United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Health and Environment, Committee

on Commerce, House of Representatives

March 1997 MEDICARE

Most Beneficiaries

With Diabetes Do Not

Receive Recommended

Monitoring Services

GAO/HEHS-97-48

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-270222 

March 28, 1997

The Honorable Michael Bilirakis

Chairman, Subcommittee on Health and Environment

Committee on Commerce

House of Representatives

Dear Mr. Chairman:

Diabetes is a prevalent, costly, chronic disease that has substantial effects

on the Medicare program: at least 1 in 10 beneficiaries is diagnosed with

diabetes, and on average these beneficiaries cost Medicare considerably

more than those without diabetes. Most experts agree that preventive

care—both appropriate medical management and patient selfmanagement—can improve the quality of life for people with diabetes.

Prevention for diabetes aims to slow the disease’s progression through

screening, monitoring, and treating conditions to keep them from

worsening and becoming more costly.

You asked us to examine how well the health care system provides

preventive services to Medicare beneficiaries with diabetes. We focused

our review on the following questions: (1) To what extent are Medicare

beneficiaries with diabetes receiving recommended levels of preventive

and monitoring services? (2) What are health maintenance organizations

(HMO) that serve Medicare beneficiaries doing to improve delivery of

recommended diabetes services? and (3) What activities does the Health

Care Financing Administration (HCFA) support to address these service

needs for Medicare beneficiaries with diabetes?

To respond to these questions, we identified a representative sample of

more than 168,000 people with diabetes in the Medicare fee-for-service

program and reviewed their service claims records for 1994. About 90

percent of the people with diabetes in our cohort were aged 65 or older;

about 10 percent were under age 65 and disabled. We also surveyed 88 HMO

plans serving Medicare beneficiaries on their approaches to preventive

diabetes care. The plans varied in total enrollment, geographic location,

and other characteristics. The combined Medicare enrollment of the 88

health plans was about 2.7 million members. (For detailed descriptions of

our methodology, see apps. I and II.)

We also interviewed staff of 12 of the surveyed HMO plans (plans that

reported having extensive preventive and monitoring services) and of 6

Page 1 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

disease management companies.1 In addition, we reviewed the

professional literature on diabetes care and discussed diabetes

management issues with representatives from medical specialty societies,

interest groups, national and regional HCFA offices, and recognized experts.

We conducted our work between October 1995 and November 1996 in

accordance with generally accepted government auditing standards.

Results in Brief Although experts agree that regular use of preventive and monitoring

services can help minimize the complications of diabetes, most Medicare

beneficiaries with diabetes do not receive these services at recommended

intervals. More than 90 percent of fee-for-service Medicare beneficiaries

with diabetes visited their physicians at least twice in 1994; however, only

about 40 percent received an annual eye exam, and only about 20 percent

received the recommended two specialized blood tests per year to monitor

diabetes control.2

 On the whole, these fee-for-service utilization rates did

not vary substantially by patient age, sex, or race. The provision of

preventive and monitoring services under managed care is also below

recommended levels, although data for this service delivery approach are

limited. For example, among people with diabetes aged 18 to 64 who were

enrolled in private HMO plans, less than half received an eye exam in 1995.

According to diabetes experts, several factors may contribute to low use

of monitoring services, including physicians’ lack of awareness of the

latest recommendations and patients’ lack of motivation to maintain

adequate self-management care.

Medicare HMO efforts to improve diabetes care have been varied but

generally limited. Most plans report that they have focused on educating

their enrollees with diabetes about self-management and their physicians

about the need for preventive and monitoring services. Some HMOs have

begun to take additional steps, such as tracking the degree to which

physicians provide preventive care, and a few plans have developed

comprehensive diabetes management programs. Because virtually all of

these efforts have begun within the past 3 years, little is known about their

effectiveness.

1

Disease management companies are organizations, often affiliated with pharmaceutical firms, that

contract with employers, insurers, and HMOs to provide educational materials, individual or group

counseling, and sometimes service reminder systems for people with specific diseases, such as

diabetes or asthma.

2

The recommended eye exam for people with diabetes is a dilated, funduscopic eye examination, most

often performed by an ophthalmologist or optometrist. The specialized blood test is the

glycohemoglobin or glycosylated hemoglobin test.

Page 2 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

HCFA also has begun to test preventive care initiatives for diabetes and has

targeted this area for special emphasis. Its efforts include helping to plan a

nationwide diabetes education program, encouraging local experiments to

increase use of monitoring services and improve quality of care for people

with diabetes, and developing performance measures for providers of

diabetes care. But like the efforts of Medicare HMOs, HCFA’s initiatives are

quite recent, and the agency does not yet have results that would allow it

to evaluate effectiveness. To the extent that these initiatives prove costeffective, they may help promote better management of diabetes care.

Background Diabetes affects a significant portion of Medicare beneficiaries and results

in an even larger share of Medicare costs. Diagnosed cases of diabetes are

estimated to be 10 to 15 percent of the Medicare population, or roughly

3 million to 5 million people, and nearly as many cases may be

undiagnosed.3

 According to one estimate, treating people with diabetes

may account for as much as 25 percent of all Medicare costs.4

People who have diabetes use more health services than nondiabetics:

they have two to three times more ambulatory contacts (physician,

emergency room, and hospital outpatient visits), three times more

hospitalizations, and are more likely to live in nursing homes. Moreover,

diabetes is the leading diagnosis associated with use of Medicare’s rapidly

growing home health services, representing about 10 percent of all home

health visits. In addition, complications of the disease clearly can diminish

quality of life. Diabetes is a leading cause of blindness, end-stage renal

disease, and lower extremity amputations; and people with diabetes have

rates of coronary heart disease and stroke that are two to five times those

of nondiabetics.

3

Diabetes mellitus comprises a heterogeneous group of metabolic disorders characterized by high

blood glucose (sugar) levels. Though there is no single cause of diabetes, both genetic and

environmental or lifestyle factors—such as obesity and lack of exercise—are involved in its etiology.

Diabetes occurs more commonly among women, minorities, and people of lower socioeconomic

status. The two major types of diabetes are (1) insulin-dependent diabetes mellitus, known as juvenile

or type I diabetes, and (2) noninsulin-dependent diabetes mellitus, known as adult onset or type II.

Noninsulin-dependent diabetes accounts for about 90 percent of all cases. Despite the terminology,

people with noninsulin-dependent diabetes may use insulin or oral medications to help control blood

glucose levels.

4

The estimated 25 percent of all Medicare costs is cited in M.I. Harris and R.C. Eastman, “Early

Detection of Undiagnosed Non-Insulin-Dependent Diabetes Mellitus,” Journal of the American Medical

Association, Vol. 276, No. 15 (1996), pp. 1261-62. This figure refers to Medicare costs for all services

provided to people with diabetes, including services for conditions that may be unrelated, such as

cancer therapy. Moreover, Medicare beneficiaries with diabetes commonly have several chronic

conditions, adding to the cost of their care.

