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entitled 'Medicare and Medicaid Coverage: Therapies and Supplies for 
Inflammatory Bowel Disease' which was released on December 16, 2005. 

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Report to Congressional Committees: 

United States Government Accountability Office: 

GAO: 

December 2005: 

Medicare and Medicaid Coverage: 

Therapies and Supplies for Inflammatory Bowel Disease: 

GAO-06-63: 

GAO Highlights: 

Highlights of GAO-06-63, a report to congressional committees: 

Why GAO Did This Study: 

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. 

What GAO Found: 

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 

[See Table 1] 

Source: GAO survey of state Medicaid programs. 

Note: For purposes of this report, the District of Columbia is 
considered a state. 

[A] For 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. 

[End of table] 

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. 

www.gao.gov/cgi-bin/getrpt?GAO-06-63. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Leslie G. Aronovitz, at 
(312) 220-7600 or aronovitzl@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Coverage of IBD Therapies Is Subject to Medicare and Medicaid 
Standards: 

Variation in Medicare and Medicaid Programs' Coverage of Specific 
Supplies Related to IBD Therapies: 

Agency Comments: 

Appendix I: Scope and Methodology: 

Appendix II: Reported State Medicaid Program Coverage of Therapies Used 
by IBD Patients: 

Appendix III: Reported Parenteral Nutrition Therapy Coverage Standards 
by State Medicaid Program: 

Appendix IV: Reported Enteral Nutrition Therapy Coverage Standards by 
State Medicaid Program: 

Appendix V: Reported Medically Necessary Food Products Coverage 
Standards by State Medicaid Program: 

Appendix VI: Reported Parenteral Nutrition Supplies Covered by Medicaid 
in Home Health and Outpatient Delivery Settings: 

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 IX: Reported Information on Medicaid Coverage of Ostomy 
Supplies and Related Limits: 

Appendix X: Reported Medically Necessary Food Products Covered by State 
Medicaid Program: 

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 XIII: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: State Medicaid Programs That Reported Coverage of Five IBD 
Therapies for 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: 

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: 

Table 4: Median Percent of State Medicaid Programs That Reported 
Covering Ostomy Supplies in Home Health and Outpatient Delivery 
Settings: 

Table 5: Number of State Medicaid Programs Covering Medically Necessary 
Food Products for Adults and Children: 

Figure: 

Figure 1: Number of State Medicaid Programs That Reported Covering 
Drugs Listed in Our Survey to Treat IBD: 

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: 

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 IBD[Footnote 1]--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.[Footnote 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. 

A number of IBD patients depend on Medicare and Medicaid,[Footnote 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,[Footnote 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.[Footnote 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.[Footnote 6] The act 
required us to focus on five specific therapies--in both home health 
and outpatient delivery settings[Footnote 7]--parenteral nutrition, 
enteral nutrition formula, ostomy care,[Footnote 8] medically necessary 
food products, and drugs approved by the Food and Drug Administration 
(FDA) for Crohn's disease and ulcerative colitis.[Footnote 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. 

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 Columbia[Footnote 10] 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.[Footnote 
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.[Footnote 12] 

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. 

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.[Footnote 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. 

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: 

* 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.[Footnote 14] 

* 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.[Footnote 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. 

* 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. 

* 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.[Footnote 
16] 

* 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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).[Footnote 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.[Footnote 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.[Footnote 24] 

Coverage of IBD Therapies Is Subject to Medicare and Medicaid 
Standards: 

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: 

Adults and children; 
Parenteral nutrition: 50; 
Enteral nutrition: 49; 
Ostomy care: 51; 
Medically necessary food products: 40; 
Drugs[A]: 50. 

Adults only; 
Parenteral nutrition: 0; 
Enteral nutrition: 0; 
Ostomy care: 0; 
Medically necessary food products: 0; 
Drugs[A]: 1. 

Children only; 
Parenteral nutrition: 1; 
Enteral nutrition: 1; 
Ostomy care: 0; 
Medically necessary food products: 6; 
Drugs[A]: 0. 

Not covered for adults or children; 
Parenteral nutrition: 0; 
Enteral nutrition: 1; 
Ostomy care: 0; 
Medically necessary food products: 5; 
Drugs[A]: 0. 

Total; 
Parenteral nutrition: 51; 
Enteral nutrition: 51; 
Ostomy care: 51; 
Medically necessary food products: 51; 
Drugs[A]: 51. 

Source: GAO survey of state Medicaid programs. 

[A] For 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. 

[End of table] 

Medicare and Medicaid Coverage Standards for Parenteral Nutrition: 

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.[Footnote 25] CMS's coverage 
standards for parenteral nutrition therapy are outlined in both an NCD 
and in local coverage policy.[Footnote 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 tract[Footnote 27] 
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.[Footnote 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.[Footnote 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. 

Medicare and Medicaid Coverage Standards for Enteral Nutrition: 

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.[Footnote 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 Coverage Standards for Ostomy Care: 

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.[Footnote 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 and Medicaid Coverage Standards for Medically Necessary Food 
Products: 

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.[Footnote 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.[Footnote 33] For more 
information on states' coverage standards for medically necessary food 
products, see app. V. 

Medicare and Medicaid Coverage Standards for Drugs to Treat IBD: 

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.[Footnote 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.[Footnote 35] At that time, Medicare will begin to cover self- 
administered drugs approved by the FDA to treat IBD.[Footnote 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. 

Variation in Medicare and Medicaid Programs' Coverage of Specific 
Supplies Related to IBD Therapies: 

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. 

Parenteral Nutrition Supplies Covered by Medicare and Medicaid: 

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 necessity[Footnote 
37] 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.[Footnote 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: 

Supplies: Parenteral nutrition solution; 
Adults: Home health: 34; 
Adults: Outpatient: 42; 
Children: Home health: 35; 
Children: Outpatient: 44. 

