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Update: The Parity Issue

In 1998, the landscape of prosthetic coverage under insurance plans was changed in Colorado with the passing of a parity bill allowing coverage of prostheses equivalent to that of the Medicare guidelines. Following Colorado, New Hampshire and Maine passed parity bills. With the passing of these three bills, practitioners, amputees, family members and lobbyists from many states across the country are determined to bring prosthetic coverage to their state. But what most states find is that there is an uphill battle to be fought that requires determination, money, connections and resiliency. Despite this daunting task, it appears that it is only a matter of time before prosthetic parity comes to a state near you.

Currently, at least seven states have prosthetic parity bills in their state legislatures and more bills are scheduled to be introduced next session or next year. Although a number of these bills may have limited effect the first time around, there is a buzz within the O&P community that this is an issue that will keep appearing on senators’ desks across the country until the issue is thoroughly reviewed, said Elizabeth Mansfield, president of Outsource Marketing Solutions and primary contact for the Connecticut parity bill.

Insurance and mandates

On the opposing side of the prosthetic parity debate is a formidable opponent: the insurance industry, which has had a long standing opposition to mandates.

“First, I think it is important for [the community] to understand the insurance industry’s view on mandates. We, as an industry, are opposed to mandates in general. A large majority of the mandates that have been enacted have been done without a lot of assessment and without any consideration as to the effect they have on health care cost, or the number of people who will continue to have insurance,” said Susan Pisano, vice president of communications of America’s Health Insurance Plans in Washington, D.C.

According to Pisano, the two factors that are critical to the decision making process when deciding to cover a benefit is “evidence that something works or works more cost effectively than something else and the willingness of the purchaser to pay for the benefit.” Although Pisano could not elaborate further, she did explain, “Mandates make it more difficult for employers to offer coverage to their employees resulting in more people without insurance.”

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A recent study by Pricewaterhouse Coopers confirms the America’s Health Insurance Plans’ stance on mandates.

“We have found that state mandates have been dropping in general along with the growth in insurance premiums. We also found that payers generally believe mandates add to the cost of insurance premiums. Higher premiums reduce the affordability of insurance, which can lead to rising uninsured,” said Sandy Lutz, director of the Health Research Institute at Pricewaterhouse Coopers.

As a result of this trend, it appears that there is more of a concern over affordability and a movement away from mandates, she added.

The Amputee Coalition of America (ACA) is often in the position of refuting claims made by insurance companies regarding the cost of mandates, according to Morgan Sheets from the ACA’s Washington, D.C. office.

“According to a Department of Health and Policy Planning report, providing prostheses would be about 12 cents per month per member on average. That is less than $1.50 per year. That is not going to push anyone off the insurance rolls or put anyone out of business. It will, however, get people the care they need to get back to work and live independent, productive lives,” Sheets said.

“The same report found that covering prosthetics and orthotics for Medicaid recipients resulted in a net savings of almost half a million dollars. These savings were for medical expenses only. They did not include the additional savings from patients that returned to work and resumed paying taxes,” Sheets added. “Both the financial and social benefits provide a strong case for passing prosthetic parity legislation.”

Minute demographic

Despite the insurance companies’ stance on mandates, proponents of prosthetic parity argue that the population of people requiring prosthetic coverage is a minute demographic.

“Insurance is designed to cover totally unexpected, life-changing events and amputation is one of those events,” said Keith Cornell, CP, FAAOP, president of Cornell Orthotics and Prosthetics in Salem, Mass. Cornell understands the insurance industry’s stance on mandates because of potential abuse in the system due to expensive devices, he said, “Although medical discretion will never be taken away from the health care provider, insurance companies will want legislation to state that they will have final say on the medical necessity of a device.”

Eve Rachel Markewich, an attorney with Blank Rome in New York City, is the main contact for the New York prosthetic parity bill.

“To understand the health care industry’s take on mandates must mean that they are ignoring an entire area of care and avoiding the discussion of prosthetic care,” she said. “But, regardless of the trends, states are still working on their own prosthetic parity bills to attempt to have meaningful prosthetic coverage included in their insurance coverage.”

Parity quests

To assist states in their parity quest, the ACA with its Action Plan for People with Limb Loss (APPLL) campaign serves to inform and educate on the benefits of prosthetic parity coverage.

