Medicare and Medicaid Coverage: Therapies and Supplies for
Inflammatory Bowel Disease (15-DEC-05, GAO-06-63).
Inflammatory bowel disease (IBD) affects an estimated one million
Americans. IBD patients often have difficulty digesting food. As
a result, they may require parenteral nutrition (intravenous
feeding) or enteral nutrition (tube feeding), medically necessary
food products to supplement their diets, and medications. In
addition, some IBD patients must care for their
ostomies--surgically created openings for the discharge of
digested food. IBD advocates have recently expressed concerns
regarding the ability of IBD patients to obtain the health care
they need. The Research Review Act of 2004 directed GAO to study
the Medicare and Medicaid coverage standards for individuals with
IBD, in both home health and outpatient delivery settings. GAO
(1) identified the Medicare and Medicaid coverage standards for
five key therapies used for the treatment of IBD and (2)
determined what specific supplies used in these therapies
Medicare and Medicaid programs will pay for. In this work, GAO
examined Medicare's national and local coverage policies and
conducted a survey of Medicaid programs in the 50 states and the
District of Columbia.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-63
ACCNO: A43318
TITLE: Medicare and Medicaid Coverage: Therapies and Supplies
for Inflammatory Bowel Disease
DATE: 12/15/2005
SUBJECT: Diseases
Drugs
Health care programs
Medicaid
Medical equipment
Medical supplies
Medicare
Standards
Therapy
Prescription drugs
Inflammatory Bowel Disease
******************************************************************
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GAO-06-63
Report to Congressional Committees
United States Government Accountability Office
GAO
December 2005
MEDICARE AND MEDICAID COVERAGE
Therapies and Supplies for Inflammatory Bowel Disease
Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel
Disease Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory
Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel Disease
Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel
Disease Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory
Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel Disease
Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel
Disease Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory
Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel Disease
Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel
Disease Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory
Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel Disease
Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel
Disease Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory
Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel Disease
Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel
Disease Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory
Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel Disease
Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel
Disease Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory
Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel Disease
Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory Bowel
Disease Inflammatory Bowel Disease Inflammatory Bowel Disease Inflammatory
Bowel Disease Inflammatory Bowel Disease
GAO-06-63
Contents
Letter 1
Results in Brief 4
Background 6
Coverage of IBD Therapies Is Subject to Medicare and Medicaid Standards 11
Variation in Medicare and Medicaid Programs' Coverage of Specific Supplies
Related to IBD Therapies 18
Agency Comments 27
Appendix I Scope and Methodology 29
Appendix II Reported State Medicaid Program Coverage of Therapies Used by
IBD Patients 33
Appendix III Reported Parenteral Nutrition Therapy Coverage Standards by
State Medicaid Program 35
Appendix IV Reported Enteral Nutrition Therapy Coverage Standards by State
Medicaid Program 38
Appendix V Reported Medically Necessary Food Products Coverage Standards
by State Medicaid Program 41
Appendix VI Reported Parenteral Nutrition Supplies Covered by Medicaid in
Home Health and Outpatient Delivery Settings 43
Appendix VII Reported Enteral Nutrition Supplies Covered by Medicaid in
Home Health and Outpatient Delivery Settings 45
Appendix VIII Reported Percent of States Covering Ostomy Supplies in Home
Health and Outpatient Delivery Settings 47
Appendix IX Reported Information on Medicaid Coverage of Ostomy Supplies
and Related Limits 50
Appendix X Reported Medically Necessary Food Products Covered by State
Medicaid Program 52
Appendix XI Summary of Drugs Listed in Our Survey to Treat IBD That Are
Covered by Medicaid for Adults and Children 55
Appendix XII Comments from the Centers for Medicare & Medicaid Services 58
Appendix XIII GAO Contact and Staff Acknowledgments 60
Tables
Table 1: State Medicaid Programs That Reported Coverage of Five IBD
Therapies for Adults and Children 11
Table 2: State Medicaid Programs That Reported Payment of Common
Parenteral Nutrition Therapy Supplies for Adults and Children in Home
Health and Outpatient Delivery Settings 20
Table 3: State Medicaid Programs That Reported Payment for Common Enteral
Nutrition Therapy Supplies for Adults and Children in Home Health and
Outpatient Delivery Settings 21
Table 4: Median Percent of State Medicaid Programs That Reported Covering
Ostomy Supplies in Home Health and Outpatient Delivery Settings 24
Table 5: Number of State Medicaid Programs Covering Medically Necessary
Food Products for Adults and Children 25
Figure
Figure 1: Number of State Medicaid Programs That Reported Covering Drugs
Listed in Our Survey to Treat IBD 26
Abbreviations
BIPA Benefits Improvement and Protection Act of 2000 CMS Centers for
Medicare & Medicaid Services DMERC Durable Medical Equipment Regional
Carrier FDA Food and Drug Administration HCPCS Health Care Common
Procedure Coding System HHS Department of Health and Human Services IBD
inflammatory bowel disease LCD local coverage determination LMRP local
medical review policies NCD national coverage determination
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
United States Government Accountability Office
Washington, DC 20548
December 15, 2005
The Honorable Charles E. Grassley Chairman The Honorable Max Baucus
Ranking Minority Member Committee on Finance United States Senate
The Honorable Joe Barton Chairman The Honorable John D. Dingell Ranking
Minority Member Committee on Energy and Commerce House of Representatives
The Honorable William M. Thomas Chairman The Honorable Charles B. Rangell
Ranking Minority Member Committee on Ways and Means House of
Representatives
Inflammatory bowel disease (IBD) refers to two chronic autoimmune diseases
of the intestinal tract-Crohn's disease and ulcerative colitis. These
diseases may result in abdominal pain, weight loss, fever, rectal
bleeding, and diarrhea, and are associated with a decreased quality of
life. IBD generally involves periods of active inflammation alternating
with periods of remission.
The estimated one million Americans with IBD1-10 percent of whom are
children-have difficulty digesting food and may require different
treatments, depending on the specific nature of their condition. As a
result, some IBD patients may periodically require parenteral
nutrition-the provision of nutrients intravenously. Others may receive
enteral nutrition, which is delivered through a feeding tube inserted into
their noses or stomachs. Some IBD patients may require nutrition in the
form of medically necessary food products, such as formulas that are more
easily digested than normal foods.2 IBD patients may also require
medication, and some may have ostomies-surgically created openings in
their abdominal wall for the discharge of digested food-and therefore
depend on a pouching system to collect, contain, and manage disposal of
solid body waste.
1According to the Crohn's Disease and Colitis Foundation of America, the
number is evenly split between the two diseases.
A number of IBD patients depend on Medicare and Medicaid,3 the nation's
largest health insurance programs, for coverage of their treatment.
Medicare serves approximately 41 million elderly and certain disabled
beneficiaries and is administered by the Centers for Medicare & Medicaid
Services (CMS), an agency within the Department of Health and Human
Services (HHS). Based on the Social Security Act,4 CMS, and the claims
administration contractors that assist it in administering the Medicare
program, determine whether specific medical procedures, devices, and
services should be covered. Medicaid is a federal-state program that
finances health care coverage for approximately 54 million low income
individuals, about half of whom are children. Under CMS's oversight, each
state administers its own Medicaid program. Within broad coverage
requirements set by law and CMS, states have discretion to develop
specific coverage policies for their Medicaid programs. In fiscal year
2004, Medicare paid about $298 billion for services and supplies provided
to beneficiaries while Medicaid programs paid close to $272 billion.5
Over the past few years, IBD advocates have tried to raise awareness about
IBD and the challenges IBD patients face, including concerns about
obtaining the health care that they need to manage their disease. The
Research Review Act of 2004 contains several provisions related to IBD,
including a mandate that we conduct a study on the Medicare and Medicaid
coverage standards for IBD patients.6 The act required us to focus on five
specific therapies-in both home health and outpatient delivery
settings7-parenteral nutrition, enteral nutrition formula, ostomy care,8
medically necessary food products, and drugs approved by the Food and Drug
Administration (FDA) for Crohn's disease and ulcerative colitis.9 In this
report, we (1) identify the Medicare and Medicaid coverage standards for
these five therapies, and (2) determine which specific supplies used in
these therapies Medicare and Medicaid programs will pay for in home health
and outpatient delivery settings.
2Enteral nutrition formula may be also consumed orally, depending on the
patient's condition, instead of via tube-feeding. In this report, we
consider enteral nutrition formulas that are consumed orally as medically
necessary food products.
3The number of Medicare and Medicaid beneficiaries who are IBD patients is
not known.
4Medicare was established in 1965 in Title XVIII of the Social Security
Act and is codified as amended at 42 U.S.C. S:S: 1395-1395hhh.
5Medicaid payment includes federal and state contributions.
6Pub. L. No. 108-427, S: 4, 118 Stat. 2430, 2431.
To determine Medicare's coverage standards for the five therapies, we
obtained and reviewed relevant Medicare laws, regulations, national
coverage policies, and manuals to identify pertinent material. We also
interviewed CMS officials and the medical directors of the Durable Medical
Equipment Regional Carriers (DMERC)-the four claims administration
contractors involved in making local coverage decisions for applicable
therapies in our study. In addition, we discussed and obtained
documentation regarding specific supplies used in the five therapies that
Medicare would pay for in both home health and outpatient delivery
settings.
To obtain information on Medicaid's coverage of the five therapies, we
developed a survey that we sent to Medicaid offices in all 50 states and
the District of Columbia10 and asked them to identify applicable coverage
standards. The survey asked state officials to identify specific supplies
their Medicaid program would pay for. It also asked them to note any
distinctions between supplies covered in home health and outpatient
delivery settings, and to indicate whether they had different coverage
policies for adults and children.11 Our survey was generally based on
relevant Medicare coverage standards and provided states with the
opportunity to describe how their coverage policies varied from Medicare's
policies and to report other pertinent standards they may have
established. In addition, our survey included a list of drugs to treat IBD
that was developed in consultation with the FDA. Specifically, the survey
listed nine brand name drugs and two generic drugs that the FDA told us it
had approved to treat Crohn's disease and ulcerative colitis.12
7For purposes of this study, we defined home health care as a situation in
which medical supplies are provided to the patient by a home health
agency, in accordance with a plan provided by a physician. We defined
outpatient care as any situation, in which a patient receives medical
supplies, that does not require an overnight hospital stay, such as a
visit to a doctor's office, or a situation where the patient
self-administers the supplies at home, without the assistance of a home
health agency.
8The Research Review Act of 2004 specifically directed us to determine
coverage of ostomy supplies; consequently, we did not include any other
items and services that may relate to ostomy care in this study.
9In response to the Research Review Act of 2004, we also conducted a study
of the problems IBD patients encounter when applying for disability
insurance benefits under Title II of the Social Security Act. See GAO:
Social Security Disability Insurance: SSA Actions Could Enhance Assistance
to Claimants with Inflammatory Bowel Disease and Other Impairments,
GAO-05-495 (Washington, D.C.: May 31, 2005).