Supplies: Parenteral nutrition supply kit; 
Adults: Home health: 35; 
Adults: Outpatient: 43; 
Children: Home health: 36; 
Children: Outpatient: 44. 

Supplies: Parenteral nutrition administration kit; 
Adults: Home health: 36; 
Adults: Outpatient: 45; 
Children: Home health: 37; 
Children: Outpatient: 46. 

Supplies: Parenteral nutrition infusion pump; 
Adults: Home health: 40; 
Adults: Outpatient: 46; 
Children: Home health: 40; 
Children: Outpatient: 47. 

Supplies: Intravenous pole; 
Adults: Home health: 39; 
Adults: Outpatient: 43; 
Children: Home health: 40; 
Children: Outpatient: 45. 

Source: GAO survey of state Medicaid programs. 

[End of table] 

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. 

Enteral Nutrition Supplies Covered by Medicare and Medicaid: 

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.[Footnote 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: 

Supplies: Enteral formula; 
Adults: Home health: 35; 
Adults: Outpatient: 42; 
Children: Home health: 37; 
Children: Outpatient: 44. 

Supplies: Enteral feeding supply kit; 
Adults: Home health: 40; 
Adults: Outpatient: 45; 
Children: Home health: 43; 
Children: Outpatient: 46. 

Supplies: Tubing; 
Adults: Home health: 41; 
Adults: Outpatient: 43; 
Children: Home health: 42; 
Children: Outpatient: 46. 

Supplies: Additive for enteral formula; 
Adults: Home health: 22; 
Adults: Outpatient: 28; 
Children: Home health: 24; 
Children: Outpatient: 30. 

Supplies: Enteral nutrition infusion pump; 
Adults: Home health: 38; 
Adults: Outpatient: 40; 
Children: Home health: 40; 
Children: Outpatient: 42. 

Supplies: Intravenous pole; 
Adults: Home health: 38; 
Adults: Outpatient: 40; 
Children: Home health: 40; 
Children: Outpatient: 42. 

Supplies: Percutaneous catheter/tube; 
Adults: Home health: 30; 
Adults: Outpatient: 33; 
Children: Home health: 31; 
Children: Outpatient: 38. 

Source: GAO survey of state Medicaid programs. 

[End of table] 

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. 

Ostomy Supplies Covered by Medicare and Medicaid: 

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 
barrier[Footnote 40] 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.[Footnote 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,[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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: 

Ostomy categories (number of supplies): Drainable pouch with extended 
wear barrier supplies (2 supplies); 
Median percent of states that cover supplies in each category in home 
health delivery settings: 84; 
Median percent of states that cover supplies in each category in 
outpatient delivery settings: 88. 

Ostomy categories (number of supplies): Drainable pouch with standard 
barrier supplies (14 supplies); 
Median percent of states that cover supplies in each category in home 
health delivery settings: 84; 
Median percent of states that cover supplies in each category in 
outpatient delivery settings: 85. 

Ostomy categories (number of supplies): Irrigation supplies (6 
supplies); 
Median percent of states that cover supplies in each category in home 
health delivery settings: 82; 
Median percent of states that cover supplies in each category in 
outpatient delivery settings: 84. 

Ostomy categories (number of supplies): Fluid discharge management item 
(1 item); 
Median percent of states that cover supplies in each category in home 
health delivery settings: 75; 
Median percent of states that cover supplies in each category in 
outpatient delivery settings: 75. 

Ostomy categories (number of supplies): Adhering pouch barrier supplies 
(2 supplies); 
Median percent of states that cover supplies in each category in home 
health delivery settings: 85; 
Median percent of states that cover supplies in each category in 
outpatient delivery settings: 90. 

Ostomy categories (number of supplies): Extended wear barrier supplies 
(5 supplies); 
Median percent of states that cover supplies in each category in home 
health delivery settings: 84; 
Median percent of states that cover supplies in each category in 
outpatient delivery settings: 86. 

Ostomy categories (number of supplies): Barrier-skin protection 
supplies (13 supplies); 
Median percent of states that cover supplies in each category in home 
health delivery settings: 86; 
Median percent of states that cover supplies in each category in 
outpatient delivery settings: 88. 

Ostomy categories (number of supplies): Closed pouch supplies (11 
supplies); 
Median percent of states that cover supplies in each category in home 
health delivery settings: 84; 
Median percent of states that cover supplies in each category in 
outpatient delivery settings: 88. 

Ostomy categories (number of supplies): Other accessories (15 
supplies); 
Median percent of states that cover supplies in each category in home 
health delivery settings: 80; 
Median percent of states that cover supplies in each category in 
outpatient delivery settings: 82. 

Source: GAO survey of state Medicaid programs. 

Note: Individual supplies under each category appear in app. VIII. 

[End of table] 

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. 

Medically Necessary Food Products Covered by Medicaid: 

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: 

Adults and children; 
Prescription strength vitamins: 29; 
Oral nutritional formulas: 36; 
Food thickeners: 28; 
Baby food and other blenderized products: 2; 
Other products: 12. 

Children only; 
Prescription strength vitamins: 6; 
Oral nutritional formulas: 7; 
Food thickeners: 5; 
Baby food and other blenderized products: 2; 
Other products: 5. 

Neither adults nor children; 
Prescription strength vitamins: 16; 
Oral nutritional formulas: 8; 
Food thickeners: 18; 
Baby food and other blenderized products: 47; 
Other products: 34. 

Total; 
Prescription strength vitamins: 51; 
Oral nutritional formulas: 51; 
Food thickeners: 51; 
Baby food and other blenderized products: 51; 
Other products: 51. 