Page 3 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

Diabetes experts generally agree that routine provision of several

preventive and monitoring services can help physicians and patients

manage the disease more effectively and control its progression. A 1993

landmark study, known as the Diabetes Control and Complications Trial

(DCCT),5

 and other studies have provided evidence of opportunities for

improving care.6

 The DCCT showed that improved glucose control can

retard the onset and progression of the complications of diabetes. The

American Diabetes Association’s (ADA) current recommendations for

diabetes management, the most frequently cited clinical practice

guidelines for diabetes care, reflect these studies’ results.7

Most of the ADA-recommended preventive and monitoring services are

covered benefits for Medicare beneficiaries with diabetes. Excluded as

covered benefits, however, are some services and supplies that might

facilitate active patient self-management. For example, people in

traditional, fee-for-service Medicare (about 90 percent of all beneficiaries)

bear the costs of insulin, syringes, and, in some cases, glucose test strips

used to help monitor their blood sugar levels at home.8

 For those

beneficiaries enrolled in an HMO (about 10 percent of Medicare

beneficiaries nationwide), these supplies and services may or may not be

included in the benefit package, depending on the HMO. Some members of

the Congress have proposed legislation that would expand Medicare

coverage to include payment for diabetes education in an outpatient,

nonhospital-based setting, as well as payment for blood-testing strips for

all beneficiaries with diabetes.9

5

The Diabetes Control and Complications Trial Research Group, “The Effect of Intensive Treatment of

Diabetes on the Development and Progression of Long-Term Complications in Insulin-Dependent

Diabetes Mellitus,” The New England Journal of Medicine, Vol. 329, No. 14 (1993), pp. 977-86. Although

this trial involved only people with insulin-dependent (type I) diabetes, there is reasonable agreement

that the results should be applied to people with noninsulin-dependent (type II) diabetes as well.

6

Two studies that have confirmed the DCCT are (1) P. Reichard, M. Pihl, U. Rosenqvist, and J. Sule,

“Complications in IDDM Are Caused by Elevated Blood Glucose Level: The Stockholm Diabetes

Intervention Study (SDIS) at 10-Year Follow Up,” Diabetologia, Vol. 39 (1996), pp. 1483-88; and (2) Y.

Ohkubo, H. Kishikawa, E. Araki, and others, “Intensive Insulin Therapy Prevents the Progression of

Diabetic Microvascular Complications in Japanese Patients With Non-Insulin-Dependent Diabetes

Mellitus: A Randomized Prospective 6-Year Study,” Diabetes Research and Clinical Practice, Vol. 28

(1995), pp. 103-17.

7

The ADA is a national nonprofit educational organization, whose most recent clinical guidance was

published in “Clinical Practice Recommendations 1997,” Diabetes Care, Vol. 20, suppl. 1 (1997).

8

Currently, Medicare pays for 100 testing strips per month for people with diabetes who use insulin.

The consensus seems to be that the number of strips covered is adequate but that coverage should be

extended to some people with diabetes who do not use insulin.

9

For example, two bills were introduced in January 1997: H.R. 15, the Medicare Preventive Benefit

Improvement Act of 1997, which includes proposed diabetes screening benefits, and H.R. 58, the

Medicare Diabetes Education and Supplies Amendments of 1997.

Page 4 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

Medicare

Beneficiaries With

Diabetes Are Not

Receiving

Recommended Levels

of Monitoring

Services

Under both fee-for-service and HMO delivery, Medicare beneficiaries with

diabetes are falling far short of receiving recommended levels of

monitoring services, according to available evidence. A number of factors,

both patient- and physician-related, may contribute to the low use of these

services.

Providers Agree on

Services but Recognize

Need for Flexibility on

Frequencies

The ADA clinical care guidelines reflect the published evidence and expert

opinion on what constitutes quality diabetes care. The guidelines

recommend monitoring services that with appropriate follow-up and

treatment, may lead to improved health outcomes. Receiving these

monitoring services, however, does not guarantee improved blood sugar

control or prevention of complications.

Nonetheless, experts generally agree that providing the monitoring

services recommended by the ADA represents good diabetes care. Among

the ADA’s recommendations for people who have noninsulin-dependent

diabetes (more than 90 percent of diabetics in Medicare), we selected six

monitoring services (see table 1) that can be measured using Medicare

claims data. Several other recommended services were excluded because

all occurrences could not be identified by this methodology. For example,

foot examinations to detect people at elevated risk of ulcers and infections

(and to prevent lower extremity amputations), when provided, are most

likely to be part of an office visit and if so would not be claimed as a

separate service.

Page 5 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

Table 1: Diabetes Monitoring Services

Included in Our Analysis

Service

Frequency per

year Purpose

Physician visits Two to four Monitor general health and diabetes

control, order and review lab tests,

conduct foot exams, and refer to other

services

Eye exam (dilated) One Identify early signs of diabetic

retinopathy and refer for treatment

Glycohemoglobin test Two Assess and monitor achievement of

glycemic control goals

Urinalysis test One Monitor kidney function by testing for

albumin or protein

Serum cholesterol test One Monitor cholesterol as a contributor to

heart disease and circulatory problems

Flu shot (in season) One General preventive service for high-risk

populations such as older people and

people with diabetes

Source: ADA, “Clinical Practice Recommendations, Standards of Medical Care for Patients With

Diabetes Mellitus,” Diabetes Care, Vol. 19, suppl. 1 (1996). The annual flu shot is recommended

by the American College of Physicians and supported by the Centers for Disease Control and

Prevention (CDC).

The recommended service frequencies specified in table 1 generally apply

to the average person with noninsulin-dependent diabetes.10 However,

some debate surrounds the most appropriate frequencies for certain

individuals, particularly older people with diabetes: for example, whether

the eye exam should be provided annually or whether providing it every 2

years is just as effective. Some individuals may need more or fewer

services depending on their age, medical condition, whether they use

insulin, or how well their blood sugar is controlled. According to an ADA

representative, a small percentage of people with diabetes could

appropriately receive certain recommended services at reduced frequency.

10Because these are service targets, 100-percent compliance for all people with diabetes should not be

expected.

Page 6 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

Under Fee-for-Service

Care, Utilization Rates for

Recommended Services

Leave Room for

Improvement

Overall, our cohort of about 168,000 Medicare beneficiaries with diabetes

fell far short of receiving the recommended frequencies of the six

monitoring services in 1994.11 As figure 1 shows, Medicare beneficiaries

with diabetes had the opportunity to receive such services because

94 percent of them had at least two physician visits in 1994. In fact, the

mean number of physician visits was 9.5.12 However, less than half of these

beneficiaries with diagnosed diabetes received an eye exam (42 percent),

only 21 percent received the two recommended glycohemoglobin tests,

and only about half (53 percent) had a urinalysis.13

11In our analysis of utilization rates for these monitoring services, we did not adjust for differences in

the severity of patient illness or comorbidities, which are important contributors to service use

variations. Some qualifications related to the use of Medicare claims data are discussed in app. I.

12We did not determine the primary purpose of the visits, and many may have been for purposes other

than monitoring the patient’s diabetes.