10Throughout the remainder of this report, we will refer to District of
Columbia as a state and count it as such when describing our survey
results.
We received responses from all of the states and reviewed these data for
obvious inconsistency errors and completeness. For responses that were
unclear or incomplete, we contacted survey respondents to obtain
clarification before conducting our analyses. When necessary, we compared
our electronic data files of survey responses to the actual surveys that
we obtained from states. Based on these efforts, we determined that the
data were sufficiently reliable for the purposes of this report. To obtain
detailed background on the specific supplies that are associated with each
of the therapies, we also contacted representatives from eight
organizations representing patients with IBD, and medical experts. (See
app. I for additional information on our scope and methodology.) We
conducted our work from December 2004 through November 2005, in accordance
with generally accepted government auditing standards.
Results in Brief
Medicare generally provides coverage for three of the five therapies we
reviewed-parenteral nutrition, enteral nutrition formula, and ostomy
care-for beneficiaries with IBD. Coverage is available in both home health
and outpatient delivery settings. Medicare has established standards that
must be met for parenteral and enteral nutrition to be covered. Patients
must have specific medical conditions in order to receive coverage. For
example, Medicare will cover parenteral nutrition for a patient with a
severe gastrointestinal condition that impairs absorption of nutrients,
and enteral nutrition for a patient with a functioning gastrointestinal
tract who cannot maintain adequate weight and strength because food cannot
reach the digestive tract. In addition, Medicare requires such medical
conditions to be well documented in order to cover these two therapies.
Medicare has one coverage standard governing the provision of ostomy
care-the beneficiaries receiving these supplies have had an ostomy.
Medicare does not cover medically necessary food products. Similarly,
Medicare does not cover most drugs used by IBD patients-these drugs are
typically self-administered prescription drugs, and currently, they are
not covered by the program. However, medically necessary drugs, including
those that are self-administered, will be covered by Medicare's voluntary
prescription drug benefit, which becomes effective in January 2006. Unlike
Medicare, each state Medicaid program covers, to some extent, at least one
of the five therapies, including medically necessary food products and
drugs used to treat IBD. Our survey results also indicated that each state
Medicaid program has its own coverage standards; however, most states'
standards are generally comparable to Medicare's coverage for parenteral
and enteral nutrition and ostomy care.
11Because Medicare does not cover children, except in very limited
circumstances not applicable to this report, such a distinction was not
necessary for the Medicare analysis.
12The nine brand name drugs listed in our survey were Asacol, Azulfidine,
Canasa, Colazal, Dipentum, Entocort, Pentasa, Remicade, and Rowasa. The
survey also listed the generic equivalents of two of these drugs,
Azulfidine and Rowasa. After we administered our survey, the FDA informed
us that it also considers several additional drugs as valid treatments for
IBD. These drugs are not discussed in this report.
Once Medicare coverage standards are met, the program will generally
cover-with very few restrictions-all medically necessary formulas,
administration supplies, and equipment associated with both parenteral and
enteral nutrition. Medicare will also provide beneficiaries who have had
ostomies with supplies for their ostomy care. Although Medicare has
established "usual maximum quantities" of supplies that typically meet the
needs of ostomy patients, these amounts may be exceeded if the need is
justified. Our survey of Medicaid programs shows variation in the specific
supplies covered for the five therapies. We found that states generally
cover supplies associated with parenteral nutrition therapy. Similarly,
states cover most enteral nutrition supplies. However, states' coverage of
specific ostomy supplies varies. We found that twenty-four states covered
all of the ostomy supplies listed in our survey in both home health and
outpatient delivery settings. Fifteen of these 24 states imposed limits
and monetary caps on these supplies. Further, 10 of these 15 states
reported that, for certain supplies, the supply limits and monetary caps
are rarely or never exceeded. Most states-46-reported covering at least
some medically necessary food products with oral nutritional formulas
being the item most commonly covered. Finally, our survey results show
that Medicaid programs generally cover the brand name drugs and generic
equivalent drugs listed in our survey to treat IBD.
In commenting on a draft of this report, CMS said that we correctly
described the Medicare coverage policies for parenteral and enteral
nutrition and ostomy supplies and provided clarification for our
description of Medicare's coverage policy for prescription drugs that are
not self-administered. It also said that as it proceeds with policy
development, it will continue to give consideration to access issues that
affect Medicare beneficiaries and Medicaid recipients in their treatment
of IBD.
Background
IBD refers to Crohn's disease and ulcerative colitis.13 Crohn's disease
can involve any area of the gastrointestinal tract but most commonly
affects the small intestine, which is responsible for the body's
absorption of most needed nutrients, and the beginning of the large
intestine, or colon. This inflammation can result in excessive diarrhea,
severe rectal bleeding, anemia, fever, and abdominal pain. In addition,
malnutrition or nutritional deficiencies are also common among Crohn's
disease patients, particularly if the disease is extensive and of long
duration. Two-thirds to three-quarters of patients with Crohn's disease
will require surgery-in most cases, to remove the diseased segment of the
bowel and any associated abscess. In some cases, an ostomy to remove the
colon also may be required. However, surgery is not considered a cure for
Crohn's disease patients because the disease frequently recurs. Ulcerative
colitis only affects the colon. This condition causes diarrhea and
bleeding, and can ultimately lead to colon cancer. In one-quarter to
one-third of patients with ulcerative colitis, medical therapy is not
completely successful or complications arise. Under these circumstances,
an ostomy operation may be performed. Because inflammation in ulcerative
colitis is confined to the colon, the disease is curable by this
operation.
IBD may occur at any age, but it most commonly develops between the ages
of 10 and 30. One-third of IBD patients develop symptoms before
adolescence. In such cases, the disease poses special problems because it
can impair children's bodies' ability to absorb nutrients and thus
adversely affects their growth and development.
13About 10 percent of IBD patients exhibit symptoms of both Crohn's
disease and ulcerative colitis. This condition is referred to as
indeterminate colitis.
IBD patients, depending on each individual's unique circumstances, may
rely on one or more of the following key therapies in either home health
or outpatient delivery settings to manage their disease:
o Parenteral nutrition is the intravenous administration of
nutrients through a catheter that carries liquid nutrients
directly into the bloodstream, where they are absorbed by the
body, entirely bypassing the gastrointestinal tract. It is
typically used to treat patients with severe cases of IBD. In such
instances, patients' gastrointestinal tracts cannot tolerate
nutrition by mouth or a feeding tube. The provision of parenteral
nutrition allows the intestines to rest and heal, and may relieve
acute attacks and delay or avoid the need for surgery. Supplies
used in parenteral nutrition include parenteral nutrition
solutions and various products necessary to administer the
solutions to the patient, such as infusion pumps and intravenous
poles. Parenteral nutrition supply kits include supplies necessary
to transfer the solution to the infusion pump, such as tubes, and
sterilization pads. Parenteral nutrition administration kits
include supplies necessary to transfer the solution from the pump
to the patient, such as intravenous catheters, dressings, tapes,
antiseptics, and sterile gloves.14
o Enteral nutrition is indicated for patients with a functioning
gastrointestinal tract but whose oral nutrient intake is
insufficient to meet their nutritional needs. Enteral nutrition
employs a feeding tube to deliver a liquid nutritional formula to
the stomach or small intestine-it is administered either through
the nose or directly through the abdominal wall into the
gastrointestinal tract. For IBD patients, and particularly for
Crohn's disease patients whose inflamed small intestine may not
allow them to absorb enough nutrients, this method-either used
alone, or in combination with food or liquids taken orally-may
restore good nutrition to patients weakened by severe diarrhea and
poor nutrition. In addition, according to gastrointestinal disease
experts, enteral nutrition may have therapeutic effects as well,
by inducing remission. Supplies used in enteral nutrition include
enteral formulas and supplies necessary to administer this
therapy, such as enteral nutrition infusion pumps, intravenous
poles, catheters, and tubes. Enteral feeding supply kits include
supplies necessary to administer the formula to the patient, such
as syringes, tubing to transfer the formula to the catheter, tube
connectors, and sterile gloves.15 Tubing that goes inside the
patient's body to administer the nutrients-i.e., nasogastric
tubing that delivers the formula to the patient's gastrointestinal
system through the nose, or gastrostomy tubing that delivers the
formula through a surgically created opening in the stomach-is
also necessary. Other supplies needed may include additives, such
as fiber, to thicken enteral formulas.
o Medically necessary food products are products that can be
taken orally. They include food supplements, such as the formulas
used in enteral nutrition, and prescription strength vitamins. For
example, because Crohn's disease and surgical procedures that
remove parts of the small intestine can inhibit absorption of
vitamins, fats, and other important nutrients, taking certain
supplements, such as fish oil, antioxidants, and mineral
supplements, may be beneficial for patients with Crohn's disease.
o Medications are often required to treat Crohn's disease and
ulcerative colitis. The FDA has approved both brand name drugs and
generic drugs to treat IBD. These drugs are typically
self-administered and taken to reduce inflammation in the
intestinal wall. In addition, there are other medications approved
by the FDA-but not specifically to treat IBD-that may be effective
in treating the disease.16
o IBD patients who have had an ostomy operation need to use
specific supplies for their ostomy care. An ostomy surgery creates
an opening in the abdomen. This opening, called a stoma, permits
digested food to exit the body. In most cases, this type of
surgery results in a permanent opening.17 Subsequent to the
operation, ostomy patients need certain supplies to manage the
abdominal opening and the waste. For example, the patient wears a
pouch over the opening to collect the waste and then empties the
pouch as needed. Other necessary supplies include skin barriers to
protect the skin and irrigation and fluid discharge supplies.
Medicare pays for beneficiaries' medically necessary health care
needs as long as they fit into one of the broadly-defined
categories of benefits established in the Social Security Act.
Among other things, these categories include commonly used medical
services and supplies such as physician visits, inpatient hospital
stays, diagnostic tests, durable medical equipment, and prosthetic
devices. While the act provides for broad coverage of many medical
and health care services, it does not provide an exhaustive list
of all services covered.18 Similarly, the act generally does not
specify which medical devices, surgical procedures, or diagnostic
services the program covers. In addition, the act states that the
program cannot pay for any supplies or services that are not
"reasonable and necessary" for the diagnosis and treatment of an
illness or injury.19 With the Social Security Act serving as the
primary authority for all coverage provisions, CMS has established
coverage policies that specify the procedures, devices, and
services that are covered in the broad benefit categories
established in the act.20 In addition, CMS has established the
criteria used to determine whether these supplies are reasonable
and necessary for a beneficiary's treatment. CMS's national
coverage determinations (NCDs) describe the circumstances for
Medicare coverage for a specific medical service, procedure, or
device and they outline the conditions for coverage.21 CMS
interpretive manuals further define when and under what
circumstances items or services may be covered.