Source: GAO survey of state Medicaid programs. 

For more details on states' payment of medically necessary food 
products, see app. X. 

[End of table] 

Drugs Covered by Medicaid to Treat IBD: 

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.[Footnote 47] The generic drugs available for 
Azulfidine and Rowasa were covered by 48 and 46 states respectively. 

Figure 1: Number of State Medicaid Programs That Reported Covering 
Drugs Listed in Our Survey to Treat IBD: 

[See PDF for image] 

[End of figure] 

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 aronovitzl@gao.gov. 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. 

Signed by: 

Leslie G. Aronovitz: 
Director, Health Care: 

[End of section] 

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: 

* 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. 

* 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. 

Medicare and Medicaid's Coverage Standards of IBD Therapies: 

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.[Footnote 48] 

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: 

* American Society for Parenteral and Enteral Nutrition: 

* American Gastroenterological Association: 

* Coram Healthcare (provider of home infusion services): 

* Crohn's Disease and Colitis Foundation of America: 

* Digestive Disease National Coalition: 

* North American Society for Pediatric Gastroenterology, Hepatology, 
and Nutrition: 

* The Oley Foundation for Home Parenteral and Enteral Nutrition: 

* United Ostomy Association[Footnote 49] 

Specific Supplies Paid for by Medicare and State Medicaid Programs: 

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).[Footnote 50] 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. 

[End of section] 

Appendix II: Reported State Medicaid Program Coverage of Therapies Used 
by IBD Patients: 

[See PDF for image] 

[A] For 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. 

[B] Only total parenteral nutrition is covered. 

[End of section] 

Appendix III: Reported Parenteral Nutrition Therapy Coverage Standards 
by State Medicaid Program: 

[See PDF for image] 

[A] Patient has to have a severe pathology of the gastrointestinal 
tract that does not allow absorption of sufficient nutrients to 
maintain weight and strength. 

[B] Patient has to have a permanent impairment of the gastrointestinal 
tract, i.e., lasting at least 3 months. 

[C] The patient's maintenance of weight and strength needs to be 
through intravenous nutrition only. 

[D] Other therapies--such as enteral nutrition and medication--need to 
have failed in order for the state to cover parenteral nutrition. 

[E] Patient must have a specific clinical condition in order to qualify 
for coverage of parenteral nutrition. 

[F] Specific 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. 

[G] For acute care adults receiving total parenteral nutrition, 
parenteral nutrition therapy must be the sole source of nutrition. 

[H] Only total parenteral nutrition is covered. Individuals must 
document the reason enteral feeding cannot be given. 

[I] The 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. 

[J] The coverage standards related to pathology and clinical conditions 
are only applicable in home health delivery settings. 

[K] The recipient must require total parenteral nutrition to sustain 
life. Adequate nutrition must not be possible by dietary adjustment, 
oral supplements, or tube enteral nutrition. 

[L] Parenteral nutrition therapy must be the primary source of 
nutrition. 

[End of section] 

Appendix IV: Reported Enteral Nutrition Therapy Coverage Standards by 
State Medicaid Program: 

[See PDF for image] 

[A] Patient 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. 

[B] The impairment has to be considered a permanent condition, i.e., 
lasting at least 3 months. 

[C] The 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). 

[D] 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. 

[E] The state covers enteral nutrition products, and related supplies, 
that are administered orally. 

[F] Specific documentation related to enteral nutrition therapy has to 
be provided in the patients' medical record. 

[G] For acute care adult patients, enteral therapy must be the sole 
source of nutrition. 

[H] For adults, enteral nutrition is covered only if it is the sole 
source of nutrition. 

[I] For adults and children, enteral nutrition must provide 51 percent 
of more of caloric intake. 

[J] For adults, the tube feeding criterion is only applicable in home 
health delivery settings. 

[K] The state does not require documentation for adults. It did not 
respond to this question for children. 

[L] Enteral 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. 

[M] Documentation must indicate that there is a defined pathologic 
process for which nutritional support is therapeutic. 

[N] The state only covers this therapy for children. 

[O] Tube feeding coverage standard is to sustain life rather than to 
maintain weight and strength. 

[End of section] 

Appendix V: Reported Medically Necessary Food Products Coverage 
Standards by State Medicaid Program: 

[See PDF for image] 

[A] Medically necessary food products must be an essential source of 
nutrition. 

[B] Medically necessary food products are covered only for specific 
conditions. 

[C] Medically necessary food products are covered only during the 
period following hospitalization. 

[D] For acute care adult patients, medically necessary food products 
must be the sole source of nutrition. 

[E] The state covers medically necessary food products for certain 
inherited metabolic diseases. 

[F] The 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. 

[G] To 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. 

[H] Nutritional therapy must be the sole source of nutrition. 

[End of section] 

Appendix VI: Reported Parenteral Nutrition Supplies Covered by Medicaid 
in Home Health and Outpatient Delivery Settings: 

[See PDF for image] 

[A] Parenteral nutrition solution includes all types of solutions. 

[B] Parenteral nutrition supply kit which can be premixed or mixed at 
home. 

[C] Parenteral nutrition infusion pump can be portable or stationary. 

[D] Supplies are covered only when administered at home. They are not 
covered in other outpatient delivery settings. 

[End of section] 

Appendix VII: Reported Enteral Nutrition Supplies Covered by Medicaid 
in Home Health and Outpatient Delivery Settings: 

[See PDF for image] 

[A] Enteral formula includes all types. 

[B] Enteral feeding supply kit includes the syringe, pump, and gravity 
fed. 

[C] Tubing includes all types including nasogastric, stomach, and 
gastrostomy. 

[D] Additives for enteral formula. 