“The ACA and APPLL are working with states across the country by providing the necessary tools to have an effective and solid presentation of a parity bill that will mean something for those with limb loss,” said Sheets, who is the national campaign director of APPLL.

Mansfield said that although the increase in the number of states that are introducing prosthetic parity bills is important and vital to those who need prosthetic coverage, there needs to be continuity to the attack plan.

“With every introduction of an individual state’s bill, the insurance companies, their lobbyists and their allies sharpen their defenses and their arguments against prosthetic and orthotic parity. But, if every state were to present a bill at essentially the same time, the effect would be far greater and only then would legislators and insurance companies take notice of this important and necessary mandate,” she said.

As of press time, a number of the states that O&P Business News spoke with were either in the education phase of the bill, drafting a bill, presently in committee or poised to introduce a bill. Here is where states across the country are with their parity bills for prosthetic coverage.

Mounting a parity initiative

Here is a glimpse of how the legislative process works and how to get the support your bill needs if it is to be passed.

Getting to know your state’s particular legislative process is imperative. By researching your state and getting to know your legislators the work of drafting a parity bill will be less daunting.

“The single most important piece of advice I have for someone who is serious about getting a bill passed is to hire a lobbyist who has connections,” said Matthew Albuquerque, CPO, vice president and founder of Next Step O&P in Manchester, N.H. and the contact person for the New Hampshire parity bill that was passed in 2005. “Understand that what you request is not necessarily what you will be given when looking for prosthetic parity. Amendments are an important part of the legislative process but it is imperative that they are monitored closely or you will end up with language in your bill that you did not want.”

Other advice offered on proceeding with a parity bill included, “Before you even consider a parity bill you will need a core of people who understand the daunting task of getting a mandate passed. Your core should include prosthetists, amputees, physicians and anyone with a sincere interest in prosthetic parity,” said Keith Cornell, CP, FAAOP, main contact for the Massachusetts parity bill. In addition to a group of dedicated people, you will also need the ability to raise funds and you will need access to the highest levels of legislation through knowledgeable lobbyists.

The Amputee Coalition of America through its Action Plan for People with Limb Loss (APPLL) campaign also offers guidance on coordinating a parity coalition. Here are their guidelines on writing an effective plan for mounting an effective parity campaign in your state:

  1. Establish goals, priorities, and timelines. Learn when your state’s legislature is in session and plan your timeline around that schedule.
  2. Determine the political dynamics of the state and fairly assess how realistic passage of parity legislation will be.
  3. Conduct background research. Has other medical mandate legislation been introduced in your state? Did it pass or fail? By how many votes?
  4. Conduct a targeting exercise that will show hard vote counts. Identify other similar legislation and use it as a benchmark. Research your legislators to determine who is likely to support, oppose or unsure/undecided such legislation.
  5. Determine if the best approach is through a legislative solution or to seek solutions through the state insurance commission or insurance companies.
  6. Determine what is needed to pass parity legislation in your state.
  7. Decide if your group needs to hire a lobbyist. Lobbyists can be quite expensive. An alternative is to make sure your coalition includes other medically related non-profits who have an interest in passing parity legislation.
  8. Assess your resources and determine where you need to reach out for additional help. Such help can come from your grassroots base. Other resources include local and national O&P groups, your state’s diabetes association, the state chapter of the American Physical Therapy Association, and Persons with Disabilities Coalitions.
  9. Put together a detailed budget and a fundraising plan to meet that budget.
  10. Develop a communications plan.
 

California

imageThe California parity bill (AB2012) is unlike the other states with current bills in session, as it is not requesting a mandate. Rather it is a consumer protection bill that is designed to eliminate caps on prosthetic coverage.

“All insurance companies offer some sort of prosthetic coverage, but in most cases that coverage in meaningless. If the cap is set at $1,000 or places such stipulations as only one device per subscriber, this is the equivalent of having no coverage,” said Sherry L. Daley, marketing coordinator for Daley Publications and contact person for the California parity bill.

Traditionally, California has a strong lobby against insurance mandates. In using this knowledge the California Orthotics and Prosthetics Association chose to have insurance companies either offer full prosthetic coverage or to eliminate prosthetic coverage all together.

“We want to avoid a mandate and ask that prosthetic coverage be an option that is to be covered entirely and we also ask that durable medical equipment be differentiated from prosthetic devices. We feel that our bill has a good chance of passing since we have both bipartisan authors and votes,” said Daley.