Claims administration contractors are required to follow CMS's
national coverage policies. However, if an NCD does not
specifically exclude or limit coverage for an item or service, or
if the item or service is not mentioned at all in an NCD or CMS
manual, it is up to the contractors to determine whether they will
cover a particular item or service within their geographic area.
This is often done through a local coverage determination
(LCD).22 LCDs specify under what circumstances the item or service
is considered to be reasonable and necessary, in accordance with
the Social Security Act, and are supplemented by additional
instructions from the contractors. LCDs related to durable medical
equipment, prosthetic devices, orthotics, and a number of other
supplies are made by the DMERCs-the four CMS claims administration
contractors that process claims exclusively for these supplies.
The DMERCs are required by CMS to coordinate their coverage
development process with one another and they publish identical
LCDs.23
Medicaid coverage policies vary by state. While all state Medicaid
programs must pay for certain services, such as inpatient and
outpatient hospital services, and early and periodic screening,
diagnostic, and treatment services for individuals under the age
of 21, states have broad discretion in setting up their Medicaid
programs. They may set different eligibility standards, scope of
services, and payments, and can elect to cover a range of optional
populations and benefits.24
Medicare generally covers parenteral and enteral nutrition and
ostomy care in home health and outpatient delivery settings for
beneficiaries who meet certain medical standards. These three IBD
therapies are included in specific benefit categories established
by the Social Security Act-primarily the prosthetic devices
benefit category, and in the case of ostomy care provided in a
home health care delivery setting, the home health benefit
category. Medicare does not cover medically necessary food
products or most drugs approved by the FDA that are used to treat
IBD. However, in January 2006, Medicare will begin to cover
medically necessary drugs when the program's new prescription drug
benefit becomes effective. None of the five therapies we examined
for this report are mandatory services under Medicaid. However,
our survey of Medicaid programs indicates that most of these
programs provided eligible individuals some coverage for all five
therapies. We also found that coverage standards that Medicaid
recipients must meet to receive these therapies varied by state.
Table 1 summarizes the number of states covering each of the five
therapies. (See app. II for specific information on each state
Medicaid program's coverage of these therapies.)
Table 1: State Medicaid Programs That Reported Coverage of Five
IBD Therapies for Adults and Children
Source: GAO survey of state Medicaid programs.
aFor this analysis, we are defining states' coverage of drugs to
treat IBD as states' coverage of at least one of the brand name
drugs or generic equivalent drugs listed in our survey.
Our analysis showed that Medicare and state Medicaid programs will
generally cover parenteral nutrition as follows:
Medicare: Medicare generally covers parenteral nutrition, as CMS
has determined that it falls under the prosthetic devices benefit
category, established in the Social Security Act.25 CMS's coverage
standards for parenteral nutrition therapy are outlined in both an
NCD and in local coverage policy.26 Coverage is provided in both
home health and outpatient delivery settings. The NCD requires the
patient to have a severe pathology of the alimentary tract27 that
does not allow absorption of sufficient nutrients to maintain
weight and strength commensurate with the patient's general
condition. A period of hospitalization is required to initiate
coverage for parenteral nutrition and to train the patient in how
to prepare, manage, and administer the formula and equipment. The
NCD also requires a physician's written order or prescription and
sufficient medical documentation to show that the prosthetic
device coverage requirements are met and that parenteral nutrition
therapy is medically necessary. In addition, before approving
coverage, the carrier must agree that a particular condition
qualifies for parenteral nutrition therapy. Medicare will approve
coverage of parenteral nutrition at periodic intervals of no more
than three months. In addition, Medicare will pay for no more than
one month's supply of nutrients at a time.
Building upon the coverage standards in the NCD, the DMERCs' local
coverage policy on parenteral nutrition provides significantly
more detailed requirements. The policy consists of specific
clinical criteria for showing that parenteral nutrition is
considered reasonable and necessary. Like the NCD, the local
policy specifies that a patient must either have a condition
involving the small intestine that significantly impairs the
absorption of nutrients, or a disease of the stomach or intestine
that impairs the ability of nutrients to be transported through
the gastrointestinal system. The local coverage policy also
requires that the patient's inability to maintain proper weight
and strength necessitates intravenous nutrition, and that the
patient is unable to be treated through either diet modification
or with drugs.28 It also describes specific clinical conditions
that meet these criteria. For patients who do not meet the
standards for these clinical conditions, coverage for parenteral
nutrition will be considered on an individual basis if detailed
documentation is submitted. However, some patients with moderate
abnormalities may not be covered unless they have experienced an
unsuccessful trial of enteral nutrition.
Medicaid: Our survey responses indicated that all states provide
some parenteral nutrition coverage for children and all but
one-Georgia-provide such coverage for adults. However, Georgia
reported that it would consider coverage for adults under an
appeal process to its medical director. Our results showed
variation among states in the standards used to determine coverage
for parenteral nutrition. Seven states used all six of the
coverage standards listed in our survey to determine whether
Medicaid would cover parenteral nutrition therapy for adults and
children.29 The remaining 44 states used a variety of the six
coverage standards. For example, Arkansas, California, Kentucky,
North Carolina, and Oregon require individuals to meet three of
the six standards, including pathology and documentation.
Forty-five states indicated that before covering parenteral
nutrition therapy for individuals, they would require some form of
documentation, such as proof of a medical condition. Forty-one of
these same states also required individuals to have a severe
pathology of the gastrointestinal tract that would not allow
absorption of sufficient nutrients to maintain weight and
strength. Only one state-Minnesota-provided coverage for
parenteral nutrition therapy without listing any specific
conditions that individuals must meet to receive therapy. For
details on specific coverage standards for parenteral nutrition
therapy by state, see app. III.
Our analysis showed that Medicare and most state Medicaid programs
will generally cover enteral nutrition as follows:
Medicare: Medicare covers enteral nutrition under the prosthetic
devices benefit category. The NCD coverage standards for enteral
nutrition are very similar to those for parenteral nutrition, with
the primary difference being the requirements involving the
patient's clinical condition. As with parenteral nutrition,
coverage for enteral nutrition is provided in both home health and
outpatient delivery settings. However, for enteral nutrition, the
patient may have a functioning gastrointestinal tract but must be
unable to maintain appropriate weight and strength due to
pathology to, or the nonfunction of, the structures that normally
permit food to reach the digestive tract. The only other differing
requirement in the NCD between the two therapies is that there is
no hospitalization requirement for a patient seeking Medicare
coverage for enteral nutrition. The NCD also requires a
physician's written order or prescription and sufficient medical
documentation to show that the prosthetic device coverage
requirements are met and that enteral nutrition therapy is
medically necessary.
The local coverage policy on enteral nutrition is simpler than the
local policy for parenteral nutrition. It provides coverage for
enteral nutrition so long as adequate nutrition is not possible by
either dietary adjustment or oral supplements. Tube feedings of
enteral nutrition must be required to provide sufficient nutrients
to maintain weight and strength commensurate with the patient's
overall health status due to either one of two conditions: (1) a
permanent non-function or disease of the structures that normally
permit food to reach the small bowel, or (2) a disease of the
small bowel which impairs digestion and absorption of an oral
diet. However, coverage is possible for patients with partial
impairments, such as a Crohn's disease patient who requires
prolonged infusion of enteral nutrients to overcome a problem with
absorption. Enteral nutrition products administered orally are not
covered.
Medicaid: Forty-nine states reported that they provided some
coverage for enteral nutrition therapy for both adults and
children. One state-Oklahoma-indicated that it provided coverage
for children, but not for adults. West Virginia responded that it
did not cover this therapy at all. Analysis of survey results also
indicated that there was some variation in coverage standards used
among the 49 states that covered enteral nutrition therapy for
adults and children. Six states reported that they cover enteral
nutrition therapy for patients who meet all six coverage standards
listed in our survey.30 The remaining states used a variety of the
six coverage standards. For example, Arizona, Colorado, Michigan,
New Mexico, and Wisconsin indicated that they use five of the six
standards-these states did not require the patient to have a
permanent condition in order to be covered for this therapy.
Washington reported that, in addition to subjecting individuals to
most of the criteria listed in our survey, it also requires prior
approval of enteral nutrition therapy based on documentation
showing that the therapy is medically necessary and outlining why
traditional food is not appropriate. We also found that for both
adults and children, 45 of the 49 states that cover enteral
nutrition therapy require individuals to have specific
documentation in their medical records before the states would
render coverage. We also found that 12 states had less restrictive
coverage standards for children. See app. IV for more details on
enteral nutrition therapy and supplies coverage standards for each
state.
Medicare and Medicaid provide at least some coverage of ostomy
care. In outpatient delivery settings, Medicare covers ostomy care
for IBD patients under its benefit category of prosthetic
devices-similar to parenteral and enteral nutrition. In home
health care delivery settings, Medicare covers this therapy as a
home health benefit.31 While there is no NCD for ostomy care, the
four DMERCs have established a local coverage policy for these
supplies. According to the policy, the only Medicare coverage
standard is that the patient must have had an ostomy. Similarly,
all state Medicaid offices, according to our survey responses,
provide coverage of ostomy care for adults and children who have
had ostomies.
Medicare does not cover medically necessary food products because
such supplies are not included in any of the benefit categories
contained in the Social Security Act.32 On the other hand,
according to our survey results, Medicaid provides at least some
coverage of medically necessary food products to its recipients in
46 of the states. Nevada, North Carolina, Ohio, Utah, and West
Virginia were the five states that did not provide any coverage
for medically necessary food products. Of those states reporting
that they provided coverage, 14 also noted that they had a
requirement that the individuals receive a certain percentage of
their nutrition from oral supplements in order for these
supplements to be covered. In some instances, this percentage was
as high as 75 to 100 percent. For example, Florida, Georgia,
Mississippi, Rhode Island, and South Dakota required some
individuals to meet 100 percent of their nutritional requirements
from oral supplements; however these individuals did not have to
meet all of the other conditions listed in our survey. On the
other hand, while North Dakota reported that individuals must
receive at least 51 percent of their nutrition from oral
supplements, it had the most stringent standards overall because
it required that individuals meet all three conditions for
coverage listed in our survey.33 For more information on states'
coverage standards for medically necessary food products, see app.
V.
Medicare does not generally cover medications that are
self-administered, including drugs approved by the FDA to treat
IBD. Coverage is not provided because such self-administered
medications are not included in any of the benefit categories
contained in the Social Security Act.34 However, in 2003, the
Social Security Act was amended, establishing a new voluntary
prescription drug benefit for Medicare beneficiaries that will
become effective in January 2006.35 At that time, Medicare will
begin to cover self-administered drugs approved by the FDA to
treat IBD.36
States generally provide some coverage of drugs approved by the
FDA to treat IBD. Generally, before covering a drug, states
require that: (1) a physician or licensed practitioner writes the
prescription; (2) a licensed pharmacist or licensed authorized
practitioner dispenses the prescription; and (3) the drug is
dispensed on a written prescription that is recorded and
maintained in the pharmacist's or practitioner's records. Our
survey did not ask state Medicaid programs about the standards
used to determine coverage of drugs to treat IBD because state
Medicaid programs are not required to cover prescription drugs.