[E] Enteral nutrition includes infusion pump with or without an alarm. 

[F] Catheter includes percutaneous catheter, tube anchoring device and 
adhesive skin attachment. 

[G] State's coverage is limited to home health delivery settings. 

[H] The state does not cover enteral nutrition infusion pump - without 
alarm. 

[I] The state does not cover blenderized enteral formulas. 

[J] For adults, the state handles coverage for enteral supplies on a 
case-by-case basis. 

[K] The state only covers specific enteral nutrition supplies. 
Nasogastric tubings with and without stylets along with stomach tubes 
are only covered for children. 

[L] Pediatric enteral formula and blenderized enteral formula are only 
covered for children under the age of 21. 

[M] The state does not cover all enteral formulas. 

[End of section] 

Appendix VIII: Reported Percent of States Covering Ostomy Supplies in 
Home Health and Outpatient Delivery Settings: 

Drainable pouch with extended wear barrier: 

Supply[A] name: Ostomy pouch, drainable, with extended wear barrier 
attached; 
Home health delivery setting: 84; 
Outpatient delivery setting: 88. 

Supply[A] name: Ostomy pouch, drainable, with extended wear barrier 
attached, with built-in convexity; 
Home health delivery setting: 84; 
Outpatient delivery setting: 88. 

Drainable pouch - standard barrier: 

Supply[A] name: Ostomy pouch, drainable with faceplate attached, 
plastic; 
Home health delivery setting: 84; 
Outpatient delivery setting: 90. 

Supply[A] name: Ostomy pouch, drainable with faceplate attached, 
rubber; 
Home health delivery setting: 84; 
Outpatient delivery setting: 90. 

Supply[A] name: Ostomy pouch, drainable, for use on faceplate, plastic; 
Home health delivery setting: 84; 
Outpatient delivery setting: 90. 

Supply[A] name: Ostomy pouch, drainable, for use on faceplate, rubber; 
Home health delivery setting: 84; 
Outpatient delivery setting: 86. 

Supply[A] name: Ostomy pouch, drainable, with barrier; 
Home health delivery setting: 84; 
Outpatient delivery setting: 88. 

Supply[A] name: Ostomy pouch, drainable, high output, for use on a 
barrier with flange (2 piece system), with filter; 
Home health delivery setting: 80; 
Outpatient delivery setting: 82. 

Supply[A] name: Ostomy pouch, closed, for use on barrier with locking 
flange, with filter (2 pieces); 
Home health delivery setting: 80; 
Outpatient delivery setting: 84. 

Supply[A] name: Ostomy pouch, drainable, with barrier attached, with 
filter (1 piece); 
Home health delivery setting: 80; 
Outpatient delivery setting: 84. 

Supply[A] name: Ostomy pouch, drainable, for use on barrier with non- 
locking flange, with filter (2 pieces); 
Home health delivery setting: 80; 
Outpatient delivery setting: 84. 

Supply[A] name: Ostomy pouch, drainable, for use on barrier with 
locking flange (2 pieces); 
Home health delivery setting: 80; 
Outpatient delivery setting: 84. 

Supply[A] name: Ostomy pouch, drainable, for use on barrier with 
locking flange, with filter (2 pieces); 
Home health delivery setting: 78; 
Outpatient delivery setting: 82. 

Supply[A] name: Ostomy pouch, drainable, without barrier attached (1 
piece); 
Home health delivery setting: 86; 
Outpatient delivery setting: 84. 

Supply[A] name: Ostomy pouch, drainable with barrier attached (1 
piece); 
Home health delivery setting: 88; 
Outpatient delivery setting: 88. 

Supply[A] name: Ostomy pouch, drainable, for use on barrier with flange 
(2 piece system); 
Home health delivery setting: 90; 
Outpatient delivery setting: 90. 

Irrigation supply: 

Supply[A] name: Irrigation supply; sleeve; 
Home health delivery setting: 82; 
Outpatient delivery setting: 86. 

Supply[A] name: Ostomy irrigation supply; bag; 
Home health delivery setting: 78; 
Outpatient delivery setting: 82. 

Supply[A] name: Ostomy irrigation supply; cone/catheter, including 
brush; 
Home health delivery setting: 80; 
Outpatient delivery setting: 86. 

Supply[A] name: Lubricant; 
Home health delivery setting: 82; 
Outpatient delivery setting: 84. 

Supply[A] name: Continent device, plug for continent stoma; 
Home health delivery setting: 82; 
Outpatient delivery setting: 84. 

Supply[A] name: Continent device, catheter for continent stoma; 
Home health delivery setting: 82; 
Outpatient delivery setting: 84. 

Supply[A] name: Fluid discharge management: 

Supply[A] name: Bedside drainage bottle; 
Home health delivery setting: 75; 
Outpatient delivery setting: 75. 

Supply[A] name: Barrier with adhering pouch: 

Supply[A] name: Ostomy barrier, with flange, with built-in convexity; 
Home health delivery setting: 84; 
Outpatient delivery setting: 92. 

Supply[A] name: Ostomy skin barrier, with flange, without built-in 
convexity, 4x4 inches or smaller; 
Home health delivery setting: 86; 
Outpatient delivery setting: 88. 

Barrier - extended wear: 

Supply[A] name: Ostomy skin barrier, solid 4x4 inches, extended wear, 
without built-in convexity; 
Home health delivery setting: 84; 
Outpatient delivery setting: 88. 

Supply[A] name: Ostomy skin barrier, with flange, extended wear, with 
built-in convexity, 4x4 inches or smaller; 
Home health delivery setting: 88; 
Outpatient delivery setting: 88. 

Supply[A] name: Ostomy skin barrier, with flange, extended wear with 
built-in convexity, larger than 4x4 inches; 
Home health delivery setting: 84; 
Outpatient delivery setting: 86. 