13Some experts observed that the service utilization rates we obtained, while low compared with

recommended levels, generally showed some improvement since the late 1980s and early 1990s.

Page 7 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

Figure 1: Fee-for-Service Utilization

Rates for Recommended Monitoring

Services, 1994

Percent Receiving Services

0

10

20

30

40

50

60

70

80

90

100

Physician Visits

Eye Exam

Glycohemoglobin

Urinalysis

Cholesterol

Flu Shot

Recommended Monitoring Services

94

42

21

53

70

44

More Medicare beneficiaries with diabetes (70 percent) received a serum

cholesterol test than any of the services except physician visits. This may

reflect both the successful public education campaign of the late 1980s

about cholesterol risks and the frequent inclusion of cholesterol in

automated multichannel blood tests. The annual flu shot is likely to be

underreported in Medicare claims data because many people receive flu

shots in nonmedical settings such as shopping malls and business offices.

One HCFA official estimated that Medicare claims may underreport the

number of flu shots received by as much as 20 percentage points.

Utilization rates are even lower when considering the monitoring services

as a unit. (See fig. 2.) About 12 percent of the Medicare beneficiaries with

diabetes in our cohort did not receive any of the following key monitoring

services: at least one eye exam, one glycohemoglobin test,14 one urinalysis,

14For this analysis, we looked for only one glycohemoglobin test, instead of the recommended two,

because so few beneficiaries in our cohort had received two tests.

Page 8 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

and one serum cholesterol test. About 11 percent of beneficiaries showed

Medicare claims for all four of these services.

Figure 2: Percent in Fee-for-Service

Receiving Key Monitoring Services,

1994

Percent

0

10

20

30

40

50

60

70

80

90

100

01234

Number of Services Received

12

21

30

26

11

Note: The four key services are at least one eye exam per year, one glycohemoglobin test, one

urinalysis, and one serum cholesterol test.

Utilization rates for the six monitoring services by patient age, sex, race,

and geographic characteristics were as follows:

• Utilization rates were generally similar for men and women and for all age

groups over age 65. The single most notable utilization difference was in

the annual eye examination rate for people with diabetes under age 65.

Forty-three percent of people with diabetes aged 65 to 74 and 44 percent

of those aged 75 and older received an eye exam, compared with only

28 percent of the disabled in Medicare under age 65.

• White Medicare beneficiaries with diabetes received the six monitoring

services at consistently higher rates than did beneficiaries who were black

or of another racial group,15 but for most services the differences were not

15For this analysis, we used four beneficiary race categories on the basis of those available in HCFA

Medicare claims data: white, black, other (including Hispanic, Asian, and North American Natives),

and unknown.

Page 9 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

great. For example, the utilization rate for the eye exam was 43 percent for

whites, 36 percent for blacks, and 37 percent for beneficiaries of other

races. The rate for at least one glycohemoglobin test was 39 percent for

whites, 31 percent for blacks, and 37 percent for beneficiaries of other

races.

• The use of diabetes monitoring services varied by geographic area. For

example, among the 10 states that had the largest Medicare fee-for-service

diabetes populations in our study, Florida and New York had the highest

percentages of beneficiaries with diabetes who received all four key

services, at 18 and 16 percent, respectively; Pennsylvania had the lowest

rate, 8 percent. As another example of this variation, of all 50 states and

the District of Columbia, Nebraska had the highest eye exam rate

(54 percent), and Alabama had the lowest (32 percent), followed by

Tennessee and Oregon (33 percent).

• Seventy-four percent of our Medicare fee-for-service diabetes cohort lived

in Metropolitan Statistical Areas (MSA) and the remaining 26 percent lived

in non-MSAs, generally rural areas. Monitoring services’ utilization rates

were slightly but consistently higher for beneficiaries living in MSAs, as a

whole, than for those living outside MSAs.

(Detailed data on service utilization rates by these characteristics appear

in app. I.)

Limited Data Suggest

Monitoring in Medicare

HMOs Also Falls Short of

Recommendations

Because HCFA does not require its HMO contractors to report patientspecific utilization data, we could not systematically assess the use of

recommended monitoring services by beneficiaries with diabetes in

Medicare HMOs. Unlike fee-for-service providers, Medicare HMOs are paid a

monthly rate per enrollee, regardless of the actual services provided.

Therefore, to be paid, the plans do not need to document utilization, costs

of care, or patient case mix. Individual plans, however, may develop such

information for in-house management purposes.

Diabetes monitoring services’ utilization rates are also below

recommended levels in Medicare HMOs, according to the limited data we

obtained from published research and other sources. For example, the HMO

component of HCFA’s Ambulatory Care Diabetes Project, including 23

health plans that volunteered as project participants in five states

(California, Florida, Minnesota, New York, and Pennsylvania), determined

that 61 percent of Medicare enrollees received an eye exam in an 18-month

period ending in 1995; 69 percent received at least one glycohemoglobin

test.

Page 10 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

Another indicator of the level of monitoring services provided to people

with diabetes in HMOs is the eye exam rate reported in the Health Plan

Employer Data and Information Set (HEDIS), a standardized, voluntary HMO

performance reporting system developed by the National Committee on

Quality Assurance (NCQA). HEDIS data are the most commonly used HMO

performance measures for the non-Medicare, employer-insured HMO

population. Nationwide, the average diabetic eye exam rate reported by

HMOs participating in HEDIS was 42 percent in 1995, but the rate varied

widely among the few plans whose reports we obtained, ranging from 20

to 70 percent. Although it is unclear whether these rates also apply to

Medicare beneficiaries with diabetes enrolled in HMOs, the national average

rate of 42 percent was the same rate we found in our 1994 Medicare

fee-for-service population.

Patient and Physician

Factors Contribute to

Less-Than-Recommended

Utilization

Although it is unclear what specifically accounts for the less-thanrecommended use of monitoring services, diabetes experts have identified

several factors, including patient and physician attitudes and practices,

that contribute to suboptimal diabetes management in general. Many of

these factors are not unique to diabetes management; they also affect

delivery of preventive care for many other chronic conditions.

Experts agree that the patient bears much of the responsibility for

successful diabetes management. For a variety of reasons, however,

people with diabetes may not actively manage their disease. Lack of

knowledge, motivation, and adequate support systems are often cited as

key reasons. People with diabetes may not fully understand the

seriousness of their disease or the need for regular preventive and

monitoring services. Consequently, they may not always follow up on

routine appointments and referrals. For many, diabetes self-management

does not become a priority until serious complications develop. Then,

difficult changes in well-established habits, such as diet, lack of exercise,

and smoking, may be needed. A family support system is important to help

patients make such changes, but it is often lacking.

Experts have also noted that the substantial out-of-pocket costs for people

with diabetes—that can result from incomplete insurance coverage for

diabetes-related supplies, such as insulin, syringes, and glucose-testing

strips—may discourage some people with diabetes from actively managing

their disease. For example, syringes may cost about $10 to $15 per 100,

insulin costs about $40 to $70 for a 90-day supply, glucose-testing meters

Page 11 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

cost from $50 to $100, and glucose-testing strips cost $.50 to $.72 each (or

about $1,000 a year for a person with diabetes who tests four times a day).