Our survey also asked state officials whether their Medicaid
programs cover the off-label use of drugs to treat IBD. Responses
to this question varied. Nineteen states responded that they had
no policy for the use of off-label drugs or that their state did
not cover off-label use. Many of these respondents wrote that they
only covered drugs approved by the FDA to treat IBD. Twenty-four
states indicated that they cover off-label drug use. However, 20
of these 24 states responded that they would only cover the drug
under certain conditions. Many of these states reported that
individuals obtaining such prescriptions must receive prior
approval or documentation justifying medical necessity. Michigan
has the most detailed off-label coverage policy of all the states;
it indicated that off-label drugs must receive prior authorization
as well as documentation outlining the (1) diagnosis, (2) medical
reason why the individual cannot use another covered drug; (3)
results of therapeutic alternative medication tried, and (4)
medical literature citations supporting the off-label usage. The
remaining eight states did not respond to this question.
Once coverage standards are met, Medicare generally covers all
medically necessary supplies for the administration of parenteral
and enteral nutrition and ostomy care-the three therapies that
this program covers. On the other hand, our survey of Medicaid
programs showed that although most states provide eligible
individuals at least some coverage of each of the five therapies
addressed in this report, the specific supplies that states will
pay for vary and may be subject to restrictions. According to our
survey results, most states will cover necessary supplies related
to parenteral and enteral nutrition with only slight variations
for the specific supplies supplied. We also found that, while all
states provided some coverage of ostomy care, the specific
supplies that states cover varied. Our survey also showed that,
while most states will cover at least one of the five medically
necessary food products listed in our survey, no state covers all
of them for both adults and children. Finally, we found that most
Medicaid programs generally covered many of the brand name drugs
and equivalent generic drugs listed in our survey.
Medicare will generally cover parenteral nutrition therapy
supplies, such as nutrients and administration supplies, for
beneficiaries who have met applicable coverage standards.
Specifically, according to the applicable local coverage policy,
Medicare will cover necessary parenteral nutrition solutions. In
addition, when coverage requirements for parenteral nutrition are
met, Medicare will also pay for one supply kit and one
administration kit for each day that parenteral nutrition is
administered, if such kits are medically necessary and used.
Medicare will also cover infusion pumps-only one pump will be
covered at any one time.
The local coverage policy also outlines several documentation
requirements for ensuring that the patient's medical
records-including test reports and records from the physician's
office, home health agency, hospital, nursing home, and other
health care professionals-establish the medical necessity for the
care provided. These records must be made available to the DMERC
upon request. In addition, an order for each item billed and a
certificate of medical necessity37 must be signed and dated by the
treating physician, kept on file by the supplier, and be made
available to the DMERC. Besides the initial certification, there
are also documentation requirements if recertifications or revised
certifications are necessary.38
States' Medicaid coverage of the five most commonly used
parenteral nutrition therapy supplies shows some variation,
depending on the item and the delivery setting. As table 2 shows,
parenteral nutrition therapy supplies-such as the infusion
pump-are covered by more states than the parenteral nutrition
solution. In addition, more states reported that they cover
parenteral nutrition therapy supplies in outpatient delivery
settings than in home health delivery settings. There was little
difference in the coverage of various supplies between adults and
children.
Table 2: State Medicaid Programs That Reported Payment of Common
Parenteral Nutrition Therapy Supplies for Adults and Children in
Home Health and Outpatient Delivery Settings
Source: GAO survey of state Medicaid programs.
Further analysis of survey results revealed that 28 states covered
all supplies in both home health and outpatient delivery settings
for adults and children. For more specific information on the
parenteral nutrition supplies covered by each state, see app. VI.
Medicare will generally cover supplies associated with enteral
nutrition therapy for beneficiaries who meet coverage standards.
According to the enteral nutrition local coverage policy, Medicare
will cover all enteral formulas for covered beneficiaries.39 In
addition, Medicare will also cover medically necessary equipment
and supplies for this therapy, such as feeding supply kits and
pumps that are associated with the specific method of
administration used by the patient. However, a few limitations
apply. For example, claims for more than one type of kit delivered
on the same date will be denied as not medically necessary.
Similarly, Medicare will rarely consider the use of more than
three nasogastric tubes or one gastrostomy tube over a 3-month
period as medically necessary.
The local coverage policy also outlines several documentation
requirements for coverage of enteral nutrition supplies. Similar
to the parenteral nutrition local policy, the enteral nutrition
policy requires that the patient's medical record reflect the need
for the care provided. It also has requirements associated with
the certification of enteral nutrition. For example, if the
physician orders enteral nutrition supplies for a longer period of
time than is indicated on the original certificate of medical
necessity, the enteral nutrition policy will require
recertification. However, the enteral nutrition policy generally
has fewer documentation requirements than that of parenteral
nutrition.
Based on our survey, state Medicaid programs' payment for seven of
the most commonly used enteral nutrition therapy supplies varies
depending on the type of product, delivery setting, and whether
the patient is an adult or a child. Table 3 shows that states
reported that their Medicaid programs pay for enteral feeding
supply kits and tubing more than other therapy supplies. In
addition, more states pay for enteral supplies for children than
adults and more states pay for supplies in outpatient delivery
settings than in home health delivery settings.
Table 3: State Medicaid Programs That Reported Payment for Common
Enteral Nutrition Therapy Supplies for Adults and Children in Home
Health and Outpatient Delivery Settings
Source: GAO survey of state Medicaid programs.
Further analysis revealed that 15 states pay for all seven
supplies listed in our survey in both home health and outpatient
delivery settings for adults and children. Thirty states pay for
five or more enteral nutrition supplies for adults and children in
these same settings. We also found that additives for enteral
formula, such as fiber, are the least covered product, with only
21 states covering it in both home health and outpatient delivery
settings for adults and children. For specific results of enteral
nutrition supplies provided by each state, see app. VII.
Medicare covers all of the types of ostomy supplies used by IBD
patients who require ostomy care. However, there are two
restrictions regarding the types of ostomy supplies covered.
First, Medicare will only provide a beneficiary with one type of
liquid skin barrier40 if one is needed-either a liquid or spray
barrier, or individual wipes. Second, Medicare will only pay for
one type of drainage supply-a stoma cap, a stoma plug, or gauze
pads-on a given day. These restrictions are imposed by the DMERCs
in a local coverage policy, which also specifies the "usual
maximum quantity" of supplies that typically meet the needs of
ostomy patients for a specific time period (generally for either 1
or 6 months) for each of the most commonly used ostomy supplies.41
However, according to the four DMERC medical directors, these
quantities only serve as guidelines. Because the need for ostomy
supplies can vary substantially among patients,42 DMERCs may cover
supplies that exceed the usual maximum quantities if the need is
justified.
Medicare's coverage of ostomy supplies is different for IBD
patients who receive care under a home health plan of care than
for those who receive it in an outpatient delivery setting.43 If
an IBD patient is being served by a home health agency and is
under a home health plan of care, all of the patient's medical
supplies, including ostomy supplies, are considered part of the
Medicare home health services benefit. This is generally the case
even when the IBD is a pre-existing condition unrelated to the
immediate reason for home health care, such as hip replacement
surgery.44 Medicare pays a fixed amount determined under a
prospective payment system to the home health agency for the cost
of all covered home health visits, including ostomy supplies
delivered during these visits.45 The home health agency is
obligated to provide the beneficiary with the necessary ostomy
supplies, which are bundled with all other necessary home health
services. The home health agency selects the type of ostomy
products to be used and if the patient wishes to use different
products, the patient must do so at his or her own expense. This
practice can be contrasted to the outpatient delivery setting,
where the products are generally selected by the patient, or the
patient's doctor.46
All states responded that their Medicaid programs pay for ostomy
supplies for adults and children who have had ostomies; however
the range of supplies covered varied. Because of the relatively
large number of supplies commonly used by ostomy patients we
grouped these supplies in nine categories, based on input from a
representative of the United Ostomy Association. Table 4 shows the
median percent of states covering ostomy supplies in home health
and outpatient delivery settings, after they have been placed in
these categories. For example, for the 14 supplies in the
drainable pouch with standard barrier supplies category-half of
supplies are covered by at least 84 percent of states in home
health delivery settings and 85 percent of states in outpatient
delivery settings. In general, states' coverage of ostomy supplies
was greater in outpatient, than in home health delivery settings.
For more details on the individual ostomy supplies included in
each category and the percent of states covering each supply, see
app. VIII.
Table 4: Median Percent of State Medicaid Programs That Reported
Covering Ostomy Supplies in Home Health and Outpatient Delivery
Settings
Source: GAO survey of state Medicaid programs.
Note: Individual supplies under each category appear in app. VIII.
Twenty-four states reported covering all of the ostomy supplies
listed in our survey in both delivery settings. Nine of the 24
states that covered all supplies imposed no supply limits or
dollar caps on individuals. The remaining 15 states reported that
they had supply limits or dollar caps; however five of these
states-Arizona, Hawaii, North Dakota, Rhode Island, and
Virginia-added that they often allowed individuals to exceed these
limits and caps for certain supplies. For example, one state
reported that while it has a supply limit of one box of 50 skin
barrier wipes and dollar cap of $9.36 per month, it will often
allow individuals to exceed limits and caps. See app. IX for more
details on individual states' coverage of supplies, including
supply limits and dollar caps, in both home health and outpatient
delivery settings.
Unlike Medicare, which does not pay for any medically necessary
food products, most state Medicaid programs pay for some products.
These products include prescription strength vitamins, oral
nutritional formulas, food thickeners, baby foods, blended grocery
products, and other supplies. According to our survey, 46 states
reported covering at least one of the five products listed in our
survey for either adults or children.
As table 5 shows, out of the five food products, state Medicaid
programs reported paying for oral nutritional formulas most often.
Baby food and other blenderized products were the least common
products covered with only four states-Missouri, New Jersey,
Tennessee, and Texas-reporting that they paid for these products.
In addition, more states paid for medically necessary food
products for children than for adults.
Table 5: Number of State Medicaid Programs Covering Medically
Necessary Food Products for Adults and Children
Source: GAO survey of state Medicaid programs.
For more details on states' payment of medically necessary food
products, see app. X.
All states reported that their Medicaid programs paid for at least
one of the nine brand name drugs or two of the generic drugs that
were included in our survey and which were approved by the FDA to
treat IBD. Figure 1 shows the number of states covering each drug.
The brand name drug Remicade was the most commonly paid for drug,
with all states reporting payment.47 The generic drugs available
for Azulfidine and Rowasa were covered by 48 and 46 states
respectively.
14Specific supplies included in the parenteral supply kits and
administration kits can vary, depending on the supplier.