Supply[A] name: Ostomy skin barrier, with flange, extended wear, 
without built-in convexity, 4x4 inches or smaller; 
Home health delivery setting: 84; 
Outpatient delivery setting: 86. 

Supply[A] name: Ostomy skin barrier, with flange, extended wear, 
without built-in convexity, larger than 4x4 inches; 
Home health delivery setting: 84; 
Outpatient delivery setting: 86. 

Barrier skin protection: 

Supply[A] name: Skin barrier, solid; 4x4 inches; 
Home health delivery setting: 86; 
Outpatient delivery setting: 92. 

Supply[A] name: Adhesive, liquid; 
Home health delivery setting: 90; 
Outpatient delivery setting: 92. 

Supply[A] name: Ostomy skin barrier, liquid; 
Home health delivery setting: 88; 
Outpatient delivery setting: 94. 

Supply[A] name: Ostomy skin barrier, powder; 
Home health delivery setting: 88; 
Outpatient delivery setting: 94. 

Supply[A] name: Ostomy barrier, solid; 
Home health delivery setting: 84; 
Outpatient delivery setting: 90. 

Supply[A] name: Ostomy faceplate equivalent, silicone ring; 
Home health delivery setting: 82; 
Outpatient delivery setting: 86. 

Supply[A] name: Ostomy ring; 
Home health delivery setting: 88; 
Outpatient delivery setting: 92. 

Supply[A] name: Ostomy skin barrier, non-pectin based, paste; 
Home health delivery setting: 86; 
Outpatient delivery setting: 88. 

Supply[A] name: Ostomy skin barrier, pectin-based paste; 
Home health delivery setting: 86; 
Outpatient delivery setting: 84. 

Supply[A] name: Skin barrier, wipes, box of 50; 
Home health delivery setting: 86; 
Outpatient delivery setting: 86. 

Supply[A] name: Skin barrier, solid, 6x6 inches; 
Home health delivery setting: 88; 
Outpatient delivery setting: 86. 

Supply[A] name: Skin barrier, solid, 8x8 inches; 
Home health delivery setting: 86; 
Outpatient delivery setting: 86. 

Supply[A] name: Adhesive or non-adhesive, disk or foam pad; 
Home health delivery setting: 86; 
Outpatient delivery setting: 86. 

Closed pouch: 

Supply[A] name: Ostomy skin barrier, closed, with extended wear barrier 
attached, with built-in convexity; 
Home health delivery setting: 84; 
Outpatient delivery setting: 88. 

Supply[A] name: Ostomy pouch, closed, with barrier, with filter; 
Home health delivery setting: 80; 
Outpatient delivery setting: 84. 

Supply[A] name: Ostomy pouch, closed, with barrier attached, with built-
in convexity; 
Home health delivery setting: 80; 
Outpatient delivery setting: 84. 

Supply[A] name: Ostomy pouch, closed, without barrier, with filter (1 
piece); 
Home health delivery setting: 80; 
Outpatient delivery setting: 84. 

Supply[A] name: Ostomy pouch, closed, fuse use on barrier with non- 
locking flange (2 pieces); 
Home health delivery setting: 78; 
Outpatient delivery setting: 82. 

Supply[A] name: Ostomy pouch, closed, fuse use on barrier with locking 
flange (2 pieces); 
Home health delivery setting: 77; 
Outpatient delivery setting: 80. 

Supply[A] name: Ostomy pouch, closed, with barrier attached; 
Home health delivery setting: 88; 
Outpatient delivery setting: 92. 

Supply[A] name: Ostomy pouch, closed, without barrier attached; 
Home health delivery setting: 90; 
Outpatient delivery setting: 90. 

Supply[A] name: Ostomy pouch, closed, for use on faceplate; 
Home health delivery setting: 86; 
Outpatient delivery setting: 90. 

Supply[A] name: Ostomy pouch, closed, for use on barrier with flange; 
Home health delivery setting: 90; 
Outpatient delivery setting: 92. 

Supply[A] name: Stoma cap; 
Home health delivery setting: 86; 
Outpatient delivery setting: 92. 

Other accessories: 

Supply[A] name: Ostomy faceplate; 
Home health delivery setting: 84; 
Outpatient delivery setting: 88. 

Supply[A] name: Adhesive remover wipes; 
Home health delivery setting: 82; 
Outpatient delivery setting: 80. 

Supply[A] name: Ostomy vent; 
Home health delivery setting: 73; 
Outpatient delivery setting: 80. 

Supply[A] name: Ostomy belt; 
Home health delivery setting: 88; 
Outpatient delivery setting: 92. 

Supply[A] name: Ostomy belt with peristomal hernia support; 
Home health delivery setting: 75; 
Outpatient delivery setting: 80. 

Supply[A] name: Ostomy filter; 
Home health delivery setting: 75; 
Outpatient delivery setting: 82. 

Supply[A] name: Ostomy deodorant, liquid; 
Home health delivery setting: 73; 
Outpatient delivery setting: 78. 

Supply[A] name: Ostomy deodorant, solid; 
Home health delivery setting: 73; 
Outpatient delivery setting: 77. 

Supply[A] name: Ostomy supply, miscellaneous; 
Home health delivery setting: 80; 
Outpatient delivery setting: 84. 

Supply[A] name: Ostomy absorbent material for use in ostomy pouch to 
thicken liquid stomal output; 
Home health delivery setting: 73; 
Outpatient delivery setting: 75. 

Supply[A] name: Tape, non-waterproof; 
Home health delivery setting: 88; 
Outpatient delivery setting: 86. 

Supply[A] name: Tape, waterproof; 
Home health delivery setting: 88; 
Outpatient delivery setting: 86. 