Physicians and other health care providers also may contribute to low

utilization rates for recommended services, according to literature reports

and experts we contacted. Some physicians may not be well versed in the

latest diabetes care guidelines, or they may not know of recent research

demonstrating the efficacy of treatments. Others may disagree with the

need for all recommended services for all patients or, specifically, with the

recommended frequency of services. Some physicians may be discouraged

from active diabetes management with older patients because, though

some monitoring services may identify complications, they do not prevent

them; and without patient behavior changes, health outcomes are unlikely

to improve.

Another important factor affecting physician practices is the severity of a

patient’s diabetes and the extent of other medical problems. Many

Medicare beneficiaries with diabetes have several serious medical

conditions. We were told that during a patient visit, a physician is likely to

focus on a patient’s most urgent concerns, neglecting ongoing diabetes

management and patient education.

Finally, inadequate support systems for many providers may contribute to

less-than-recommended service delivery, according to some reports.

Managed care plans and physician practices may lack automated medical

records and service-tracking systems that could provide timely records of

patient service use and reminders when routine preventive and monitoring

services, such as those for diabetes, are needed.

HMO Efforts to

Manage Diabetes Care

Are Varied but Limited

Collectively, the 88 HMOs in our survey reported a wide range of diabetes

management efforts; in general, however, most plans’ efforts are limited.

The HMOs identified more than 30 different kinds of diabetes management

activities, ranging from featuring articles on diabetes in their publications

to monitoring the degree to which their physicians are providing

preventive services.16 The type and number of reported activities varies

greatly: a few HMOs have comprehensive diabetes management programs,

but most plans’ efforts are much more limited. HMOs told us that they have

focused their efforts on educating people with diabetes about selfmanagement and their physicians about the need for recommended

16For details about these approaches and their use by HMOs according to size, model type, geographic

location, and tax status (profit or nonprofit), see app. II. In general, we did not find strong associations

between the types of approaches used and specific HMO characteristics.

Page 12 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

preventive and monitoring services. Even HMOs with comprehensive

diabetes management programs have initiated their efforts mostly in the

past 3 years. As a result, little is known yet about the effectiveness of these

efforts or which approaches work better than others.

Although we did not survey fee-for-service group practices on their

diabetes management approaches, several of these groups also may be

exploring ways to improve diabetes care in response to the DCCT research

findings and practice guidelines. For example, one multispecialty group

practice has established a comprehensive diabetes education and

treatment center, and another group told us they have started to monitor

utilization of the diabetic eye exam and have implemented a qualityimprovement program to increase utilization.

Most Efforts to Date Focus

on Education

Every HMO in our survey reported using at least one type of effort to

educate enrollees with diabetes about appropriate diabetes management.

Following are examples of the kinds of approaches they reported:

• Written materials: The most common approach (used by 82 of the 88

plans) is featuring articles about diabetes management in publications

directed to all enrollees. Other approaches include placing brochures

about diabetes management in physicians’ waiting rooms and making a

comprehensive manual on diabetes care available to all enrollees with

diabetes.

• One-on-one educational sessions: Sixty-eight HMOs reported having

diabetes-related health professionals, such as nurses, certified diabetes

educators, or other specialists, provide diabetes education to individuals

with diabetes. During our follow-up interviews with 12 plans,17 the HMOs

reported a wide variety of approaches to educating such enrollees, from

regular meetings with experts on exercise and nutrition to a telephoneadvice service that fields enrollees’ questions about diabetes.

• Classes: During our follow-up interviews, we learned that a number of

HMOs offer classes for several levels of diabetes education: basic classes

for people newly diagnosed with diabetes, intermediate classes to provide

ongoing management support, and advanced classes for people with

diabetes who want to learn how to closely control their blood sugar levels.

Besides educational efforts for enrollees, most HMOs said they also had

begun educational efforts for physicians. Commonly used techniques to

17We selected 12 of the 88 surveyed plans for additional, follow-up interviews. The plans we selected

reported providing extensive preventive and monitoring services. We collected some of the material in

this section during these follow-up interviews.

Page 13 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

educate physicians on the importance of preventive care include sending

written materials (reported by 71 plans) and holding meetings with groups

of physicians (46 plans). Nearly three-fourths of the HMOs reported using

clinical practice guidelines on diabetes care.18 Some supplement these

guidelines with more intensive education. For example, one HMO reported

that its endocrinologists meet regularly with small groups of primary care

physicians to provide training on important diabetes topics, such as

diabetic eye disease and foot care. The plan has also developed a

physician training video on diabetic foot care.

Some of the HMOs—10 of the 88 we surveyed—contract with disease

management companies to provide diabetes education services. One such

company, for example, offers what they call three platforms of services:

(1) educational mailings, (2) telephone-based education and counseling,

and (3) face-to-face education and counseling. For a fixed, per person,

monthly fee, which varies by the platform selected by the contracting

group, the disease management company provides services to any of the

plan’s enrollees with diabetes who choose to participate.

Many Plans Are

Augmenting Education

With Other Approaches

Although education may effect short-term behavioral changes, some

experts express concern about the difficulty people with diabetes and

physicians have in maintaining behavioral changes. Information about

managing diabetes is essential to good control of blood sugar levels, but

information alone may not be enough to motivate the behavior and

lifestyle changes necessary to maintain such control. For example, one

diabetes expert told us that many people with diabetes revert to old

behaviors within 6 months unless they receive additional education or

support. As the director of diabetes clinical research at a large

pharmaceutical firm put it, “the successful implementation of good

diabetes management, through good control of blood sugar levels, can

only be achieved through significant daily changes in lifestyle by the

diabetic. This is very hard to do.”

HMOs reported using a wide variety of approaches to continuously

encourage appropriate diabetes management. Following are some of the

approaches they reported:

18Some relationship does exist between the type of approach and a characteristic of the HMO,

according to our analysis: the greater the number of Medicare enrollees, the higher the likelihood that

the HMO has a clinical practice guideline. Forty-six percent of HMOs with less than 10,000 Medicare

enrollees reported having such a guideline, compared with 84 percent of HMOs with 20,001 to 50,000

Medicare enrollees and 92 percent with more than 50,000 enrollees.

Page 14 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

• Reminders to enrollees and physicians: About half of the HMOs reported

one or more such efforts. For example, one HMO provides a small, walletsized “scorecard” to enrollees with diabetes that lists recommended

annual services and has a chart for enrollees to record the dates they

receive each service. One HMO posts signs in examining rooms reminding

people with diabetes to remove their shoes and socks to prompt

physicians to check patients’ feet, and another attaches service reminder

sheets to enrollees’ charts when they come in for any visit.