15Specific supplies included in the enteral feeding supply kits can vary
depending on specific patient needs.
16The prescribing of a drug for treatments other than those specified on
the label approved by FDA is referred to as off-label use.
17Not all ostomies are permanent. According to one gastrointestinal
expert, about 20 percent of ostomies are temporary. A temporary ostomy is
more common among younger patients, while Medicare patients are more
likely to have permanent ostomies.
18Congress gave the Secretary of Health and Human Services the authority
to decide which specific supplies and services within these categories are
covered by Medicare.
19Specifically, the law states that Medicare cannot pay for any supplies
or services that are not "reasonable and necessary for the diagnosis and
treatment of an illness or injury or to improve functioning of a malformed
body part." 42 U.S.C. S:1395y(a)(1)(A).
20The Secretary of Health and Human Services delegated the legal authority
to specify which procedures, devices, and services are covered in the
Social Security Act's benefit categories to CMS and its contractors.
21NCDs are typically issued as program instruction and are binding on all
Medicare claims administration contractors. NCDs must be made available
for public comment prior to finalization. The law also requires proposed
NCDs to be reviewed by either the Medicare Coverage Advisory Committee or
outside clinical experts. NCDs are also binding on Administrative Law
Judges during the claims appeal process.
22LCDs are considered administrative and educational tools that provide
guidance to the public and medical community within the contractor's
jurisdiction, and assist providers in submitting correct claims for
payment. When developing LCDs, contractors consider medical literature,
the advice of local medical societies and medical consultants, public
comments, and comments from the provider community. LCDs must also be
consistent with all statutes, rulings, regulations, and national coverage,
payment, and coding policies. During the claims appeal process,
administrative law judges may consider LCDs, but they are not bound by
them.
23The Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act
of 2000 (BIPA) defined the term LCD as including only decisions as to
whether items or services are "reasonable and necessary." Pub. L. No.
106-554, app. F, S: 522(a), 114 Stat. 2763A, 2763A-546. Prior to the
passage of BIPA, the DMERCs had issued documents called Local Medical
Review Policies (LMRPs) to indicate all coverage information for
parenteral and enteral nutrition and ostomy supplies, including a
determination of whether items and services are reasonable and necessary.
CMS has required the DMERCs to convert existing LMRPs to LCDs. According
to CMS guidance, these new LCDs should contain only determinations on
reasonableness and necessity, and other instructions from the DMERCs, such
as coding guidelines, are issued in other publications called policy
articles. As of September 2005, the DMERCs had issued LCDs and related
policy articles for enteral nutrition and ostomy supplies, but not for
parenteral nutrition. Throughout the report, we use the term local
coverage policy to describe all DMERC decisions and instructions,
regardless of whether they are found in an LMRP, LCD, or policy article.
24Optional supplies and services include, among others, prescribed drugs,
prosthetic devices, home health care services, dental services, and
physical therapy.
Coverage of IBD Therapies Is Subject to Medicare and Medicaid Standards
Medically
Parenteral Enteral Ostomy necessary food
nutrition nutrition care products Drugsa
Adults and children 50 49 51 40 50
Adults only 0 0 0 0 1
Children only 1 1 0 6 0
Not covered for adults
or children 0 1 0 5 0
Total 51 51 51 51 51
Medicare and Medicaid Coverage Standards for Parenteral Nutrition
25Covered prosthetic devices are "devices (other than dental) which
replace all or part of an internal body organ (including colostomy bags
and supplies directly related to colostomy care), including replacement of
such devices." 42 U.S.C. S: 1395x(s)(8).
26Per CMS requirements, DMERCs have to establish identical coverage
policies; therefore, their policies are worded the same. For
simplification purposes, we will refer to these policies as a single
policy throughout the rest of the report.
27The alimentary tract consists of the passage that extends from the mouth
to the anus and is responsible for the movement of food through the body
and its digestion and absorption.
28The local coverage policy considers a total caloric daily intake
(through parenteral, enteral and oral nutrition) of 20-35 calories per
kilogram per day sufficient to achieve or maintain appropriate body
weight.
29For purposes of this survey, we used Medicare's coverage standards for
parenteral nutrition therapy as a basis for developing questions about the
state Medicaid programs' coverage standards. The primary Medicare coverage
standards for parenteral nutrition therapy that we identified are as
follows: (1) Patient has to have a severe pathology of the
gastrointestinal tract that does not allow absorption of sufficient
nutrients to maintain weight and strength; (2) Patient has to have a
permanent impairment of the gastrointestinal tract, i.e., lasting at least
3 months; (3) The patient's maintenance of weight and strength needs to be
through intravenous nutrition only; (4) Other therapies-such as enteral
nutrition and medication-need to have failed in order for the state to
cover parenteral nutrition; (5) Patient must have a specific clinical
condition to qualify for coverage of parenteral nutrition; and (6)
Specific documentation-such as proof of medical condition, duration of
gastrointestinal impairment, or list of medications used-has to be
indicated in the patient's medical record.
Medicare and Medicaid Coverage Standards for Enteral Nutrition
Medicare and Medicaid Coverage Standards for Ostomy Care
30For purposes of this survey, we used Medicare's five coverage standards
for enteral nutrition therapy as a basis for developing questions about
the state Medicaid programs' coverage standards. The primary Medicare
coverage standards for enteral nutrition therapy that we identified are as
follows: (1) Patient has to have a pathology or non-function of the
structures that normally permit food to reach the small bowel (e.g.,
inability to swallow), which impairs the ability to maintain weight and
strength; (2) The impairment has to be considered a permanent condition,
(i.e., lasting at least 3 months); (3) Patient's condition must
necessitate tube feedings to provide sufficient nutrients to maintain
weight and strength (i.e., patient must be unable to obtain adequate
nutrition through dietary adjustment and/or oral supplements); (4) Enteral
nutrition for patients with partial impairments (e.g., Crohn's disease
patient who requires prolonged infusion of enteral nutrients to overcome
an absorption problem) is possible; and (5) Specific documentation has to
be provided in the patient's medical record. In addition, although
Medicare does not cover enteral nutrition products that are administered
orally, we asked states whether they have established a sixth standard by
covering such products and related supplies.
Medicare and Medicaid Coverage Standards for Medically Necessary Food Products
31Under the home health benefit, Medicare pays for services provided to
homebound beneficiaries by a home health agency under the care of a
physician. Covered items and services under this benefit include physical
therapy, medical supplies, and durable medical equipment as long as they
are medically necessary.
32In addition, the NCD for parenteral and enteral nutrition specifically
excludes "nutritional supplementation" from coverage.
33For purposes of this survey, states were asked to respond to three
coverage standards as summarized from discussions with health experts and
our review of relevant literature as follows: (1) medically necessary food
products are covered if they are an essential source of nutrition; (2)
medically necessary food products are covered only for specific
conditions; and (3) medically necessary food products are covered only
during the period following hospitalization.
Medicare and Medicaid Coverage Standards for Drugs to Treat IBD
34Specifically, outpatient drugs and biologicals are covered when they are
furnished incident to a physician's professional service, provided that
they are not usually self-administered by the patient. See 42 U.S.C. S:
1395x(s)(2)(A). Therefore, medications used to treat IBD therapy that are
self-administered are not covered by Medicare, but those administered by a
physician in a clinical setting may be covered as long as they are "not
usually self-administered." CMS has published a general policy for
determining whether a drug meets these statutory requirements, but the
ultimate decision on a particular drug is made by each Medicare claims
administration contractor. Of the drugs and biologicals used to treat IBD,
only one would likely be considered "not usually self-administered" under
CMS guidelines-Remicade-because it is given intravenously. We did not
survey the Medicare claims administration contractors to determine whether
each has issued coverage policies on Remicade.
35Medicare Prescription Drug, Improvement, and Modernization, Act, Pub. L.
No. 108-173, S: 101, 117 Stat. 2066, 2071-2152 (codified at 42 U.S.C. S:S:
1395w-101 to 1395w-152).
36Under the new prescription drug benefit, private plans will contract
with Medicare to provide drug coverage for Medicare beneficiaries. In
general, outpatient prescription drugs will be covered if the drug is
either (1) on the specific plan's formulary, or (2) determined to be
medically necessary. The medically necessary determination is made through
Medicare's exception/appeals process, which requires the plan to cover any
drug that is considered medically necessary for the beneficiary even if it
is not on the plan's formulary. CMS has also indicated that the drug plans
may cover off-label uses of drugs, if they are prescribed for medically
accepted indications; but they are not required to do so.
Variation in Medicare and Medicaid Programs' Coverage of Specific Supplies
Related to IBD Therapies
Parenteral Nutrition Supplies Covered by Medicare and Medicaid
37A certificate of medical necessity is required for Medicare
reimbursement for 14 types of durable medical equipment and supplies. This
form, which should be personally signed by the treating physician or
midlevel practitioner-i.e., a nurse practitioner or physician assistant
trained to provide medical assistance that otherwise might be performed by
a physician-to attest to the accuracy of the information contained on the
form, documents medical necessity.
38Based on the clinical condition involved, there may also be other
documentation requirements for parenteral nutrition therapy, such as
evidence of malnutrition, a failed tube feeding trial, attempts to feed
orally or enterally, and caloric intake and output. It may also be
necessary to provide reports of small bowel motility studies, a list of
medications used to treat certain conditions, and laboratory data such as
a fecal fat test documenting malabsorption.
Adults Children
Home Home
Supplies health Outpatient health Outpatient
Parenteral nutrition
solution 34 42 35 44
Parenteral nutrition
supply kit 35 43 36 44
Parenteral nutrition
administration kit 36 45 37 46
Parenteral nutrition
infusion pump 40 46 40 47
Intravenous pole 39 43 40 45
Enteral Nutrition Supplies Covered by Medicare and Medicaid
39For special formulas, the medical necessity will need to be justified
for each patient. Otherwise, Medicare payment will be based on the
allowance for the least costly medically appropriate alternative.
Adults Children
Home
Supplies Home health Outpatient health Outpatient
Enteral formula 35 42 37 44
Enteral feeding supply
kit 40 45 43 46
Tubing 41 43 42 46
Additive for enteral
formula 22 28 24 30
Enteral nutrition
infusion pump 38 40 40 42
Intravenous pole 38 40 40 42
Percutaneous
catheter/tube 30 33 31 38
Ostomy Supplies Covered by Medicare and Medicaid
40Skin barriers are used to protect the skin around the stoma and to
increase overall wear time.
41DMERCs have established usual maximum quantities of supplies for those
ostomy supplies that are most commonly used because more claims data exist
on these supplies and because there is a greater risk of overutilization.
42The quantity and type of supplies needed by a patient is determined to a
great extent by the type of ostomy, its location, its construction, and
the condition of the skin surface surrounding the stoma. There will be
variation according to individual patient need as well individual needs
over time.