Supply[A] name: Adhesive remover or solvent; 
Home health delivery setting: 86; 
Outpatient delivery setting: 90. 

Supply[A] name: Ostomy accessory, convex insert; 
Home health delivery setting: 82; 
Outpatient delivery setting: 84. 

Supply[A] name: Appliance cleaner, incontinence and ostomy appliances; 
Home health delivery setting: 75; 
Outpatient delivery setting: 77. 

Source: GAO survey of state Medicaid programs. 

[A] Ostomy supplies were placed in related categories based on 
discussions with an official from the United Ostomy Association. 

[End of table] 

[End of section] 

Appendix IX: Reported Information on Medicaid Coverage of Ostomy 
Supplies and Related Limits: 

State: Alabama; 
Number of supplies covered: Home health: 14; 
Number of supplies covered: Outpatient: 8; 
Percent of covered supplies with dollar caps and/or supply limits: 20; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 100; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Alaska; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 81; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Arizona; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 100; 
Percent of dollar caps or supply limits that are exceeded: Often: 26; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 23; 
Percent of dollar caps or supply limits that are exceeded: Never: 51; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Arkansas[A]; 
Number of supplies covered: Home health: 54; 
Number of supplies covered: Outpatient: 54; 
Percent of covered supplies with dollar caps and/or supply limits: 78; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 100; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: California; 
Number of supplies covered: Home health: 60; 
Number of supplies covered: Outpatient: 59; 
Percent of covered supplies with dollar caps and/or supply limits: 15; 
Percent of dollar caps or supply limits that are exceeded: Often: 90; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
10. 

State: Colorado; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 0; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Connecticut; 
Number of supplies covered: Home health: 64; 
Number of supplies covered: Outpatient: 0; 
Percent of covered supplies with dollar caps and/or supply limits: 93; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 98; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
2. 

State: Delaware; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 96; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: District of Columbia; 
Number of supplies covered: Home health: 0; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 100; 
Percent of dollar caps or supply limits that are exceeded: Often: 55; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 38; 
Percent of dollar caps or supply limits that are exceeded: Never: 7; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Florida; 
Number of supplies covered: Home health: 65; 
Number of supplies covered: Outpatient: 66; 
Percent of covered supplies with dollar caps and/or supply limits: 96; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 99; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
2. 

State: Georgia; 
Number of supplies covered: Home health: 0; 
Number of supplies covered: Outpatient: 17; 
Percent of covered supplies with dollar caps and/or supply limits: 25; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Hawaii; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 100; 
Percent of dollar caps or supply limits that are exceeded: Often: 100; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Idaho[B]; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 100; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 44; 
Percent of dollar caps or supply limits that are exceeded: Never: 57; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Illinois; 
Number of supplies covered: Home health: 0; 
Number of supplies covered: Outpatient: 68; 
Percent of covered supplies with dollar caps and/or supply limits: 99; 
Percent of dollar caps or supply limits that are exceeded: Often: 2; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 99; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Indiana; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 0; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Iowa; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 96; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 99; 
Percent of dollar caps or supply limits that are exceeded: Never: 2; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Kansas; 
Number of supplies covered: Home health: 57; 
Number of supplies covered: Outpatient: 57; 
Percent of covered supplies with dollar caps and/or supply limits: 83; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 100; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Kentucky[C]; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 68; 
Percent of covered supplies with dollar caps and/or supply limits: 55; 
Percent of dollar caps or supply limits that are exceeded: Often: 100; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Louisiana; 
Number of supplies covered: Home health: 63; 
Number of supplies covered: Outpatient: 63; 
Percent of covered supplies with dollar caps and/or supply limits: 65; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Maine; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 0; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Maryland; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 0; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Massachusetts; 
Number of supplies covered: Home health: 67; 
Number of supplies covered: Outpatient: 55; 
Percent of covered supplies with dollar caps and/or supply limits: 97; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Michigan; 
Number of supplies covered: Home health: 63; 
Number of supplies covered: Outpatient: 63; 
Percent of covered supplies with dollar caps and/or supply limits: 91; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Minnesota; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 47; 
Percent of covered supplies with dollar caps and/or supply limits: 100; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 29; 
Percent of dollar caps or supply limits that are exceeded: Never: 71; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Mississippi; 
Number of supplies covered: Home health: 67; 
Number of supplies covered: Outpatient: 67; 
Percent of covered supplies with dollar caps and/or supply limits: 97; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Missouri; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 68; 
Percent of covered supplies with dollar caps and/or supply limits: 46; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Montana; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 100; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Nebraska; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 100; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 99; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
1. 

State: Nevada[D]; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 42; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: New Hampshire; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 0; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: New Jersey; 
Number of supplies covered: Home health: 0; 
Number of supplies covered: Outpatient: 68; 
Percent of covered supplies with dollar caps and/or supply limits: 12; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: New Mexico; 
Number of supplies covered: Home health: 0; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 96; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 100; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: New York; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 0; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: North Carolina; 
Number of supplies covered: Home health: 23; 
Number of supplies covered: Outpatient: 0; 
Percent of covered supplies with dollar caps and/or supply limits: 0; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: North Dakota[E]; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 96; 
Percent of dollar caps or supply limits that are exceeded: Often: 99; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 2; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Ohio; 
Number of supplies covered: Home health: 52; 
Number of supplies covered: Outpatient: 52; 
Percent of covered supplies with dollar caps and/or supply limits: 74; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Oklahoma; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 10; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 100; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Oregon; 
Number of supplies covered: Home health: 68; 
Number of supplies covered: Outpatient: 68; 
Percent of covered supplies with dollar caps and/or supply limits: 99; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Pennsylvania; 
Number of supplies covered: Home health: 57; 
Number of supplies covered: Outpatient: 58; 
Percent of covered supplies with dollar caps and/or supply limits: 45; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Rhode Island; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 100; 
Percent of dollar caps or supply limits that are exceeded: Often: 100; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: South Carolina; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 99; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 97; 
Percent of dollar caps or supply limits that are exceeded: Never: 3; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: South Dakota; 
Number of supplies covered: Home health: 67; 
Number of supplies covered: Outpatient: 67; 
Percent of covered supplies with dollar caps and/or supply limits: 0; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Tennessee; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 0; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Texas; 
Number of supplies covered: Home health: 57; 
Number of supplies covered: Outpatient: 0; 
Percent of covered supplies with dollar caps and/or supply limits: 10; 
Percent of dollar caps or supply limits that are exceeded: Often: 86; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
14. 

