Overly-restrictive "medical necessity" determinations made by private insurance companies are preventing many disabled persons from getting needed services, concludes a report released Friday by a federal advisory council.

Insurers eager to cut costs are narrowing the scope of covered services, often at the expense of disabled persons, according to the report. The result is that health care services outside of the doctor's office--including speech pathology, occupational therapy and rehabilitation therapy--are often not covered, it states.

The report, issued by the National Council on Disability, is also critical of insurance policies that sometimes prevent disabled persons from seeing medical specialists without prior authorization from an insurance plan.

Experts urged Congress and the Bush Administration to pass insurance reform known as the "Patients Bill of Rights" with language that expressly gives protections to disabled persons.

They said that many services, such as voice-activated typing devices for people with carpal tunnel syndrome, improve quality of life but are seldom covered because they have no medical benefit for the patient.

"Only by incorporating a more pragmatic, functional standard of improvement or benefit into the equation can the concept of medical necessity be expanded to take fuller account of the needs and opportunities facing Americans with disabilities," the report states.

The council recommended that Congress fund studies looking at the effect of expanded disability benefits on the private insurance industry.

Different versions of the legislation have passed both the US House and the Senate but remain stalled over disputes between lawmakers and the Bush White House over liability provisions.

President Bush ( news - web sites) did not mention patients' rights legislation or private insurance plans during a White House ceremony Friday commemorating the 12th anniversary of the signing of the Americans with Disabilities Act.

Instead Bush concentrated on the strides made in education and work opportunities for disabled persons and on policies in Medicare, the federal health insurance program for elderly and some disabled persons.

The president announced that his administration would "clarify" a Medicare policy that can deny benefits to persons homebound with disabilities if they participate in activities outside of their homes.

The program will now allow patients receiving Medicare-funded home health services to keep their benefits and still attend family reunions, graduations or funerals, according to the Department of Health and Human Services ( news - web sites).

"Medicare recipients considered homebound may lose coverage if they occasionally go to a baseball game," Bush said. "They should not be forced to trade their benefits for a little freedom."

The council also recommended that Congress and the president form a national commission of advocates, legal and medical experts, and patients to study proposed laws governing pain management and assisted suicide. Experts criticized restrictions on pain relief options, including morphine and other narcotic analgesics, that may make disabled persons more likely to face despair and consider suicide.

"Attention devoted to these basic truths may do more to prevent unnecessary and untimely forfeiture of precious life than any measures to control the activities of doctors or to restrict the availability of dangerous drugs could ever hope to accomplish," the report states.