to monitor the disease, right? So how could this dynamic impact your long-term growth outlook for, for diabetes?
No, it's, you know, look, I think it's, you know, the, the. It's more of a, it's more of a specific connection between going on GLPs and monitoring. You know, that makes all the sense in the world because they're not the same monitoring exists in sleep, except for utilization, not for conditions. So it makes perfect sense that if you're on a GLP and you're taking care of yourself, that you're going to want to know how you're doing on a, you know, from your sensor. So we completely agree with the Dexcom view. You know, the view on sleep, you know, is more like, I know this is, you know, way back in history, when DVDs came out, everybody thought the movie theater business was going to shut down.
Well, not exactly. It made everybody go to more movies because it increased the, you know, sort of the visibility of the entire industry. And you're hearing more about sleep now from payers, from cardiologists. It's become, you know, everybody knows intuitively that, not even only intuitively, from studies, that that getting the proper sleep is going to make someone healthier downstream. So increased visibility is going to be nothing but helpful for our business.
We were talking about diabetes, so I want to stay on that one.
Sure.
When it comes to next year, right? So you said sleep very top comms, but you expect diabetes actually to grow into next year. There's a couple of different, right, dynamics, so maybe we could talk about that and flesh it out there. Right. So first, I guess, is there actually more business shifting to the pharmacy benefit? Because I remember we would talk about there's some plans where it could go both ways. So does it mean that, you know, there could be continuation of that shift into the pharmacy? And I guess on the flip side, right, the pump revenues, right, will be down again next year, it seems like. And then you talk about also the government business growing, but that's clearly lower revenue per patient.
So kind of how do you put all these things together, you know, that makes you think that, you know, but in totality, you could, you could grow next year?
Yeah. I mean, you know, again, I hate to use this analogy, but we're out, we're trying to outrun some of the negatives right now, and there's plenty of good business going on the books to replace the headwinds of business moving to pharmacy. But we're going to, as part of 2024, we're going to not shy away from being in the pharmacy side of the business. You know, margins, while lower, will still have contribution, and will still increase our census and increase our importance to our various constituents. I'm going to turn it to Jason to be more specific about the impact of pumps.
Yeah, a couple of things, Joanna. I mean, I mean, firstly, you know, a pretty good proxy for our pump business is, you know, what Tandem is doing. We're a big Tandem shop. They're an important manufacturer in the space, and, and we distribute a lot of, a lot of Tandem pumps. And so as the Insulet Omnipod 5 tubeless pump continues to gain share and, and take business from not just Tandem, but Medtronic, you know, we expect that to continue in 2024. We, we do think it will be muted, year-over-year versus what we saw this year, which was, you know, between a $35 million and $40 million headwind. You know, we said, look, just high level might be half that next year.
Of course, when we guide, we'll be more specific, but I think that feels reasonable to us based on what we're seeing in the trends and the data. And so to Richard's point, we have a little bit of a headwind, not such a little bit, but you know, $20 million, up to $20 million headwind in the pump side of business for next year. Regarding the pharmacy shift, as Richard said, I mean, we're shifting strategy there to just reposition and get aggressive. Again, get back to growth mode as it relates to pharmacy. You know, compared to last year at this time, there are far fewer switchers, if you will, that we know about today. I mean, there's been about five Medicaid.
Well, not about, there have been five Medicaid offices that have signaled shift, as well as two commercial payers. But, you know, the benefit is that we've got the visibility out the windshield now to know that, and to detect that, and to plan against that. You know, finally, I'd say our CGM business, I mean, it's grown year to date, you know, through the end of September. It's up a little over 2%, which is not acceptable in our minds. You know, we are investing aggressively to install additional sales force focused on selling diabetes products and, you know, in MSAs that we just haven't operated in previously. You know, so we intend to get back to growth mode.
I think you'll see us be very tempered about the expectations on that until we start proving out, you know, the sizable investments we're making in that sales force. But, you know, we are changing the way that we're attacking and we're going to market.
So I guess, how hard is it, when it comes to, you know, growing the government business and putting the sales force in place? I mean, I guess, who are you taking the business from, right? Essentially, and how hard is it for these sales people to kind of overcome it and kind of market share shift, essentially?