In May, the California Bill AB2012 passed the Assembly Health Committee, the Assembly Business and Professions Committee and the Assembly Appropriations Committee with a unanimous vote. It then headed to the Assembly floor where it was approved by the lower house with no dissenting votes, according to Mansfield. On June 21, the bill was introduced to the Senate, added Daley.

Massachusetts

The parity bill number 4858 in Massachusetts is now in its third legislative session and with its passing it could become a keystone state, said Cornell.

“In Massachusetts, it is quite difficult to get bills passed unless they are truly beneficial. To determine a bill’s worthiness in the state, it must first be studied to determine its efficacy. The outcome of that study found that the estimated cost of the bill would be $0.41 per year during the next 5 years for each beneficiary,” he said. With this cost projection, it is estimated that the Massachusetts bill will save the state about $250,000, which could be redirected to public service, said Cornell.

Currently the bill is still in the House of Representatives after it was referred to the Joint Committee on Health Care Financing on May 22.

“We are cautiously optimistic about the passing of our bill, but we had a recent meeting with Senate president Robert Travaglini and he expressed with good confidence that we had worked out our differences with the insurance company,” said Cornell.

Another option for the bill is to include it as an amendment to the state’s budget, he added.

Model bill

Proposed legislative specifications for a parity bill.

  1. Any health benefit plan, except supplemental policies covering a specified disease or other limited benefit, that provides hospital, surgical, or medical expense insurance and is delivered, issued, executed, or renewed in this state shall provide coverage for benefits for prosthetics that, at a minimum, equals the coverage provided for under the federal Medicare program pursuant to 42 U.S.C. secs. 1395k, 1395l, and 1395m and 42 CFR 414.202, 414.210, 414.228, and 410.100, as applicable to this subsection (14).
  2. For the purposes of this section, “prosthetics” means artificial legs, arms, and eyes, including replacements if required because of a change in the patient’s physical condition.
  3. A health benefit plan may impose co-payment, coinsurance, or deductible amounts, not to exceed the copayment, coinsurance, or deductible amounts imposed for any other covered physical health benefit. A health benefit plan shall reimburse for such prosthetics at no less than the fee schedule amount for such prosthetics under the federal Medicare reimbursement schedule.
  4. Covered benefits are limited to the most appropriate model that adequately meets the medical needs of the patient as determined by the insured’s treating physician.
  5. Coverage under this section must also be provided for repair or replacement of prosthetics if repair or replacement is determined appropriate by the insured’s prosthetist or treating physician.
  6. A health benefit plan shall not impose any annual or lifetime dollar maximum on coverage for prosthetics other than an annual or lifetime dollar maximum that applies in the aggregate to all terms and services covered under the policy.

The model bill information was provided by the Amputee Coalition of America.

 

New Jersey

The New Jersey parity bill has been making headway this session. On June 19, Assembly Bill A1011 was approved by the Financial Institutions and Insurance Committee. The assembly bill, which has four primary sponsors and eight co-sponsors, is now set to come up for a vote on the floor of the Assembly. It is likely that will happen after the summer recess. New Jersey has a duplicate bill in the Senate (S502), which has also been pre-filed for the 2006-2007 session that is to be introduced pending technical review by legislative counsel, according to information provided by Dennis O’Donnell, who is a representative from Amps in Action in Marlton, N.J., and has testified at a number of hearings regarding prosthetic parity.

“We have had a favorable response to the house bill as it has been referred to the house floor for a second reading. We will have to see what happens once it reaches the floor but [the mandate] will be beneficial to the state and it will actually save the state and the insurance companies money in the long run,” he said.

“New Jersey has always been on the forefront of this type of legislation and once we see how the bill progresses in the House, we will have half the battle over before tackling the Senate,” said Richard Bray, CPO, owner of Bray Orthotics and Prosthetics in Westwood, N.J.

Sample letter to Senate Committee members

Below is the sample letter the New Jersey prosthetic parity supporters used to gain support for their parity bill among members of the Senate.

Honorable Senator,

As a member of the Commerce Committee, I am seeking your support for S502, a bill that provides health benefits coverage for orthotic and prosthetic appliances and for reimbursement according to established Medicare schedules.