43A United Ostomy Association survey of Medicare beneficiaries conducted
in late 2004 showed that 45 percent of the respondents had received some
kind of home health care during a recent 3-year period.
44According to the United Ostomy Association, almost two-thirds of the
individuals who have ostomies and are receiving home care services, are
receiving these services for reasons unrelated to their ostomy.
45The Balanced Budget Act of 1997 mandated the implementation of the
prospective payment system for home health agencies. Pub. L. No. 105-33,
S: 4603(a), 111 Stat. 251, 467-72. Under this system, home health agencies
receive a single payment, adjusted to reflect the care needs of the
patient, for delivering up to 60 days of care, called a home health
episode. This episode payment is based on the historical national average
cost of providing care, not on a home health agency's actual costs of
treating any given patient. The episode payment is intended to cover the
average costs of all home health visits and medical supplies provided
during the episode.
46We previously reported that, although Medicare's home health payment
includes the average costs of nonroutine medical supplies, including
ostomy supplies, this payment may not reflect variation in supply costs
across types of patients. Home health agencies may be paid the same amount
for treating patients with quite different supply costs. Patients who
require costly supplies may have problems accessing home health care, may
have to switch supplies, or have a limited number of supplies provided to
them during their period of home care. In addition, the agencies that
treat them may be financially disadvantaged. See GAO: Medicare Home Health
Payment: Nonroutine Medical Supply Data Needed to Assess Payment
Adjustments, GAO-03-878 (Washington, D.C., August 15, 2003.)
Median percent of
states that cover Median percent of
supplies in each states that cover
category in home supplies in each
Ostomy categories health delivery category in outpatient
(number of supplies) settings delivery settings
Drainable pouch with
extended wear barrier
supplies (2 supplies) 84 88
Drainable pouch with
standard barrier
supplies (14 supplies) 84 85
Irrigation supplies (6
supplies) 82 84
Fluid discharge
management item (1
item) 75 75
Adhering pouch barrier
supplies (2 supplies) 85 90
Extended wear barrier
supplies (5 supplies) 84 86
Barrier-skin
protection supplies
(13 supplies) 86 88
Closed pouch supplies
(11 supplies) 84 88
Other accessories (15
supplies) 80 82
Medically Necessary Food Products Covered by Medicaid
Baby food and
Prescription Oral other
strength nutritional Food blenderized Other
vitamins formulas thickeners products products
Adults
and
children 29 36 28 2 12
Children
only 6 7 5 2 5
Neither
adults
nor
children 16 8 18 47 34
Total 51 51 51 51 51
Drugs Covered by Medicaid to Treat IBD
Figure 1: Number of State Medicaid Programs That Reported Covering Drugs
Listed in Our Survey to Treat IBD
47Forty-eight survey respondents reported that their states would cover
the brand name drug Remicade. One state-Ohio-wrote that it would cover the
drug with prior authorization. The remaining two states-California and
Iowa-indicated that they would not cover the drug without prior
authorization. Based on these responses, we concluded that all states
would cover the drug.
Further analysis revealed that six states-Colorado, Minnesota, Montana,
Nevada, Oklahoma, and Wisconsin-reported that individuals must use generic
drugs if they are available, before obtaining the equivalent, but more
expensive brand name drugs. Three states-California, Iowa, and
Ohio-indicated that they would not cover the brand name drug Remicade
without prior authorizations. See app. XI for a listing of each state's
coverage of drugs listed in our survey to treat IBD for adults and
children.
Agency Comments
We provided a draft of this report to CMS. In its written comments, CMS
said that it determined that we correctly described the Medicare coverage
policies for parenteral and enteral nutrition and ostomy supplies.
However, CMS suggested that we clarify our description of Medicare's
coverage policy for prescription drugs that are not self-administered. We
revised our language to address this concern. It also said that, as it
proceeds with policy development, it will continue to give consideration
to access issues that affect Medicare beneficiaries and Medicaid
recipients in their treatment of IBD. We have reprinted CMS's letter in
app. XII.
We also provided FDA with excerpts of the draft concerning drugs it has
approved to treat Crohn's disease and ulcerative colitis. FDA responded by
e-mail and provided a list that contained several additional drugs it said
it considered as valid, labeled, treatments for IBD. FDA's revised list
was provided after our survey was administered and these drugs are not
discussed in this report. We modified our report to note this.
We are sending copies of this report to the Secretary of Health and Human
Services, the Administrator of CMS, the Commissioner of FDA, and other
interested parties. In addition, this report will be available at no
charge on GAO's Web site at http://www.gao.gov. We will also make copies
available to others upon request.
If you or your staffs have any questions about this report, please contact
me at (312) 220-7600 or [email protected]. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this report. Key contributors to this report are listed in app.
XIII.
Leslie G. Aronovitz Director, Health Care
Appendix I: S Appendix I: Scope and Methodology
In this report, we (1) identify the Medicare and Medicaid coverage
standards for five therapies-parenteral nutrition, enteral nutrition
formula, ostomy care, medically necessary food products, and drugs
approved by the Food and Drug Administration (FDA) for inflammatory bowel
disease (IBD); and (2) determine what specific supplies used in these
therapies Medicare and state Medicaid programs pay for in home health and
outpatient delivery settings. In examining Medicare and Medicaid coverage
of these therapies and the related supplies, we considered whether each
program would cover these items in both home health and outpatient
settings. For purposes of this study, we defined these settings as
follows:
o Home health care refers to the situation in which a medical
supply is being provided to the individual by a home health aide
or others through an arrangement made by a home health agency, in
accordance with a plan for furnishing the supply that a physician
has established and periodically reviews. The supply is provided
through visits made to an individual's residence.
o Outpatient care refers to any situation in which a patient
receives a medical supply but does not require an overnight
hospital stay. This includes a situation in which the supply is
provided to the individual during a visit with a physician in an
office or hospital. It may include a situation in which the
individual obtains and self-administers the supply outside of the
office or hospital setting, without the assistance of a home
health aide or a home health agency.
To identify Medicare's coverage standards for parenteral and
enteral nutrition, ostomy care, medically necessary food products,
and drugs approved by the FDA for the treatment of IBD in home
health and outpatient delivery settings, we reviewed the standards
established by the Centers for Medicare & Medicaid Services (CMS)
in its national coverage policies. Specifically, we examined CMS's
database of national coverage determinations (NCD) as well as its
interpretive manuals, which address coverage policies. We also
reviewed local coverage policies established by CMS's four Durable
Medical Equipment Regional Carriers (DMERC). In addition, we
reviewed relevant Medicare laws and regulations. To clarify our
understanding of these materials, we interviewed CMS officials and
the medical directors of the four DMERCs. We also reviewed
relevant laws, and other CMS and DMERC documentation to determine
if the program covers these therapies in both the home health and
outpatient delivery settings.
To identify the Medicaid program's coverage standards in each
state for the five therapies addressed by our study in home health
and outpatient delivery settings, we sent a survey to Medicaid
offices in the 50 states and the District of Columbia. The survey
addressed each state's coverage policies and medical criteria that
an individual must meet to receive each of the five therapies as a
Medicaid benefit. Specifically, we asked states to indicate
whether their program provides coverage of each of the five
therapies and the criteria and conditions they have established,
if applicable. In general, we used Medicare's coverage policies as
a basis for the survey's coverage questions, and we provided
states the opportunity to describe how their policies varied from
Medicare's policies. We also provided states with the option of
describing other pertinent criteria they may have established. The
survey asked them to indicate whether they had different coverage
policies for adults and children for such therapies. Because
Medicare does not cover medically necessary food products and
self-administered prescription medications, we formulated our
survey questions on applicable coverage standards for these two
items based on discussions with medical experts and organizations
that represent IBD patients, and our review of pertinent
literature. Regarding drugs used to treat IBD, we consulted with
the FDA, which provided us with a list of nine brand name drugs
and two generic drugs that it had approved to treat Crohn's
disease and ulcerative colitis. We included these drugs in our
survey.1
We pretested our survey with Medicaid officials in the District of
Columbia, Georgia, and Virginia. We selected the District of
Columbia and Georgia because of the contrasting sizes of these two
Medicaid programs. We selected Virginia to obtain additional input
on the structure of our questions related to prescription drug
coverage. We received responses from all of the states and
reviewed these data for obvious inconsistency errors and
completeness. For responses that were unclear or incomplete, we
contacted survey respondents to obtain clarification before
conducting our analyses. We did not verify all the information we
received in the survey. When necessary, we compared our electronic
data files of survey responses with the actual surveys we obtained
from states. We also did several internal verification checks to
ensure accuracy. Based on these efforts, we determined that the
data were sufficiently reliable for the purposes of this report.
To improve our understanding of how Medicare's and Medicaid's
coverage standards apply to the five therapies, we also reviewed
pertinent literature, interviewed two physicians who are regarded
as experts in the field of gastrointestinal diseases, and convened
a panel consisting of representatives of organizations that study
or serve the needs of IBD patients. The following organizations
participated in this panel:
o American Society for Parenteral and Enteral Nutrition
o American Gastroenterological Association
o Coram Healthcare (provider of home infusion services)
o Crohn's Disease and Colitis Foundation of America
o Digestive Disease National Coalition
o North American Society for Pediatric Gastroenterology,
Hepatology, and Nutrition
o The Oley Foundation for Home Parenteral and Enteral Nutrition
o United Ostomy Association2
To identify the specific supplies used in the covered therapies
that Medicare will pay for, we reviewed relevant NCDs, local
coverage policies, and CMS interpretive manuals. We interviewed
CMS officials and the four DMERC directors about the supplies that
Medicare will pay for, and any applicable limitations or
restrictions. To improve our understanding of the various supplies
used in each therapy, we obtained information from the two medical
experts and representatives of organizations that participated in
our panel.