Yeah, I think some of the market share shift is gonna come from people who are finger pricking, not just the other people in the CGM business. You know, you know, one of the interesting things that we've learned, particularly in Medicaid populations, is that there's still a high prevalence of finger sticking. And as we get more programmatic in the business, I think we're gonna be... and as more governmental payers, including Medicaid payers, cover more of the CGM possibility, we're I think that's going to be a big part of where we're gonna get business. So it's not just from being a better competitor, it's going after companies, after, not companies, but after segments of business that are under-penetrated at this point.
And when it comes to, you know, targets, I guess we talk about, you know, how you're thinking about the top line growth. Obviously, next year has all these different dynamics, but I guess, by now it's gonna be a while ago, but I guess September 2022, right, the company had outlined this, you know, 2025 targeted margin. So how should we think about that? Is there a reason to think, you know, 25% target is still achievable with, you know, everything that has been happening, you know, this year and into next year?
Yeah, I think, Joanna, I'd say that, look, when we look back, I guess, a little over a year ago now, our expectations of 2025, I mean, a couple of things have changed. I mean, one, diabetes growth, right? We were wrong, right? It has not performed as we expected in the model for 2025. You know, frankly, we think it's premature to formally change or withdraw that guidance until we've got a new CEO in place. You know, and we have a chance to respond formally to our longer term plan and what we think those targets should be, because after all, we'll have a new leader that's signing up for them, and you know, we're just...
Until we have the person in place, it's just, it's just premature to do so. I'd say big picture in terms of margin as well as free cash flow conversion, we are still comfortable with those targets. The question is on timing. You know, and again, we won't have anything formal to say here on this call, but, you know, I think to expand, you know, four to five points of margin between now and 2025, and that's a high roll. But, we think big picture that they are good targets, and I think you'll see us formally respond with the timing on those targets, here in the coming quarters.
Great. It makes sense. I guess, yeah, so we're gonna wait to see the CEO announcement, and then hopefully, not long after that, there's gonna be a more update that's quickly understood, there. And another, you know, big topic is the Humana contract, right?
Which had some initial bumps, right? So maybe there's also a question from the audience, actually, on that. Anything, I guess, in Q4 that differs from Q3 that you have seen? And I guess the bigger picture question, you know, does this kind of initial roll-out taking, you know, longer, I guess, than initially expected, does it impact the long-term view of this contract? And as it relates to, you know, this Humana contract, where I guess the thesis would have been that, you know, if things go well, that should lead to more of those, right? So does that, you know, initial roll-out taking slower, does that impact your view of, you know, what could come, you know, in some time, when it comes to winning more of those?
Richard, do you wanna start? And then I'll-
Yeah. I mean, I can just start with the second one. We're highly motivated to do more of the same sorts of things. And I think we're seeing, you know, good reception from potential participants, partners in that business. You know, the sales cycle is long, so you know, it's going to take a little bit a while, but we think that there's a... We think that's very fertile for us going forward. You know, Jason, and I'll pass to you on the the financial side of then.
Yeah. Yeah. I'd say, look, there, there's no change in our view of the profitability of the contract once we've got substantially all the patients transitioned. You know, so we believe that the structure works great for Humana. I think it works great for us, great for providers, great for patients. And so there's no change at all in our view of the profitability of the contract, as well as, as Richard said, you know, the TAM, if you will, and our desire to chase it. I'd say that, you know, it really comes down to timing. We've learned a lot through this transition already. I'm sure there's more to learn, and it's a long list.
I think at the top of that list is, you know, recognition for a patient that is on a rental census with a competitor, and that might have been on that rental census with a competitor for a very long time. Well, you know, the way that we've structured the contract, frankly, there's a bit of an outsized penalty, if you will, for every patient, you know, at that patient level, that we don't transition timely or as soon as we, you know, as we'd like. And that's what's getting us.
You know, we, we talked, I think, in detail about that in the, in the earnings call, and you know, what's changed in Q4, I mean, we've, we've talked about, you know, our, our expectation to do $5 million better, top and bottom line, in Q4 than we did in Q3, so a sequential improvement. That comes as a result of transitioning more and more patients. We're, we're transitioning about 1,000 patients a week, net. You know, if we continue that pace, we should be substantially transitioned by the end of the first quarter. We think we'll exit Q4 with a profitable run rate, and we're very confident we'll, we'll have a profitable contract in Q1, and then, and then that'll continue for the future.