State: Utah; 
Number of supplies covered: Home health: 35; 
Number of supplies covered: Outpatient: 35; 
Percent of covered supplies with dollar caps and/or supply limits: 6; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Vermont; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 0; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Virginia; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 100; 
Percent of dollar caps or supply limits that are exceeded: Often: 100; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Washington; 
Number of supplies covered: Home health: 68; 
Number of supplies covered: Outpatient: 68; 
Percent of covered supplies with dollar caps and/or supply limits: 65; 
Percent of dollar caps or supply limits that are exceeded: Often: 9; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 76; 
Percent of dollar caps or supply limits that are exceeded: Never: 16; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: West Virginia; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 100; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 100; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Wisconsin; 
Number of supplies covered: Home health: 62; 
Number of supplies covered: Outpatient: 62; 
Percent of covered supplies with dollar caps and/or supply limits: 90; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 100; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

State: Wyoming; 
Number of supplies covered: Home health: 69; 
Number of supplies covered: Outpatient: 69; 
Percent of covered supplies with dollar caps and/or supply limits: 0; 
Percent of dollar caps or supply limits that are exceeded: Often: 0; 
Percent of dollar caps or supply limits that are exceeded: Rarely: 0; 
Percent of dollar caps or supply limits that are exceeded: Never: 0; 
Percent of dollar caps or supply limits that are exceeded: No response: 
0. 

Source: GAO survey of state Medicaid programs. 

Note: Responses for percent of monetary caps or supply limits may 
exceed 100 percent due to rounding. 

[A] Supplies are only covered if they are used at home. Dollar caps and 
supply limits only apply to adults. 

[B] The 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. 

[C] There are no supply limits or dollar caps for home health ostomy 
supplies. 

[D] Supply limits or dollar caps are only for home health. 

[E] Once 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. 

[End of table] 

[End of section] 

Appendix X: Reported Medically Necessary Food Products Covered by State 
Medicaid Program: 

[See PDF for image] 

[A] For 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. 

[B] The state only covers prenatal vitamins. Food thickeners are 
covered for any condition, as long as they are medically necessary. 

[C] For 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. 

[D] The state covers special metabolic formulas for oral administration 
for children under medically necessary food products. 

[E] For prescription strength vitamins, multivitamins can be covered 
but they must have prior authorization and meet the state's criteria 
for medically necessary. 

[F] Coverage for prescription strength vitamins is based on documented 
vitamin deficiencies in the patient's medical record. Nutritional 
formulas taken orally must have prior authorization. 

[G] CMS 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. 

[H] The 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. 

[I] The state covers general nutritional supplements. Other disease 
specific products are not covered. 

[J] For prescription strength vitamins, the state limits coverage for 
children less than two years of age or for prenatal use. 

[K] For prescription strength vitamins, the state covers prenatal 
vitamins for women. 

[L] The state does not cover nutritional shakes and vitamins. 

[End of section] 

Appendix XI: Summary of Drugs Listed in Our Survey to Treat IBD That 
Are Covered by Medicaid for Adults and Children: 

[See PDF for image] 

[A] The state requires patients to use a generic equivalent drug, if 
available. 

[B] The state covers brand name drugs only after documentation of 
medical necessity is complete. The documentation has to include a 
summary of benefit versus risk. 

[C] The state will cover brand name drugs with prior authorization when 
there are generic equivalent drugs available. 

[D] The state does not cover Remicade, Colozal, and Entocort for 
children age 11 or under. 

[E] The state requires prior authorization for Remicade and Asacol. 

[F] The state did not indicate whether it covered the generic drug for 
Azulfidine for children. 

[G] The state will pay for brand name drugs after demonstrating failure 
of generic equivalent drugs. 

[H] The state will cover brand name drugs with prior authorization when 
there are generic equivalent drugs available. 

[I] The state requires prior authorization for Remicade. 

[J] The state requires patients to use a generic equivalent drug, if 
available. 

[K] The state may require prior authorization if generic equivalent 
drug or therapeutic alternatives exist. 

[L] The state requires prior authorization for brand name drugs when 
there is a generic equivalent drug available. 

[M] The state will cover brand name drugs with prior authorization when 
there are generic equivalent drugs available. 

[End of section] 

Appendix XII: Comments from the Centers for Medicare & Medicaid 
Services: 

DEPARTMENT OF HEALTH & HUMAN SERVICES: 
Centers for Medicare & Medicaid Services: 
Administrator: 
Washington, DC 20201: 

DATE: NOV 17 2005: 

TO: Leslie G. Aronovitz: 
Director, Health Care: 
Government Accountability Office: 

FROM: Mark B. McClellan, M.D., Ph.D.: 
Administrator: 
Centers for Medicare & Medicaid Services: 

SUBJECT: Government Accountability Office's Draft Report: MEDICARE AND 
MEDICAID COVERAGE: Therapies and Supplies for Inflammatory Bowel 
Disease (GAO-06-63): 

Thank you for the opportunity to review and comment on the Government 
Accountability Office's (GAO) draft report entitled MEDICARE AND 
MEDICAID COVERAGE: Therapies and Supplies for Inflammatory Bowel 
Disease. The Centers for Medicare & Medicaid Services (CMS) support and 
applaud the GAO's efforts in examining health care access issues that 
affect Medicare beneficiaries and Medicaid recipients in order to 
ensure that they receive adequate health care to treat their 
inflammatory bowel disease (11313) condition. The draft report states 
that 11313 advocates have expressed concern about the ability of 
Medicare beneficiaries and Medicaid recipients to obtain access to 
11313-related care, which has led the GAO to examine this matter. 