To determine the specific supplies that state Medicaid programs
will pay for, we provided in our survey a list of commonly used
supplies for each of the five therapies. To determine the supplies
that are most commonly used in the five therapies, we interviewed
the directors of the four DMERCs, representatives of some of the
organizations that participated in our panel, and the two medical
experts, and reviewed relevant literature. States were asked to
report whether or not the specific supplies listed were covered
for adults and children, and whether their Medicaid program would
cover these supplies in both home health and outpatient delivery
settings. In the case of parenteral and enteral nutrition, and
ostomy supplies, we listed items by name and included their
identifying codes as specified in the Health Care Common Procedure
Coding System (HCPCS).3 Because there is no standard definition of
what constitutes medically necessary food products, we developed a
list of items that members of our panel and the physicians we
spoke to generally considered commonly used. To determine whether
states covered medications to treat IBD, we asked states to
indicate whether they paid for the nine brand name drugs and two
generic drugs listed in our survey. With the exception of drugs,
we asked states to indicate whether they had established any
restrictions, including supply limits and monetary caps, on the
provision of covered products. We conducted our work from December
2004 through November 2005, in accordance with generally accepted
government auditing standards.
aFor purposes of this analysis, we are defining coverage as any
state that covers at least one of the brand name drugs or generic
equivalent drugs listed in our survey for adults or children.
bOnly total parenteral nutrition is covered.
aPatient has to have a severe pathology of the gastrointestinal
tract that does not allow absorption of sufficient nutrients to
maintain weight and strength.
bPatient has to have a permanent impairment of the
gastrointestinal tract, i.e., lasting at least 3 months.
cThe patient's maintenance of weight and strength needs to be
through intravenous nutrition only.
dOther therapies-such as enteral nutrition and medication-need to
have failed in order for the state to cover parenteral nutrition.
ePatient must have a specific clinical condition in order to
qualify for coverage of parenteral nutrition.
fSpecific documentation-such as proof of medical condition,
duration of gastrointestinal impairment, and list of medications
used-has to be provided in the patients' medical record.
gFor acute care adults receiving total parenteral nutrition,
parenteral nutrition therapy must be the sole source of nutrition.
hOnly total parenteral nutrition is covered. Individuals must
document the reason enteral feeding cannot be given.
iThe coverage standards related to partial impairment and clinical
conditions are not mandatory. A state official reported that the
state generally tries to follow these standards.
jThe coverage standards related to pathology and clinical
conditions are only applicable in home health delivery settings.
kThe recipient must require total parenteral nutrition to sustain
life. Adequate nutrition must not be possible by dietary
adjustment, oral supplements, or tube enteral nutrition.
lParenteral nutrition therapy must be the primary source of
nutrition.
aPatient has to have a severe pathology or non-function of the
structures that normally permit food to reach the small bowel
(e.g., inability to swallow), which impairs the ability to
maintain weight and strength.
bThe impairment has to be considered a permanent condition, i.e.,
lasting at least 3 months.
cThe patient's condition must necessitate tube feedings to provide
sufficient nutrients to maintain weight and strength (i.e.,
patient must be unable to obtain adequate nutrition through
dietary adjustment and/or oral supplements).
dEnteral nutrition for patients with partial impairments (e.g.,
Crohn's disease patient who requires prolonged infusion of enteral
nutrients to overcome an absorption problem) is possible.
eThe state covers enteral nutrition products, and related
supplies, that are administered orally.
fSpecific documentation related to enteral nutrition therapy has
to be provided in the patients' medical record.
gFor acute care adult patients, enteral therapy must be the sole
source of nutrition.
hFor adults, enteral nutrition is covered only if it is the sole
source of nutrition.
iFor adults and children, enteral nutrition must provide 51
percent of more of caloric intake.
jFor adults, the tube feeding criterion is only applicable in home
health delivery settings.
kThe state does not require documentation for adults. It did not
respond to this question for children.
lEnteral nutrition therapy must be the primary source of
nutrition. The state may cover oral nutritional products for
children who have had an early and periodic screening, diagnostic,
and treatment screening which results in a diagnosed condition
that impairs absorption of specific nutrients.
mDocumentation must indicate that there is a defined pathologic
process for which nutritional support is therapeutic.
nThe state only covers this therapy for children.
oTube feeding coverage standard is to sustain life rather than to
maintain weight and strength.
aMedically necessary food products must be an essential source of
nutrition.
bMedically necessary food products are covered only for specific
conditions.
cMedically necessary food products are covered only during the
period following hospitalization.
dFor acute care adult patients, medically necessary food products
must be the sole source of nutrition.
eThe state covers medically necessary food products for certain
inherited metabolic diseases.
fThe state covers medically necessary food products if products
are necessary to provide sufficient nutrients to maintain weight
and strength commensurate with patient's overall health status.
gTo receive coverage, a patient must have a defined and specific
pathologic condition for which nutritional support is therapeutic.
If the purpose is simply to provide food, then it is not
considered medically necessary.
hNutritional therapy must be the sole source of nutrition.
aParenteral nutrition solution includes all types of solutions.
bParenteral nutrition supply kit which can be premixed or mixed at
home.
c Parenteral nutrition infusion pump can be portable or
stationary.
dSupplies are covered only when administered at home. They are not
covered in other outpatient delivery settings.
aEnteral formula includes all types.
bEnteral feeding supply kit includes the syringe, pump, and
gravity fed.
cTubing includes all types including nasogastric, stomach, and
gastrostomy.
dAdditives for enteral formula.
eEnteral nutrition includes infusion pump with or without an
alarm.
fCatheter includes percutaneous catheter, tube anchoring device
and adhesive skin attachment.
gState's coverage is limited to home health delivery settings.
hThe state does not cover enteral nutrition infusion pump -
without alarm.
iThe state does not cover blenderized enteral formulas.
jFor adults, the state handles coverage for enteral supplies on a
case-by-case basis.
kThe state only covers specific enteral nutrition supplies.
Nasogastric tubings with and without stylets along with stomach
tubes are only covered for children.
lPediatric enteral formula and blenderized enteral formula are
only covered for children under the age of 21.
mThe state does not cover all enteral formulas.
Source: GAO survey of state Medicaid programs.
aOstomy supplies were placed in related categories based on
discussions with an official from the United Ostomy Association.
Source: GAO survey of state Medicaid programs.
Note: Responses for percent of monetary caps or supply limits may
exceed 100 percent due to rounding.
aSupplies are only covered if they are used at home. Dollar caps
and supply limits only apply to adults.
bThe state has supply limits and dollar caps that can never be
exceeded for certain supplies; however some of the limits and caps
are very high. For example, for one item that can never be
exceeded-the ostomy belt with peristomal hernia support-the state
reported that it will pay for up to 999 belts and $38,571.39 per
month.
cThere are no supply limits or dollar caps for home health ostomy
supplies.
dSupply limits or dollar caps are only for home health.
eOnce the accumulated dollar value of all products reaches $300 or
more in a year, the state looks at the usage patterns and other
information. The state reported that IBD patients often reach or
exceed the $300 limit but it often allows individuals to exceed
the amount with written justification.
aFor prescription strength vitamins, the state covers prenatal
vitamins for pregnant women only. Prescription fluoride vitamins
are covered for children up to eight years of age.
bThe state only covers prenatal vitamins. Food thickeners are
covered for any condition, as long as they are medically
necessary.
cFor prescription strength vitamins, the state limits coverage to
prenatal vitamins, folic acid, pediatric vitamins with fluoride
for children less than 13 years of age, multivitamins for dialysis
patients, and iron supplements.
dThe state covers special metabolic formulas for oral
administration for children under medically necessary food
products.
eFor prescription strength vitamins, multivitamins can be covered
but they must have prior authorization and meet the state's
criteria for medically necessary.
fCoverage for prescription strength vitamins is based on
documented vitamin deficiencies in the patient's medical record.
Nutritional formulas taken orally must have prior authorization.
gCMS standard exemptions related to legend vitamins are covered.
Pediatric vitamin supplements with fluoride are covered. Other
pediatric legend vitamins may be covered with statement of medical
necessity.
hThe state requires a defined/specific pathologic condition for
which nutritional support is therapeutic. If the purpose of the
supply is simply to provide food, then it is not considered
medically necessary.
iThe state covers general nutritional supplements. Other disease
specific products are not covered.
jFor prescription strength vitamins, the state limits coverage for
children less than two years of age or for prenatal use.
kFor prescription strength vitamins, the state covers prenatal
vitamins for women.
lThe state does not cover nutritional shakes and vitamins.
aThe state requires patients to use a generic equivalent drug, if
available.
bThe state covers brand name drugs only after documentation of
medical necessity is complete. The documentation has to include a
summary of benefit versus risk.
cThe state will cover brand name drugs with prior authorization
when there are generic equivalent drugs available.
dThe state does not cover Remicade, Colozal, and Entocort for
children age 11 or under.
eThe state requires prior authorization for Remicade and Asacol.
fThe state did not indicate whether it covered the generic drug
for Azulfidine for children.
gThe state will pay for brand name drugs after demonstrating
failure of generic equivalent drugs.
hThe state will cover brand name drugs with prior authorization
when there are generic equivalent drugs available.
iThe state requires prior authorization for Remicade.
jThe state requires patients to use a generic equivalent drug, if
available.
kThe state may require prior authorization if generic equivalent
drug or therapeutic alternatives exist.
lThe state requires prior authorization for brand name drugs when
there is a generic equivalent drug available.
mThe state will cover brand name drugs with prior authorization
when there are generic equivalent drugs available.
Leslie G. Aronovitz (312) 220-7600 or [email protected]
In addition to the contact named above, Geraldine Redican-Bigott,
Assistant Director; Shaunessye Curry; Adrienne Griffin; Ba Lin;
Janet Rosenblad; and Pauline Seretakis made key contributions to
this report.
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Medicare and Medicaid's Coverage Standards of IBD Therapies
1The nine brand name drugs listed in our survey were Asacol, Azulfidine,
Canasa, Colazal, Dipentum, Entocort, Pentasa, Remicade, and Rowasa. The
survey also listed the generic equivalents of two of these drugs,
Azulfidine and Rowasa. After we administered our survey, the FDA informed
us that it also considers several additional drugs as valid treatments for
IBD. These drugs are not discussed in this report.
Specific Supplies Paid for by Medicare and State Medicaid Programs
2The United Ostomy Association permanently ceased operations on September
30, 2005.
3HCPCS was developed by CMS to standardize coding systems used to process
Medicare claims for medical services and procedures furnished by
physicians and other health care professionals, as well as other medical
products, supplies, and services.