Every day, New Jersey citizens have to battle discouraging obstacles when trying to obtain prosthetic and orthotic care. Right now, many insurance companies have lumped orthotic and prosthetic appliances into the durable medical equipment clause of their policy then place unrealistic restrictions such as to one prosthesis per lifetime and $2,500 or less per year in orthotic and prosthetic care.

No one expects to ever need these items; however illness, accidents and birth defects are factors that constantly increase the numbers that do. Unfortunately, the restrictions in many insurance policies crush the hope for an independent, productive future and lead in many cases to a reliance on state and federal programs. Many are often at risk of dangerous and costly secondary conditions associated with being restricted to a wheelchair, such as diabetes, obesity, depression or high blood pressure.

Please support S502. This bill will help ensure that people are given the opportunity to lead a full and productive life.

Sincerely,
Your Name
Address

 

New York

The New York parity bill was first introduced in 2001. Following the initial presentation of the bill both the Assembly and Senate bills (currently bill numbers A00450 and S00599) were referred to committee in 2005 and then again in 2006, said Markewich.

“The New York bill has been a grassroots coalition with some strong sponsors to our bill. Assembly Rep. Aileen Gunther and Senate Rep. John Bonacic along with six other cosponsors are behind our bill,” she said. This is the first year that the New York coalition has worked with the ACA and APPLL and are currently working to educate their legislators and constituents on the merits of the bill.

“Although our session ended on June 22, we will be working with the ACA until we have a prosthetic parity bill on the books. We are not asking for extreme coverage, nor are we suggesting that covered persons be exempt from copayment. We are looking for coverage that will allow for individuals to work with their prosthetist to determine the appropriate device for them and have it covered by their insurance so they can live their lives as normal as possible,” said Markewich.

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Pennsylvania

Pennsylvania House bill 2718 has 38 sponsors and was introduced on June 5 before it was referred to Health and Human Services on June 6, according to the Pennsylvania legislature Web site. The bill is being supported by the ACA, area prosthetists and state representative Bernie O’Neill, according to O’Neill’s legislative aide, Nick Antonini.

“The Pennsylvania legislative session ended at the end of June but we will be trying again next session to ensure that it gets into the correct committee,” said Antonini.

Rhode Island

The Rhode Island parity bill had five sponsors and was a grassroots coalition. Bill S2176 was introduced in the House in early February. The prosthetic parity bill passed the House on May 31. It was then heard by the Senate Health and Human Services committee on June 19. They recommended the bill for passage to the Senate Floor. On June 21, the Senate passed an amended version of the bill, and the governor received the bill on June 24. On July 3, the bill became effective without the governor’s signature.

Iowa and Connecticut

Iowa had a prosthetic parity bill introduced in 2006, but it was considered dead at the end of the legislative session. The Iowa bill has been supported by many O&P facilities, but American Prosthetics & Orthotics and Rodney Cheney, CPO, FAAOP, have been the leaders working with lobbyist Matt Eide.

“Matt and Rod have been working with us at the ACA and we are looking forward to re-introducing the bill in the 2007 session,” said Sheets.

The Connecticut bill’s principal leader has been Mansfield, a member of AOPA’s O&P Legislative Action Network and a consultant with the ACA’s action campaign. They chose not to introduce a bill in 2006. Connecticut’s General Assembly has a short session in 2006, which means that individual legislators cannot introduce legislation. Bills have to come out of a committee and the committee it would have had to come out of was the insurance committee.

“As they are the committee that kills mandates,” Mansfield said, “it did not make sense to waste our time.”

The bill will be introduced, with support from the Office of the Healthcare Advocate, in 2007.

Legislative calendars

The 2007 legislative calendars across the United States are looking to be inundated with prosthetic parity bills. Florida is in the education process of their parity bill and will begin to put a bill together in time for the 2007 session, said lobbyist, Sean Campbell for the Florida Association of Orthotists and Prosthetists.

The State Association of Orthotics and Prosthetics in Tennessee along with the ACA and the help of Michael Alder, lobbyist for the Tennessee Orthotics Prosthetics Facilities Inc., will be introducing their bill in January 2007. At press time, they were working with the ACA to hold organizing and strategy meetings in July in Chattanooga, Memphis and Knoxville.

By January, Tennessee lobbyists hope to have a bill ready for the beginning of its session, said Alder. “Our biggest hurdle will be that insurance companies do not like to be told what to do. They always say ‘no.’ But, we are going to work through the opposition, although it is a shame that we have to mandate anything,” he said.