With regard to the portions of the report that refer to the IBD 
therapies and supplies currently covered under Part B of the Medicare 
program, we have determined that the GAO has correctly described the 
Medicare coverage policies for parenteral nutrition, enteral nutrition, 
and ostomy supplies. 

The CMS has the following comment to make concerning Medicare's 
coverage policy for the Food and Drug Administration (FDA) approved 
self-administered drugs: 

On page 18, in the first full paragraph, the draft report states 
"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 medications are not included in 
any of the benefit categories contained in the Social Security Act." 
The reason for non-coverage, rather, should be because while the law 
does include a benefit category for drugs, the benefit category limits 
coverage to those drugs that are usually not self-administered. 
Specifically, section 1861(s)(2)(A) of the Social Security Act which 
states that "services and supplies (including drugs and biologicals 
which are not usually self- administered by the patient) [are] 
furnished as an incident to a physician's professional service." This 
means that although 11313- related self-administered drugs are not 
covered by Medicare in the patient's home, IBD-related drugs could be 
covered by Medicare when administered by a physician in a clinical 
setting. We suggest that the GAO clarify this statutory limitation 
throughout the document where they discuss Medicare's lack of coverage. 
The current language implies Medicare has the authority to alter its 
interpretation of the law to cover FDA-approved drugs. 

It is important to know why Medicare does not generally cover self- 
administered drugs, Medicare is currently operating a demonstration 
that began in September 2004 and will end on December 31, 2005. This 
demonstration, mandated under section 641 of the Medicare Modernization 
Act of 2003, serves as a bridge until the Medicare Part D benefit 
becomes available and covers a limited number of self-administered 
drugs which can replace the need for drugs covered under Medicare Part 
B. 

We appreciate the effort that went into this report and as CMS proceeds 
with policy development, we will continue to give deep consideration to 
access issues that affect Medicare beneficiaries and Medicaid 
recipients in their treatment of IBD. 

[End of section] 

Appendix XIII GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Leslie G. Aronovitz (312) 220-7600 or aronovitzl@gao.gov: 

Staff Acknowledgments: 

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. 

FOOTNOTES 

[1] According to the Crohn's Disease and Colitis Foundation of America, 
the number is evenly split between the two diseases. 

[2] Enteral 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. 

[3] The number of Medicare and Medicaid beneficiaries who are IBD 
patients is not known. 

[4] Medicare was established in 1965 in Title XVIII of the Social 
Security Act and is codified as amended at 42 U.S.C. §§ 1395-1395hhh. 

[5] Medicaid payment includes federal and state contributions. 

[6] Pub. L. No. 108-427, § 4, 118 Stat. 2430, 2431. 

[7] For 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. 

[8] The 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. 

[9] In 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). 

[10] Throughout 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. 

[11] Because 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. 

[12] The 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. 

[13] About 10 percent of IBD patients exhibit symptoms of both Crohn's 
disease and ulcerative colitis. This condition is referred to as 
indeterminate colitis. 

[14] Specific supplies included in the parenteral supply kits and 
administration kits can vary, depending on the supplier. 

[15] Specific supplies included in the enteral feeding supply kits can 
vary depending on specific patient needs. 

[16] The prescribing of a drug for treatments other than those 
specified on the label approved by FDA is referred to as off-label use. 

[17] Not 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. 

[18] Congress gave the Secretary of Health and Human Services the 
authority to decide which specific supplies and services within these 
categories are covered by Medicare. 

[19] Specifically, 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. §1395y(a)(1)(A). 

[20] The 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. 

[21] NCDs 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. 

[22] LCDs 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. 

[23] The 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, § 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. 

[24] Optional supplies and services include, among others, prescribed 
drugs, prosthetic devices, home health care services, dental services, 
and physical therapy. 

[25] Covered 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. § 1395x(s)(8). 

[26] Per 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. 

[27] The 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. 

[28] The 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. 

[29] For 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. 

[30] For 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. 

[31] Under 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. 

[32] In addition, the NCD for parenteral and enteral nutrition 
specifically excludes "nutritional supplementation" from coverage. 

[33] For 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. 

[34] Specifically, 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. § 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. 

[35] Medicare Prescription Drug, Improvement, and Modernization, Act, 
Pub. L. No. 108-173, § 101, 117 Stat. 2066, 2071-2152 (codified at 42 
U.S.C. §§ 1395w-101 to 1395w-152). 

[36] Under 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. 

[37] A 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. 

[38] Based 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. 

[39] For 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. 

[40] Skin barriers are used to protect the skin around the stoma and to 
increase overall wear time. 

[41] DMERCs 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. 

[42] The 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. 

[43] A 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. 

[44] According 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. 

[45] The Balanced Budget Act of 1997 mandated the implementation of the 
prospective payment system for home health agencies. Pub. L. No. 105- 
33, § 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. 

[46] We 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.) 

[47] Forty-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. 

[48] The 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. 

[49] The United Ostomy Association permanently ceased operations on 
September 30, 2005. 

[50] HCPCS 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. 

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