Appendix II: ReProgram CoPatients Appendix II: Reported State Medicaid
Program Coverage of Therapies Used by IBD Patients
Appendix III: Reported ParentTherapy CoMedi Appendix III: Reported
Parenteral Nutrition Therapy Coverage Standards by State Medicaid Program
Appendix IV: RTherapy CoMedi Appendix IV: Reported Enteral Nutrition
Therapy Coverage Standards by State Medicaid Program
Appendix V: Re Food Products Medi Appendix V: Reported Medically
Necessary Food Products Coverage Standards by State Medicaid Program
Appendix VI: RSupplies Coverand O Appendix VI: Reported Parenteral
Nutrition Supplies Covered by Medicaid in Home Health and Outpatient
Delivery Settings
Appendix VII: Supplies Coverand O Appendix VII: Reported Enteral
Nutrition Supplies Covered by Medicaid in Home Health and Outpatient
Delivery Settings
Appendix VIII: Reported Percent of States Covering Ostomy Supplies in Home
Health and Outpatient Delivery Settings Appendix VIII: Reported Percent
of States Covering Ostomy Supplies in Home Health and Outpatient Delivery
Settings
Home health Outpatient delivery
Supplya name delivery setting setting
Drainable pouch with extended wear
barrier
Ostomy pouch, drainable, with
extended wear barrier attached 84 88
Ostomy pouch, drainable, with
extended wear barrier attached, with
built-in convexity 84 88
Drainable pouch - standard barrier
Ostomy pouch, drainable with
faceplate attached, plastic 84 90
Ostomy pouch, drainable with
faceplate attached, rubber 84 90
Ostomy pouch, drainable, for use on
faceplate, plastic 84 90
Ostomy pouch, drainable, for use on
faceplate, rubber 84 86
Ostomy pouch, drainable, with barrier 84 88
Ostomy pouch, drainable, high output,
for use on a barrier with flange (2
piece system), with filter 80 82
Ostomy pouch, closed, for use on
barrier with locking flange, with
filter (2 pieces) 80 84
Ostomy pouch, drainable, with barrier
attached, with filter (1 piece) 80 84
Ostomy pouch, drainable, for use on
barrier with non-locking flange, with
filter (2 pieces) 80 84
Ostomy pouch, drainable, for use on
barrier with locking flange (2
pieces) 80 84
Ostomy pouch, drainable, for use on
barrier with locking flange, with
filter (2 pieces) 78 82
Ostomy pouch, drainable, without
barrier attached (1 piece) 86 84
Ostomy pouch, drainable with barrier
attached (1 piece) 88 88
Ostomy pouch, drainable, for use on
barrier with flange (2 piece system) 90 90
Irrigation supply
Irrigation supply; sleeve 82 86
Ostomy irrigation supply; bag 78 82
Ostomy irrigation supply;
cone/catheter, including brush 80 86
Lubricant 82 84
Continent device, plug for continent
stoma 82 84
Continent device, catheter for
continent stoma 82 84
Fluid discharge management
Bedside drainage bottle 75 75
Barrier with adhering pouch
Ostomy barrier, with flange, with
built-in convexity 84 92
Ostomy skin barrier, with flange,
without built-in convexity, 4x4
inches or smaller 86 88
Barrier - extended wear
Ostomy skin barrier, solid 4x4
inches, extended wear, without
built-in convexity 84 88
Ostomy skin barrier, with flange,
extended wear, with built-in
convexity, 4x4 inches or smaller 88 88
Ostomy skin barrier, with flange,
extended wear with built-in
convexity, larger than 4x4 inches 84 86
Ostomy skin barrier, with flange,
extended wear, without built-in
convexity, 4x4 inches or smaller 84 86
Ostomy skin barrier, with flange,
extended wear, without built-in
convexity, larger than 4x4 inches 84 86
Barrier skin protection
Skin barrier, solid; 4x4 inches 86 92
Adhesive, liquid 90 92
Ostomy skin barrier, liquid 88 94
Ostomy skin barrier, powder 88 94
Ostomy barrier, solid 84 90
Ostomy faceplate equivalent, silicone
ring 82 86
Ostomy ring 88 92
Ostomy skin barrier, non-pectin
based, paste 86 88
Ostomy skin barrier, pectin-based
paste 86 84
Skin barrier, wipes, box of 50 86 86
Skin barrier, solid, 6x6 inches 88 86
Skin barrier, solid, 8x8 inches 86 86
Adhesive or non-adhesive, disk or
foam pad 86 86
Closed pouch
Ostomy skin barrier, closed, with
extended wear barrier attached, with
built-in convexity 84 88
Ostomy pouch, closed, with barrier,
with filter 80 84
Ostomy pouch, closed, with barrier
attached, with built-in convexity 80 84
Ostomy pouch, closed, without
barrier, with filter (1 piece) 80 84
Ostomy pouch, closed, fuse use on
barrier with non-locking flange (2
pieces) 78 82
Ostomy pouch, closed, fuse use on
barrier with locking flange (2
pieces) 77 80
Ostomy pouch, closed, with barrier
attached 88 92
Ostomy pouch, closed, without barrier
attached 90 90
Ostomy pouch, closed, for use on
faceplate 86 90
Ostomy pouch, closed, for use on
barrier with flange 90 92
Stoma cap 86 92
Other accessories
Ostomy faceplate 84 88
Adhesive remover wipes 82 80
Ostomy vent 73 80
Ostomy belt 88 92
Ostomy belt with peristomal hernia
support 75 80
Ostomy filter 75 82
Ostomy deodorant, liquid 73 78
Ostomy deodorant, solid 73 77
Ostomy supply, miscellaneous 80 84
Ostomy absorbent material for use in
ostomy pouch to thicken liquid stomal
output 73 75
Tape, non-waterproof 88 86
Tape, waterproof 88 86
Adhesive remover or solvent 86 90
Ostomy accessory, convex insert 82 84
Appliance cleaner, incontinence and
ostomy appliances 75 77
Appendix IX: Reported Information on Medicaid Coverage of Ostomy Supplies
and Related Limits Appendix IX: Reported Information on Medicaid Coverage
of Ostomy Supplies and Related Limits
Percent
of
covered Percent of
Number supplies dollar caps or
of with supply limits
supplies dollar that are
covered caps exceeded:
and/or
Home supply No
State health limits Outpatient Often Rarely Never response
Alabama 14 8 20 0 0 100 0
Alaska 69 69 81 0 100 0 0
Arizona 69 69 100 26 23 51 0
Arkansasa 54 54 78 0 0 100 0
California 60 59 15 90 0 0 10
Colorado 69 69 0 0 0 0 0
Connecticut 64 0 93 0 98 0 2
Delaware 69 69 96 0 100 0 0
District of
Columbia 0 69 100 55 38 7 0
Florida 65 66 96 0 99 0 2
Georgia 0 17 25 0 100 0 0
Hawaii 69 69 100 100 0 0 0
Idahob 69 69 100 0 44 57 0
Illinois 0 68 99 2 99 0 0
Indiana 69 69 0 0 0 0 0
Iowa 69 69 96 0 99 2 0
Kansas 57 57 83 0 0 100 0
Kentuckyc 69 68 55 100 0 0 0
Louisiana 63 63 65 0 100 0 0
Maine 69 69 0 0 0 0 0
Maryland 69 69 0 0 0 0 0
Massachusetts 67 55 97 0 100 0 0
Michigan 63 63 91 0 100 0 0
Minnesota 69 47 100 0 29 71 0
Mississippi 67 67 97 0 100 0 0
Missouri 69 68 46 0 100 0 0
Montana 69 69 100 0 100 0 0
Nebraska 69 69 100 0 99 0 1
Nevadad 69 69 42 0 100 0 0
New Hampshire 69 69 0 0 0 0 0
New Jersey 0 68 12 0 100 0 0
New Mexico 0 69 96 0 0 100 0
New York 69 69 0 0 0 0 0
North Carolina 23 0 0 0 0 0 0
North Dakotae 69 69 96 99 0 2 0
Ohio 52 52 74 0 100 0 0
Oklahoma 69 69 10 0 0 100 0
Oregon 68 68 99 0 100 0 0
Pennsylvania 57 58 45 0 100 0 0
Rhode Island 69 69 100 100 0 0 0
South Carolina 69 69 99 0 97 3 0
South Dakota 67 67 0 0 0 0 0
Tennessee 69 69 0 0 0 0 0
Texas 57 0 10 86 0 0 14
Utah 35 35 6 0 100 0 0
Vermont 69 69 0 0 0 0 0
Virginia 69 69 100 100 0 0 0
Washington 68 68 65 9 76 16 0
West Virginia 69 69 100 0 0 100 0
Wisconsin 62 62 90 0 100 0 0
Wyoming 69 69 0 0 0 0 0
Appendix X: Re Food Products Program Appendix X: Reported Medically
Necessary Food Products Covered by State Medicaid Program
Appendix XI: SSurveMedica Appendix XI: Summary of Drugs Listed in Our
Survey to Treat IBD That Are Covered by Medicaid for Adults and Children
Appendix XII: Comments from the Centers for Medicare & Medicaid Services
Appendix XII: Comments from the Centers for Medicare & Medicaid Services
Appendix XIII: Appendix XIII: GAO Contact and Staff Acknowledgments
GAO Contact
Staff Acknowledgments
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Highlights of GAO-06-63, a report to congressional committees
December 2005
MEDICARE AND MEDICAID COVERAGE
Therapies and Supplies for Inflammatory Bowel Disease
Inflammatory bowel disease (IBD) affects an estimated one million
Americans. IBD patients often have difficulty digesting food. As a result,
they may require parenteral nutrition (intravenous feeding) or enteral
nutrition (tube feeding), medically necessary food products to supplement
their diets, and medications. In addition, some IBD patients must care for
their ostomies-surgically created openings for the discharge of digested
food.
IBD advocates have recently expressed concerns regarding the ability of
IBD patients to obtain the health care they need. The Research Review Act
of 2004 directed GAO to study the Medicare and Medicaid coverage standards
for individuals with IBD, in both home health and outpatient delivery
settings. GAO (1) identified the Medicare and Medicaid coverage standards
for five key therapies used for the treatment of IBD and (2) determined
what specific supplies used in these therapies Medicare and Medicaid
programs will pay for. In this work, GAO examined Medicare's national and
local coverage policies and conducted a survey of Medicaid programs in the
50 states and the District of Columbia.
Medicare generally provides coverage for parenteral and enteral nutrition
and ostomy supplies in both home health and outpatient delivery settings.
However, specific standards regarding medical conditions and appropriate
documentation must be met for parenteral and enteral nutrition to be
covered. Medicare has one coverage standard governing the provision of
ostomy supplies-that beneficiaries receiving these items have had an
ostomy. Medicare does not cover medically necessary food products and
generally does not cover self-administered drugs, which include most drugs
taken by IBD patients. However, medically necessary drugs, including those
that are self-administered, will be covered by Medicare's voluntary
prescription drug benefit, which becomes effective in January 2006. State
Medicaid programs reported covering, at least partially, each of the five
therapies. The survey indicated that most states' Medicaid coverage
standards are generally comparable to Medicare's coverage for parenteral
and enteral nutrition and ostomy care.
State Medicaid Programs That Reported Coverage of Five IBD Therapies for
Adults and Children
Parenteral Enteral
nutrition nutrition Ostomy care Medically necessary food products Drugsa
Source: GAO survey of state Medicaid programs.
Note: For purposes of this report, the District of Columbia is considered
a state.
aFor this analysis, GAO is defining states' coverage of drugs to treat IBD
as states' coverage of at least one of the brand name drugs or generic
drugs listed in GAO's survey.
Once Medicare coverage standards are met, the program will generally cover
all medically necessary supplies associated with parenteral and enteral
nutrition and ostomy care. The survey of state Medicaid programs showed
variation in the specific supplies that states will provide. While many
states pay for most supplies associated with parenteral and enteral
nutrition, the specific ostomy supplies states cover vary. Most
states-46-reported covering at least some medically necessary food
products. GAO also found that states generally cover the drugs listed in
the survey.
CMS said that GAO correctly described its Medicare coverage policies and
suggested that we clarify our description of Medicare's coverage policy
for prescription drugs that are not self-administered. It also said that
it will continue to consider access issues for Medicare and Medicaid IBD
patients.
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