Texas intended to have its bill drafted by Aug. 1 to have it ready for the pre-filing date in November, said Ignacio Madera, Jr., lobbyist for the Texas prosthetics parity coalition on behalf of the Texas Coalition for Insurance Services Parity.

“I believe we have a good chance of getting our bill passed because Texas has passed several quality of life mandates in the past,” he said. Madera noted that a House and Senate sponsor has been identified and the group is now working to secure additional co-sponsors. The coalition also proposes bringing the issue to the attention of the House Public Health and the Senate Health and Human Services committees in the interim.

In the pipeline

There are at least four other states with bills in the pipeline, according to Sheets.

“Robert Maniere, CPO from Comfort Prosthetics and Saul Morris who runs the Michigan Society to Advance Rehabilitation are organizing the Michigan bill. The bill in Kentucky is being led by Eric L. Miller, CPO, the director of O&P at Shriners Hospital in Lexington as well as Tom Watson, CP, the mayor of Owensboro, Ky. Lastly, there is a bill in Ohio that is being worked on and is being backed by the Ohio Orthotics and Prosthetics Association with the assistance of Diane Farabi,” said Sheets.

“The ACA has also been working with activists in Oregon to introduce a bill during the 2007 session. We are meeting with their state association and various stakeholders in July to prepare for the upcoming campaign,” Sheets said. “Oregon has a strong history of reform in the name of public interest. We are excited to work with Forest Sexton, CPO, and Matthew Bradley on this bill.”

“The momentum for prosthetic parity is strong,” she said. “We just met with a group of women from Georgia at our national conference. They are excited to work with us on a bill. Given the huge incidence of diabetes-related amputation in Georgia, we feel this is an important place to organize.”

For more information:

  • To learn more about a state’s parity efforts or to get involved with your state’s effort, contact one of the sources listed below:
  • Matthew Albuquerque is the New Hampshire contact. He can be reached at (603) 668-3831.
  • Michael Alder, the Tennessee contact, can be reached at (615) 591-9782 or e-mail malder@bellsouth.net.
  • Nick Antonini is a legislative aide in the Pennsylvania legislature and can be reached at (215) 441-2626 or e-mail NAntonin@pahousegop.com.
  • Sean Campbell is a lobbyist in Florida who is a representative of the Florida Association of Orthotists and Prosthetists. He can be reached at (321) 452-4679 or e-mail southeaststaffing@prodigy.net.
  • Keith Cornell, CP, FAAOP is the former president of AOPA and is the contact person for the Massachusetts parity bill. He can be reached at (603) 548-7595 or e-mail Keithlegs@aol.com.
  • Sherry Daley is the California contact person and can be reached at (209) 744-2672 or e-mail SLDaley5@juno.com.
  • Ignacio Madera, Jr., is a lobbyist in Texas working with the ACA and is a representative for the Texas Coalition for Insurance Services Parity. He can be reached at (512) 837-5518 or e-mail IMADJR@aol.com.
  • Elizabeth Mansfield is the president of Outsource Marketing Solutions, LLC and is the contact for Connecticut. She can be reached at (860) 967-4184 or e-mail elizabethmansfield@yahoo.com.
  • Eve Rachel Markewich is a partner with Blank Rome LLP and is the contact for the New York parity bill. She can be reached at (212) 885-5387 or e-mail emarkewich@blankrome.com.
  • Dennis O’Donnell, the New Jersey contact for the parity bill and a representative from Amps on Action in Marlton, N.J., can be reached at (856) 278-2422 or e-mail at denodonnell@comcast.net.
  • Richard Bray, CPO, can be reached at (201) 666-6647 or e-mail rjbcpo@aol.com.
  • Forest Sexton, CPO, is co-coordinating the Oregon effort along with Matthew Bradley. Sexton can be reached at legmaster@aol.com or (541) 301-9037. Bradley can be contacted at (503) 349-0127 or bradlmat@ohsu.edu.
  • Morgan Sheets is the national campaign director for Action Plan for People with Limb Loss with the ACA. The ACA offers resources and guidance to people interested in organizing at the state level. She can be reached at (202) 742-1880 or e-mail msheets@amputee-coalition.org.
  • Jeramiah Perez, the action campaign assistant for ACA can be reached at (202) 742-1885 or jperez@amputee-coalition.org.

Kim Norton is a correspondent for O&P Business News.

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