an environment of high and increasing health care costs. The final section presents recommendations.

Overall, the committee found that many of the health plan coverage policies identified in the 1991 Institute of Medicine (IOM) report Disability in America continue to be targets of criticism more than 15 years later. The concept and interpretation of medical necessity remain controversial, as do statutory and regulatory limits on coverage for assistive technologies and personal care services. In many areas, health care financing policies have not evolved to support the independence and community participation of people with disabilities. One major exception is the expanded use by states of waivers of certain Medicaid regulations to cover a wider range of “home-and community-based” services as alternatives to institutional care. For the most part, as also described in Chapters 4, 6, and 8, this nation’s system of health care financing and delivery is not well designed to meet the needs of people with chronic health conditions or disabilities.

The question of whether a technology or service is covered by a health plan arises only for people who are insured. As described in the preceding chapter, although Medicare covers virtually all older adults, almost 14 percent of younger adults with a physical limitation and 8 percent of those with a limitation in activities of daily living (ADLs) are uninsured, as are almost 5 percent of children with special health care needs. For people who are uninsured or whose health plans do not pay for assistive technologies or personal assistance services, the options include going without; paying for the item personally (often called “out-of-pocket payment” or “self-payment”); or securing assistance from vocational rehabilitation, assistive technology, or other special public or private programs, some of which are described below.

Neither this chapter nor the previous one offers a comprehensive examination of health care financing issues relevant to people with disabilities, a task that would demand a report in itself. For example, this chapter does not examine coverage of occupational and physical therapy, including the concerns that have been raised that Medicare payment caps on these services could harm patients with mobility and other impairments.1 It


Responding to rising costs and evidence of improper billing, the Balanced Budget Act of 1997 provided for two dollar-amount caps per beneficiary for outpatient therapy services that were not provided in a hospital outpatient setting: one cap for occupational therapy and another cap for physical therapy services and speech language pathology services combined (GAO, 2005). Although the Centers for Medicare and Medicaid Services is supposed to develop an outpatient therapy payment system that recognizes patient needs and justifies individual waivers of the caps, the agency has, according to the Government Accountability Office (GAO, 2005), lacked the data necessary to do so. The U.S. Congress has provided temporary moratoria on the caps for most of the period since they were implemented in 1999. The Deficit Reduction Act of 2005 (which was enacted in February 2006) provided that exceptions to the

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