• Performance monitoring and feedback: Many health plans are trying to

improve preventive care utilization rates by providing feedback to

physicians on their compliance with recommended standards. Of the 62

plans that reported use of a clinical practice guideline for diabetes, 52 have

a system to monitor physicians’ compliance with it. The plans are most

likely to monitor utilization of services related to HEDIS reporting

requirements, and some reported systems to convey such utilization

results to their physicians.19

• Diabetes registries: HMOs reported maintaining regularly updated registries

of their enrollees with diabetes to monitor overall compliance with

recommended standards and to mail them information and appointment

reminders. For example, one HMO uses its registry and its claims records to

mail a reminder letter to enrollees who have not received an eye exam in

the past year. Another plan combines its diabetes registry with pharmacy,

laboratory, and billing data, all of which can be accessed by physicians to

review a patient’s use of services and determine which services should be

provided.

• Diabetes clinics: A few HMOs reported offering regular comprehensive

diabetes care clinics. This involves the HMO setting aside days when people

with diabetes can see their physicians, a nutritionist, a podiatrist, and

other specialists and receive all necessary laboratory services in a single

visit. One HMO reported the hope that these clinics would encourage

self-sustaining diabetes support groups, while reducing the number of

physician office visits.

• Support systems: One HMO has been providing education and support to

Medicare beneficiaries who have diabetes or asthma through a voluntary,

confidential, toll-free telephone system. Nurse counselors trained in these

chronic diseases answer health care questions, provide education, and

encourage self-management skills.

Five of the HMOs reported committing substantial resources to develop a

systemwide comprehensive diabetes management program. For example,

19To monitor HEDIS performance measures, the plans collect data according to NCQA specifications,

using chart reviews, claims or encounter data, or a combination of both.

Page 15 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

one HMO we contacted has established a population-based approach to

diabetes management, with long-term goals of improving patient health

status and satisfaction as well as performance on cost and utilization. The

HMO measures patient outcomes with both clinical and subjective values,

which range from improved blood glucose control and prevention of

microvascular disease to the patient’s assessment of improved quality of

life and sense of well-being. The plan relies on a variety of interventions to

meet enrollees’ needs, including diabetes chronic care clinics at several

family practice sites, patient self-management notebooks, and diabetes

telephone education. Interventions designed to help physicians provide

better care to enrollees with diabetes include an online diabetes registry

for physicians that is updated monthly, use of evidence-based clinical

practice guidelines, outcomes reports for physicians, and provider

education and training by diabetes expert teams consisting of an

endocrinologist and a nurse. These teams travel to all family practice sites

several times each year to see patients jointly with the family practice

teams.

Little Evidence Available

on Effectiveness of

Diabetes Management

Efforts

HMOs in our survey generally had little information about the extent to

which their diabetes management approaches have affected the use of

recommended monitoring services. Even the plans reporting the most

comprehensive approaches told us that they collect utilization data on five

or fewer services and began collecting this information in 1993 or 1994.

Some HMOs said they collect no such data. The service monitored most

often (by 58 HMOs) was the diabetic eye exam, probably because HEDIS, the

performance-reporting system for commercial HMOs, requires plans to

measure the percentage of their enrollees with diabetes under age 65 who

receive an annual eye exam.

Although little information exists on the relative effectiveness of specific

approaches, most experts generally believe that intensive and sustained

interventions are most likely to support long-term behavior change. For

example, one disease management company told us that its in-person

counseling and education program is likely to be more effective at

improving utilization rates than communicating with enrollees by

telephone or mailings. Because intensive interventions are probably more

expensive to provide than other approaches, measuring their effectiveness

is important.

Of the 88 plans surveyed, 13 reported having information about the effect

of their diabetes management efforts on the service use or health

Page 16 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

outcomes of their enrollees with diabetes or on the costs to their plans.

This is largely because most diabetes management programs are relatively

new, and plans do not have systems established to collect and analyze data

on outcomes or cost. From the plans that reported information about the

effectiveness of their diabetes management efforts, we heard the

following:

• Using a variety of strategies, one HMO has shown improved utilization and

outcomes. Annual eye examinations increased from 47 percent of

enrollees with diabetes in 1994 to 53 percent in 1995, and glycohemoglobin

test results showed that the percentage of enrollees with diabetes in good

or optimal control improved from 35 to 39 percent.

• Officials of another HMO believe that increased utilization of annual eye

exams and glycohemoglobin testing, measured over a 2-year period, are

attributable to a program that includes mailings to people with diabetes

and an annual performance report for physicians. To increase utilization of

the eye exam, the HMO used its diabetes registry to identify 24,000 enrollees

with diabetes who had no record of ever receiving an eye exam. After

sending letters to those enrollees and their physicians, the plan found that

2,640, or 11 percent, went for an eye exam within 3 months, and, as a

result, 48 were referred for appropriate treatment.

• One HMO found that enrollees’ glycohemoglobin values improved by

16 percent after the HMO established a diabetes management program,

including a 2-day self-management class for enrollees newly diagnosed

with diabetes, quarterly follow-ups with a certified diabetes educator or

registered nurse, quarterly reminder letters about scheduling

appointments, and a communication system for the plan’s

multidisciplinary diabetes team. According to plan officials, in many cases,

their enrollees were able to stop taking insulin and control their diabetes

with other methods.

HCFA Has Targeted

Diabetes for Special

Initiatives, but

Effectiveness Is Still

Largely Unknown

HCFA has identified diabetes as a major health problem in the Medicare

population and has targeted the disease for special initiatives to improve

physician and patient awareness, service delivery, and, ultimately, patient

health outcomes. As in the private sector, however, most of HCFA’s

diabetes management initiatives are either new or not yet under way;

therefore, clear evidence on which approaches are most effective is not

yet available. In addition, some experts suggest that the agency should do

more to encourage improved diabetes management.

Page 17 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

Diabetes Education and

Service Delivery Initiatives

Have Begun

Four years ago, HCFA officials crafted a strategic plan for the agency that

was designed to move it from its traditional role as a payer to that of a

responsible, value-based purchaser. HCFA’s mission includes not only

protecting the fiscal soundness of HCFA programs, but also ensuring access

to affordable, quality health services for its beneficiaries to improve their

health status. To this end, HCFA officials determined that diabetes care was

a suitable target for action initiatives.

HCFA has started several types of initiatives designed to educate

beneficiaries and physicians about diabetes management and to encourage

increased use of recommended services. These initiatives are based on the

belief that if beneficiaries and providers know about the steps involved in

effectively managing diabetes, and if systems are in place to help remind

them when certain services are needed, then both may take a more active

role in ensuring that appropriate diabetes services are delivered.

Following are some of HCFA’s initiatives in this area:

• Nationwide Diabetes Education Program: HCFA is actively participating in

the National Diabetes Education Program, organized by CDC and the

National Institute of Diabetes and Digestive and Kidney Diseases, part of

the National Institutes of Health. This program is designed to increase

general public awareness of diabetes as well as patient and provider

education about diabetes and practice guidelines. A draft program plan is

expected by June 1997.

• Local projects to encourage utilization: HCFA contracts with peer review

organizations (PRO) to conduct local projects to improve the quality of care

for Medicare beneficiaries.20 Working with the HCFA regional offices, PROs

currently are required to implement at least one diabetes-related

quality-improvement project involving the providers in their states.