So on that comment, I guess when it comes to being substantially down by the end of Q1, right? And then coming back to this being profitable, so that seems like there will be a incremental year-over-year EBITDA coming through from this contract, right?
Correct. Yes, correct.
Right.
And we'll help frame that a bit more specifically when we turn to guidance.
All right. And then I guess at the, you know, steady state, because obviously now there's been a lot of, that, you know, kind of delayed, I guess, in transition of these patients. But I guess, how would you frame, this contract resulting in, market share gains? Because I guess that, that's clearly what's supposed to be happening here. And then what comes with that, my question is, the economics, right? Is it, that the PMPM rate you're getting, is offset by more volumes, or actually this is more revenues, per patient, coming through versus what, you know, would have been just regular fee for service going on?
Well, I'd say, you know, there are some specific questions we'll answer, there are some that we won't. But what I could offer is that, the PMPM rates that were priced, modeled, accepted, we're very comfortable with all those. You know, that's what supports our view on the profitability and sustainability of the overarching contract. I would say next, in terms of market share, yeah, for these 33 states, if you're a Medicare Advantage HMO patient, we're the only game in town. And so, you know, not so on the PPO side of the business. I mean, we have a preferred relationship with Humana and, you know... But, in terms of HMO, yeah, it's absolutely incremental to market share.
You know, finally, I think that being with a partner like Humana, who's continuing to grow, you know, they're obviously a big player in Medicare Advantage, you know, we'll grow with them. You know, I think that there's various views on expectations of their growth for 2024. And, you know, again, if you're in these 33 states, I mean, these patients will come onto our census on a PMPM, and then we'll take care of them through the services we provide.
So again, about the PMPM rate, and you made it sound like you're comfortable with that, and that's all you're willing to say. But is there also, like, a quality bonus or anything around the outcomes, or such?
Yeah, very good question. There are not bonuses attached to patient outcome nor to quality components or patient sat or things like that. There are SLAs in the contract. We meet weekly with Humana and weekly reporting, and we've got a dedicated onshore operation that all they do is manage patient concerns and patient potential escalations for this Humana population. So it's, you know, it's part of the infrastructure that we've invested in to support the contract. You know, this team is doing a great job. We are doing better than projected in terms of those key metrics that are obviously very important to our patients and as important to Humana.
We think in terms of that part of the contract, yes, the timing has been a challenge, but in terms of an orderly transition and properly taking care of the patients that are coming onto census, you know, we're doing a good job so far.
Okay. But is there a view that there could be some modification to it, and you would be also kind of more taking risk as in, like, you know, getting some extra money for outcomes?
Well, it's not structured that way today. I think our view is, look, we intend to hit it out of the park for Humana, and these patients and, you know, make sure everybody is, you know, we're doing a good job everywhere. And, yeah, we hope to win more business, whether it's with Humana or other providers, other payers. I mean, we, you know, we want to demonstrate that it is indeed possible to take this much business at one time in all of these markets, and we're best built to support that. And so that's. That, that's really a big picture of what we're trying to accomplish.
Okay. So I guess, how will you evaluate, right, the success of this contract? Because, I mean, so far, right, it's on the list, but, I guess when you will be able to say, like, "Hey, this is, you know, performing well , or maybe above expectations?
Well, I mean, I think like anything else, it's quarter by quarter. I mean, you know, we've provided some perspective without the actual numbers in terms of profitability. You know, so we'll report out in Q4, and again in Q1. I think in terms of, you know, SLAs and meeting Humana's expectations, you know, I mean, for, I think, competitive reasons, we're not going to be so specific about that. But I think at the end of the day, the measurement will be, can AdaptHealth structure and sign more deals like this? Potentially with Humana, potentially with other payers, you know, but strategically, this is where we're going, so we'll be reporting on that.
So when it comes to that particular one, you mentioned payers, but is there interest from other entities, so like complicated physician groups or maybe even, like, some of these health systems, right, that offer hospital at home and need like a, you know, DME being delivered to home on time and, you know, maybe these are smaller, but still, there's a lot of logistics, so I know-
You, you want a job in business development?
Sure.
No, no, I'm big. You know, this is exactly where we're going. We want. You know, we've been—company, Adapt, has been operating largely on individual referrals from specific doctors for specific patients. We have a lot of hospital relationships, but again, those are largely individual, individual referrals that have to be processed on an individual basis. Getting large, large pieces of business at once is good for everybody.
