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Hey, welcome back to Lawrence Larson Show.
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It's a pleasure to be with you.
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I'm always glad to get to your phone calls and emails at 866-HLARS.
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And if you're a naysayer, we'll put you right to the head of the line at 866-439-5277.
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Send your emails to talk at LawrenceLarsen.com.
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Tom Ryan is president and CEO of the American Association for Home Care.
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Mr.
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Ryan, welcome to the program.
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Thank you.
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Happy to be here.
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Hey, will you help me understand what is going on when Democrat Senators Chuck Schumer and Ron Wyden in the U.S.
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Senate, they want a$5,000 ceiling on what seniors have to pay out of pocket when they use Medicare.
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What's going on there?
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I'm not aware of that situation out there.
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We were talking about the uh outrageous competitive bid program that's going to be uh consolidating our government that's mandated government consolidation.
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So I thought that was the purpose of my call here today.
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No, I I had understood we were going to be talking about Medicare and the cost cap because they're trying to do that.
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But you know, I and I'm yeah we're kind of we're kind of like two ships passing in the night.
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Uh you you had been told you were going to be talking about what?
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Well, the the Medicare rule and how it affects uh patients, it's the Medicare competitive bidding rule.
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It's the final rule which tell me about that.
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Uh about what what is the competitive bidding rule?
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Ordinarily I'm a fan of competitive bidding.
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Well, competitive bidding works when it's done properly and when we can control costs.
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I think it makes some sense.
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But uh as we understand, you know, uh the Trump's agenda on America First and trade policy, uh he believes in small businesses.
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He believes in manufacturing in the United States of America.
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Uh and what this latest program is going to be doing is taking unique product categories like uh continuous glucose monitors and ostomy and urological products and massively uh mandating consolidation.
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Currently, there are hundreds of companies, uh thousands of companies providing these products today.
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I mean, small businesses make up 85% of all uh Medicare demi post suppliers, and um, we create two-thirds of the jobs in America to reduce the number of those suppliers down to nine uh in the CGM uh category nine, seven and eight respectively in urological zenostomy by this ill-conceived uh regional uh delivery program where they're gonna just massively take the uh industry and consolidate it.
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It makes absolutely no sense.
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What's happened in the past with competitive bidding, uh yeah, there are some good points in it when it comes to saving money, but when it comes to what's happened with domestic manufacturing, it took a big toll.
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Um previously to competitive bidding in 2013, uh 70% of the products were sourced in the United States of America.
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I mean, Indicare in Ohio, one of the largest manufacturers, and most people got their products in there.
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Uh currently, 65% are sourced in China.
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Um, if this happens in this product category, do we really want to have uh continuous glucose monitors that have HIPAA compliant information in it uh in Chinese manufacturers' hands?
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No.
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No, no.
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It's an easy but what is what is the stated if it's the if it's a Trump policy, why are they pushing this?
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Where do they see advan the advantage for Americans?
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I think what happened is that they believe that competitive bidding uh is a tool for fraud and abuse.
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Uh I don't think that's the case.
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It's it's a tool for cost-cutting.
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Uh and it has been conceived that we have a problem with fraud and abuse in this industry.
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We all agree with that completely.
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And I want to take my hat off to uh Dr.
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Oz and this administration for the work they've done in fraud, waste, and abuse.
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Uh, but in meeting with Dr.
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Oz personally, I I said, this is really not a fraud tool.
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We we can make competitive bidding work.
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Let's do it in a more regionalized area.
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Uh, let's not do it where you're gonna take out uh, you know, 85% of the industry that currently supplies these products.
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Um, and unfortunately, the rule is moving along rather quickly.
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I testified last week before a small business advocacy association group and and trying to just aways raise awareness.
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We're okay with competitive bidding.
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It's got to be done right, it's got to be done with the basic tenants of an auction
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program in it.
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Uh, you've got to be looking at clearing price, not not limiting the price to 75% of the uh what the bid price is, that's just price manipulation.
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And uh I I think it's uh it's gotten out of hand.
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Some of the careers potentially in CMS um looks at look at this as consolidation, I see that as a positive.
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I do not.
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I do not want to take 85% of the demo suppliers today and get them out of this.
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But it's a lot of people.
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I mean, just generically, Mr.
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Ryan, I mean, if I was told at large you have to buy a particular piece of equipment for what you do, and I'd say, how many uh vendors do I have to choose from?
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And they said, Well, you have two.
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I said, that's not much choice, which means I'm probably going to pay more and get less if I if I'm forced to buy from just two vendors or ten vendors, or if I ordinarily would have dozens of vendors.
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For any product in the world, it's always better product and cheaper price if I have more potential vendors that can tell me that.
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So and it almost sounds like something would run up against antitrust limitations because I'm sure there are people within the industry who'd love to see the number of possible uh vendors cut down to almost nothing, because then they all win and everybody else loses.
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Yes.
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The ones that have a big national footprint, some of them feel they can scale up and make this happen.
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Obviously, they're members of mine as well.
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Uh, but we got to say there's a growing population of patients who need these products, and there's business there for everybody.
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Uh but at the end of the day, you're absolutely correct.
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Uh, if you do have one round of competitive bidding, you're gonna have an oligopathy.
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Uh, and at the next round, you're gonna see prices that are gonna be higher.
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It's just it's you know, it's obvious.
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Or or the worst case scenario, like happened in the first round of competitive bidding, the quality of care, the quality of the product, uh the and the standard of care begin to change.
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Uh like I say, there are several uh U.S.
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manufacturers that provide CGMs today, some of the big ones, Abbott, DEXCOM.
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Uh I don't think we want to see um FDA approving, again, Chinese-made uh products coming into the USA.
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Talk about dirty.
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Mr.
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Ryan, I'm talking to Tom Ryan, who's presidency of the American Association for Home Care.
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Who's pushing this agenda to gigantically reduce the number of potential vendors and then say you've got to do all your business with these 10 instead of doing business with the other few dozen that are out there that are potential bidders?
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This is the final movie came out of CMS.
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Uh so CMS is the one ultimately pushing it.
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Uh again, we have had uh good conversations with Dr.
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Oz.
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We've had some conversations with others in the uh the agency, uh, trying to get them to understand that they've got to slow this thing down and get it done right.
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You pushed it too far, you're making great progress on fraud, waste, and abuse, you're finally working with the Treasury Department, tracking where the dolls are going.
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You're looking at criminal uh elements in this uh industry.
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These these are um businesses that are not, you know, reputable DME businesses, these are criminal chains.
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They come out of Russia, they come out of China, they come out of Somalia.
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And you've finally done a great, great job on beginning to make headway on fraud, waste, and abuse.
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We're working with you as an industry to do it.
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Just because some career levels believe that this is a good tool and consolidation is going to help with fraud, waste, and abuse, it's not.
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So this is one of the reasons I want to get the message out loud and clear.
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We started with a good uh you know meeting with small business last week, hope to have hearings on the house side, hope to have a legislative bill out that slows the process down, work with the stakeholders, uh, put a technical advisory panel together.
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Let's determine how we can take a product that's a evolving new technology like CGMs that saves hundreds of thousands of dollars by taking these fragile patients and getting them uh have constant monitoring of their blood sugar levels.
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Exactly.
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Tom Ryan is uh CEO and president of the American Association of Home Care.
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Ms.
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Ryan, thank you.