Twenty-one PROs have reported a total of 33 diabetes-related projects now

under way. For example, the PRO in the state of Washington has developed

a method, using Medicare claims data, for identifying beneficiaries with

diabetes who are at high risk of lower extremity amputations and

encouraging them to get therapeutic shoes to prevent such complications.

In addition to fee-for-service quality projects, many PROs are working with

HMOs to develop strategies for improving diabetes care, including patient

information mailings and physician reminder systems. In Arizona, the PRO

has collected baseline data on 15 quality indicator services from six

participating HMOs. Together, they have implemented a variety of

interventions, including the creation of diabetes databases, special referral

20PROs generally are private, nonprofit organizations of physicians and health professionals, with each

PRO covering one or more states. Many PROs are coordinating their diabetes efforts with CDC’s

Diabetes Control Programs in various states.

Page 18 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

and education for noncompliant patients, and the provision of diabetes

services to homebound patients. After 1 year of implementation, the

quality indicators services have improved by 38 percent.

• Multistate evaluation of intervention strategies: HCFA’s Ambulatory Care

Diabetes Project involves fee-for-service and HMO providers and PROs in

eight states. The two-part project has completed baseline data collection

on diabetes service utilization. The intervention stages have been

completed, and the remeasurement phase began on January 1, 1997.

Participating HMOs have been developing a wide variety of interventions

not limited to education, such as reminders to enrollees and physicians

and special incentives for beneficiaries.

HCFA Is Preparing to

Implement Other

Initiatives

HCFA also has committed to encouraging the development of better datacollection systems for tracking service use. The agency is planning several

initiatives to develop better information on utilization:

• Application of HEDIS performance measures in Medicare: This year, for the

first time, HCFA will require its HMO risk and cost contractors to report the

new HEDIS 3.0 performance measures, including the diabetic eye exam rate

and flu shot rate. A measure of the glycohemoglobin test may be added in

the future. HCFA eventually plans to release this information as part of a

comparative “report card” on Medicare HMOs to help beneficiaries choose

among plans.

• Expansion of performance measurement to include fee-for-service: HCFA is

considering pilot tests to determine the feasibility of expanding

performance measurement to include fee-for-service beneficiaries in

addition to HMO beneficiaries. Such an expansion would most likely

include the diabetes measures used in HMO plans and examine

performance at both the community level and for beneficiaries receiving

care from large group practices.

• Development of other measurement systems: HCFA is supporting the

development of other process- and outcomes-based performancemeasurement systems for monitoring diabetes care. Specifically, HCFA

awarded a contract to the RAND Corporation to refine quality-of-care

measures, including diabetes measures, developed by the Foundation for

Accountability.21 These measures may be tested in Medicare HMOs and

fee-for-service in 1997, and, if successful, HCFA may consider adopting

them as a reporting requirement in 1998.

21The Foundation for Accountability is an independent organization of consumers and public and

private health care payers that promotes the use of patient-oriented measures of health care quality.

Page 19 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

• Registry of beneficiaries: HCFA’s Office of Research and Demonstrations is

planning an ongoing registry of a representative sample of Medicare

beneficiaries in fee-for-service and HMOs that would provide a study

population for regular surveys of health status, health history, and

socioeconomic and functional status. This new program would provide a

valuable database for a wide range of studies, including research on the

chronically ill, such as people with diabetes.

Because several of HCFA’s diabetes management initiatives have started

only recently, and others are still in the planning stages, it is not yet

possible to determine which of these projects are most likely to be

effective. Some experts have suggested that HCFA should do more,

including the following:

• test the effects of easing potential barriers to active diabetes selfmanagement, such as the current limitations on coverage of supplies

(including blood-testing strips) and diabetes self-management education;

• implement incentive systems to reward physicians for achieving and

maintaining practice changes that promote better health outcomes;22

• test diabetes management programs, such as mailed reminder cards or a

telephone counseling service, with voluntary Medicare patient

participation; and

• support provider-certification programs specifically for diabetes care that

are being developed by professional organizations.

Conclusions Diabetes care is a microcosm of the challenges facing the nation’s health

care system in managing chronic illnesses among the elderly. The

prevalence and high cost of diabetes make it an opportune target for

better management efforts. When beneficiaries receive less than the

recommended levels of preventive and monitoring services, the result may

be increased medical complications and Medicare costs. On the other

hand, following the recommendations may enhance beneficiaries’ quality

of life.

Effectively managing diabetes is hard to accomplish, however, and

requires a concerted effort by beneficiaries and physicians. People with

diabetes often do not understand or fully appreciate the seriousness of

their disease nor the potential for serious complications. Physicians,

22HCFA is planning to test an outcomes-based reimbursement incentives approach that eventually may

be applied to diabetes. In a demonstration involving anticoagulation therapy, HCFA plans to establish

an incentive payment to providers based on documentation of good patient outcomes, rather than on

physician compliance with recommended processes of care.

Page 20 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

whether in fee-for-service or managed care, may not take all steps

necessary to ensure that their patients with diabetes receive

recommended preventive care. Among HMOs, where coordinated care and

prevention are expected to receive special emphasis, many plans are

exploring ways to improve diabetes management through reminder

systems, telephone hot lines, incentive programs, group clinics, and other

approaches. In general, however, providers may be reluctant to invest in

more targeted and expensive approaches until their cost-effectiveness is

more evident. Recognizing the importance of this issue, HCFA has initiated

a reasonable and promising strategy of testing a variety of approaches to

learn what works in Medicare—that is, what is effective and what can be

implemented at reasonable cost.

Agency Comments

and Our Response

HCFA officials generally agreed with the information and issues discussed

in a draft of this report, noting that, “interventions to prevent the

progression of early complications . . . [that] cause significant morbidity

are of key importance to this high risk population.” They raised one

conceptual issue on the appropriate quality of care for elderly diabetes

patients. Most Medicare beneficiaries with diabetes have had the disease

for many years and are likely to have other serious chronic conditions.

Therefore, the appropriate frequency of certain monitoring services, such

as glycohemoglobin testing, should depend on the treatment regimen for

an individual patient, rather than a generic recommendation. HCFA officials

also provided a number of technical suggestions that we incorporated

where appropriate. A copy of HCFA’s comments appears in appendix III.

We recognize that the service and frequency recommendations in the ADA

guidelines are not standards to be applied absolutely to every Medicare

beneficiary with diabetes but represent good care for an average person.

Because we examined the records for more than 168,000 Medicare

beneficiaries, we believe our conclusions on aggregate underperformance

of preventive and monitoring services are accurate.

In addition, we obtained comments on our draft report from several

experts in diabetes care and public health. They generally agreed with our

finding that the use of diabetes preventive and monitoring services could

be improved. Like HCFA officials, they observed that differences among

individuals with diabetes may justify some variation in the use of

recommended services. We responded to these points and incorporated

technical comments as appropriate.

Page 21 GAO/HEHS-97-48 Medicare Diabetes Care
B-270222 

As arranged with your office, unless you publicly announce its contents

earlier, we plan no further distribution of this report until 30 days from the

date of this letter. At that time, we will send copies to interested parties

and make copies available to others on request. Please call me on

(202) 512-7119 if you or your staff have any questions. Major contributors

to this report are listed in appendix IV.