I guess maybe we still have a couple of minutes left. When it comes to Medicare by reimbursement, so there's a couple of things there. I guess this year rate update will be likely less than last year. I don't think we know it, or do we know it? And I guess you know what are your expectations, I guess, for the Medicare rate update, and what what I'm trying to get at is that, is that gonna be enough to offset the labor costs? How do you think about wage growth into next year?
Sure. Let me take that in parts. I would say that, you know, just high level, we would expect to maintain or beat labor as a % of revenue in 2024 versus 2023. So that's probably all I'll say about labor until we get to, you know, guiding early, you know, call it February, late February next year. I would say in terms of kind of the regulatory environment, reimbursement, it's—look, it's a complicated year. I say, it seems like we say that every year. You know, the DMEPOS Fee Schedule, I think, as many know, is an inflation-anchored measure. Through June of the prior year, they pulled the previous 12 months on CPI-U, and that number we know today.
That number's around 3%. You know, secondly, which is down considerably, more than half to your point, over the prior year. So I think it is a reasonable assumption to believe that, you know, DMEPOS Fee Schedule increases would be down versus the prior year. Secondly, there's a labor productivity factor that Medicare applies against that inflation measure. It, you know, hard to estimate that, but, you know, you can look at the prior year to maybe come up with some assumptions, but, you know, the company, I think, you know, we're not gonna, we're not gonna speculate on that until the rates are printed. Frankly, the rates could be printed as early as this week.
You know, historically, they are kind of the sixth, seventh, kind of in that timeframe in December. So, you know, I think everybody in the market knows, I mean, we'll, we'll know soon. It is less clear than that is, you know, what's referred to as the 75/25. You know, for those in the call not familiar, you could just Google and, you know, DME 75/25, it'll, it'll come right up to get some context. But, you know, in summary, the industry benefited through the CARES Act with increased reimbursement. And, it, you know, those rates were extended as part of the PHE, and then ultimately, extended through the end of 2023. So those, those rates are set to expire at the end of this calendar year.
Now, there's a lot of activity in Congress on this. There's an act in the Senate, as well as a bill coming out of the Energy and Commerce Committee in the House, and you know, we won't speculate on the result of this, and the result of this might not be known until as late as February, frankly. And so, certainly our eyes are on it. Certainly, you know, everyone in the industry is doing what you'd expect in terms of just sending the message, you know, to Congress, that look, inflation has been ripping in all industries, but in ours, in particular, for a number of years, and you know, this reimbursement is critical, not just for the national and the regional operators, but for the mom-and-pops to sustain.
You know, so I think that the, you know, the messages have been sent, and we'll see what happens.
I guess the last piece on the reimbursement, the competitive bidding, so CMS, last time around, when they tried to do it, they, you know, kind of concluded that, you know, it wouldn't really get much of a lower prices, but, and, you know, they, they put a pause, but they left the door open where to come back, so maybe they were-
Sure.
Gonna kind of include new categories. So kind of your thought process, like, would you expect this to come back to the point where, like, in 2025, we, we might see this, or it's so late by now, it will be more like 2026?
Well, what we know today is it won't be 2024. That, that's been formally delayed. And, to your point, in the last round of competitive bid, the CMS ended up canceling 14 of the 16 categories. You know, because they didn't achieve the economic benefits that they expected. Look, it's hard to say. I mean, there has been no formal cancellation of the program, so we'd expect the program to be reintroduced at some point. You know, again, we won't speculate today on when that could be, other than it won't be sooner than 2025.
But I want to follow up, I mean, we spoke about this earlier, but I guess somebody wants to maybe pinpoint an update to the timing for the CEO announcement. So, yeah, is there a way to think about this? Like, you know, should we expect the next, you know, three months or six months or any kind of, you know-
I don't... you know, it's, you know, we're the search committee is busy at work. I don't want to speculate, but it's top of mind, top of priority.
No, definitely. Yeah. So-
We want to get it right.
No, exactly. You definitely want to make it right, get it right. So thank you for this. And Richard, Jason, thank you so much for the time. We really appreciate you joining us today, and thanks to the audience. And happy holidays, and we still have one more session, so those interested in the home infusion, please stay tuned for the next session. Thank you.
Joanna, thanks for having us.