Sincerely yours,

Bernice Steinhardt

Director, Health Services Quality

 and Public Health Issues

Page 22 GAO/HEHS-97-48 Medicare Diabetes Care
Page 23 GAO/HEHS-97-48 Medicare Diabetes Care
Contents

Letter 1

Appendix I 

Methodology for

Determining Use of

Recommended

Diabetes Services in

Fee-for-Service

Medicare

26

Selecting a Diabetes Cohort From Medicare Fee-for-Service Data

Files

26

Adding Enrollment and Eligibility Data to Diabetes Cohort

Records

27

Identifying and Counting Recommended Diabetes Services 27

Appendix II 

Methodology for

Determining Use of

Diabetes Management

Approaches by

Medicare HMOs

35

Methodology 35

Survey Results 37

Appendix III 

Comments From the

Health Care Financing

Administration

40

Appendix IV 

Major Contributors to

This Report

42

Tables Table 1: Diabetes Monitoring Services Included in Our Analysis 6

Table I.1: Diabetes Cohort Demographic Characteristics 29

Table I.2: Overall Utilization Rates for Recommended Services 30

Table I.3: Utilization Rates for Recommended Services, by Age

Group

30

Table I.4: Utilization Rates for Recommended Services, by Race 31

Table I.5: Utilization Rates for Recommended Services, by Sex 31

Page 24 GAO/HEHS-97-48 Medicare Diabetes Care
Contents

Table I.6: Combined Utilization Rates for Four Key Services, by

Diabetes Cohort Demographic Characteristics

32

Table I.7: Utilization Rates for Recommended Services, by State 33

Table II.1: Characteristics of HMO Plans in Our Survey 36

Table II.2: HMO Responses to Selected Survey Questions 37

Table II.3: Diabetes Interventions Reported by HMOs 38

Table II.4: HMOs Efforts to Monitor Recommended Services by

Plan Characteristic

39

Figures Figure 1: Fee-for-Service Utilization Rates for Recommended

Monitoring Services, 1994

8

Figure 2: Percent in Fee-for-Service Receiving Key Monitoring

Services, 1994

9

Abbreviations

ADA American Diabetes Association

CDC Centers for Disease Control and Prevention

DCCT Diabetes Control and Complications Trial

HCFA Health Care Financing Administration

HEDIS Health Plan Employer Data and Information Set

HMO health maintenance organization

MSA Metropolitan Statistical Area

NCQA National Committee on Quality Assurance

PRO peer review organization

SAF Standard Analytical File

Page 25 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix I 

Methodology for Determining Use of

Recommended Diabetes Services in

Fee-for-Service Medicare

A 1995 HCFA study of eye examinations for Medicare beneficiaries with

diabetes in the state of Washington provided a model for identifying

people with diabetes and specific services in the Medicare claims data. We

modified that model to address our research question on the basis of

published research in the field, consultation with HCFA officials involved in

similar studies and a Medicare part B carrier, and input from an informal

panel of expert reviewers.

The analysis was performed in three steps: (1) selecting a cohort of

Medicare beneficiaries with diabetes, (2) adding beneficiary data to select

only people who were enrolled in Medicare fee-for-service and part B

during the entire study period, and (3) analyzing cohort characteristics and

1994 service utilization rates. This appendix describes the general

methodology and results.

Selecting a Diabetes

Cohort From

Medicare

Fee-for-Service Data

Files

We used HCFA’s 5% Sample Beneficiary Standard Analytical File (SAF) to

obtain a nationwide representative sample of Medicare beneficiaries. This

file contains final action claims data for a 5-percent sample of Medicare

beneficiaries. We determined that this file would provide a sufficient

number of claims from which to select a representative sample of

Medicare fee-for-service beneficiaries with diabetes. We limited this part

of our analysis to two parts of the 5% Sample Beneficiary SAF—Inpatient

Data and Physician/Supplier Data—for calendar years 1992 and 1993.23 We

did this because our selection criteria involved only inpatient hospital and

physician services. To be selected for our cohort, a beneficiary had to have

had at least one inpatient hospital admission or two physician visits coded

for diabetes.

Because we wanted to measure the extent to which Medicare beneficiaries

with diabetes received recommended medical services, we selected only

beneficiaries we could positively identify as having diabetes. HCFA officials

advised us that hospital inpatient claims noting a diagnosis of diabetes

were reliable. Therefore, we required only one hospital inpatient

admission for selecting a beneficiary.

Physician/Supplier Data, however, might note a diabetes diagnosis when a

beneficiary was being tested for diabetes, even if the test result was

negative. Therefore, to avoid selecting people without diabetes, we

required beneficiaries to have had at least two physician visits with a

23We identified our diabetes cohort from 1992 and 1993 claims data, then reviewed cohort member

claims in 1994 for service utilization rates.

Page 26 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix I 

Methodology for Determining Use of

Recommended Diabetes Services in

Fee-for-Service Medicare

diagnosis of diabetes before selecting them on the basis of physician visits

alone.24 To eliminate selections based on a physician office visit (claim

1) and a laboratory or other procedure arising from the same visit (claim

2), we selected only claims coded as “face-to-face” physician visits.

Adding Enrollment

and Eligibility Data to

Diabetes Cohort

Records

After adding enrollment and eligibility data to our diabetes cohort records,

we could delete certain beneficiary groups from our sample. First, we

excluded all beneficiaries with a date of death on or before December 31,

1994, because these people would not have had a complete year’s service

history for 1994. We also excluded beneficiaries who were not enrolled in

part B (for coverage of physician services) for all of 1994. They might have

received services for which they paid themselves, and Medicare would

have had no record of the services. Likewise, we excluded beneficiaries

who were enrolled in an HMO at any time during the year because Medicare

would have had no claims records for the services they received while in

the HMO. Finally, after reviewing preliminary data, we excluded (1) endstage renal disease beneficiaries because we could not determine whether

some services we were looking for had been put under a different

procedure code and (2) beneficiaries with diabetes living outside the 50

states and the District of Columbia.

During this step, we also resolved changes in beneficiary identification

numbers and obtained current residence and demographic data. We used

the Enrollment Data Base and Health Insurance Skeleton Eligibility WriteOff files for this purpose.

Identifying and

Counting

Recommended

Diabetes Services

The last step was to determine the services received by our diabetes

cohort in 1994 by comparing the cohort with the 1994 5% Sample

Beneficiary SAF. This time, we checked all six component claims files:

Inpatient, Hospital Outpatient, Physician/Supplier, Skilled Nursing Facility,

Home Health, and Hospice. We also checked a special file of influenza

vaccinations developed by HCFA.

24As with inpatient claims, we accepted any of the ICD-9-CM codes to identify diabetes (the 250 codes),

plus a few codes for diabetes-related conditions. ICD-9-CM is the International Classification of

Diseases, 9th revision, Clinical Modification (5th edition, 1996), the standard coding system used for

medical conditions.

Page 27 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix I 

Methodology for Determining Use of

Recommended Diabetes Services in

Fee-for-Service Medicare

We searched the claims files for procedure codes for six diabetes

preventive and monitoring services recommended by the American

Diabetes Association (ADA):25

• physician visits,

• glycohemoglobin test,

• dilated eye examination,

• urinalysis,

• serum cholesterol test, and

• influenza vaccination.

We determined the number of beneficiaries in our cohort who received

each of the services as well as combinations of services. These numbers

provided numerator data to calculate the percentage of cohort members

with diabetes who received the services at recommended intervals. The

denominator was the total number of beneficiaries with diabetes that we

identified in our final cohort (that is, the 168,255 beneficiaries who were

alive through 1994 and continuously enrolled in Medicare part B and

fee-for-service). We analyzed the six service utilization rates by patient

age, race, sex, Medicare eligibility category, and state and Metropolitan

Statistical Area of residence. Tables I.1 to I.7 provide detailed data from

some of these analyses, along with a demographic description of the final

1994 Medicare fee-for-service diabetes cohort.

Determining service utilization rates using Medicare claims data presents

potential sources of bias. On the one hand, rates based on services

identified in the claims data may underestimate actual utilization because

claims or billing data may be miscoded, incomplete, or missing. When

people receive services in nonmedical settings or if for any reason a bill is

not submitted to Medicare, no record of the service appears in claims data.

We believe influenza vaccination is the service most affected by such

underreporting in our study, but underreporting may apply to other

services to a lesser extent. On the other hand, our rates may be overstated

because our cohort consists of Medicare beneficiaries with a known

diagnosis of diabetes who used diabetes-related services in 1992, 1993, and

1994. These individuals had relatively strong ties to the health care system

and were perhaps more likely than the average beneficiary to be referred

25We relied primarily on ADA recommendations because our review of the literature and contacts with

medical professional societies and diabetes experts indicated that ADA’s guidelines are the most

widely accepted. We defined the six services using the 1996 HCFA Common Procedure Coding System,

which is a modified version of the American Medical Association’s Physicians’ Current Procedural

Terminology.

Page 28 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix I 

Methodology for Determining Use of

Recommended Diabetes Services in

Fee-for-Service Medicare

to and follow up on recommended services. Nonetheless, these potential

biases are not great enough to invalidate our findings.

In interpreting our results, it should be noted that (1) service utilization

rates are not adjusted to reflect differences in the severity of diabetes or

the extent of comorbidities among cohort members; (2) physicians and

diabetes experts may disagree about optimal frequencies for some

monitoring services in some patients because research evidence may be

inconclusive and individual patients vary in age, comorbidities, and other

factors; and (3) performing monitoring services as recommended does not

ensure improved health outcomes. Some studies have shown, for example,

that increased frequency of glycohemoglobin testing has not been

associated with improved blood glucose values.

Table I.1: Diabetes Cohort

Demographic Characteristics Characteristic Number Percent

Total diabetes cohort 168,255 100.0

Age

Under 65 15,170 9.0

65-69 39,243 23.3

70-74 44,600 26.5

75-79 34,205 20.3

80-84 21,467 12.8

85 and older 13,570 8.1

Race

White 134,512 80.0

Black 21,272 12.6

Other 6,742 4.0

Unknown 5,729 3.4

Sex

Male 68,799 40.9

Female 99,456 59.1

Medicare eligibility category

Aged 152,200 90.5

Disabled 16,055 9.5

Page 29 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix I 

Methodology for Determining Use of

Recommended Diabetes Services in

Fee-for-Service Medicare

Table I.2: Overall Utilization Rates for

Recommended Services Service and frequency Number Percent

Physician visits, two or more per year 157,338 93.5

Eye exam, one or more per year 70,475 41.9

Glycohemoglobin

Two or more per year 35,074 20.9

One or more per year 63,980 38.0

Urinalysis, one or more per year 89,365 53.1

Serum cholesterol, one or more per year 117,326 69.7

Flu shot, one per fall seasona 74,214 44.1

aThe flu shot may be underreported in Medicare claims because people may obtain it in

nonmedical settings.

Table I.3: Utilization Rates for

Recommended Services, by Age

Group

Service and frequency All ages Under 65 65 to 74 75 and older

Physician visits, two or more per

year 93.5 90.1 93.3 94.6

Eye exam, one or more per year 41.9 27.9 42.5 44.2

Glycohemoglobin

Two or more per year 20.9 19.1 23.1 18.5

One or more per year 38.0 36.5 41.0 34.8

Urinalysis, one per year 53.1 49.5 52.5 54.6

Serum cholesterol, one per year 69.7 64.6 70.7 69.7

Flu shot, one per fall seasona 44.1 30.4 46.3 44.4

aThe flu shot may be underreported in Medicare claims because people may obtain it in

nonmedical settings

Page 30 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix I 

Methodology for Determining Use of

Recommended Diabetes Services in

Fee-for-Service Medicare

Table I.4: Utilization Rates for

Recommended Services, by Race Service and frequency Total White Black Other Unknown

Physician visits, two or more

per year 93.5 93.9 91.9 91.8 92.8

Eye exam, one or more per

year 41.9 43.1 36.1 37.2 41.4

Glycohemoglobin

Two or more per year 20.9 21.7 15.5 20.1 21.7

One or more per year 38.0 39.2 30.7 37.0 38.5

Urinalysis, one per year 53.1 53.3 52.0 53.5 52.7

Serum cholesterol, one per

year 69.7 70.7 64.2 69.3 68.9

Flu shot, one per fall seasona 44.1 47.1 28.0 35.8 43.6

aThe flu shot may be underreported in Medicare claims because people may obtain it in

nonmedical settings.

Table I.5: Utilization Rates for

Recommended Services, by Sex Service and frequency Total Male Female

Physician visits, two or more per year 93.5 92.0 94.5

Eye exam, one or more per year 41.9 39.5 43.6

Glycohemoglobin

Two or more per year 20.9 21.3 20.5

One or more per year 38.0 38.7 37.5

Urinalysis, one per year 53.1 53.0 53.2

Serum cholesterol, one per year 69.7 68.7 70.4

Flu shot, one per fall seasona 44.1 46.6 42.4

aThe flu shot may be underreported in Medicare claims because people may obtain it in

nonmedical settings.

Page 31 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix I 

Methodology for Determining Use of

Recommended Diabetes Services in

Fee-for-Service Medicare

Table I.6: Combined Utilization Rates

for Four Key Services, by Diabetes

Cohort Demographic Characteristics Characteristic

Percent

receiving none

Percent

receiving all

Total diabetes cohort 11.9 10.8

Age

Under 65 18.6 7.7

65-69 12.5 11.4

70-74 11.0 12.1

75-79 10.1 11.5

80-84 10.9 10.2

85 and older 12.3 6.9

Race

White 11.2 11.3

Black 15.5 7.7

Other 14.7 10.0

Unknown 12.3 10.4

Sex

Male 13.4 10.7

Female 10.9 10.8

Medicare eligibility category

Aged 11.2 11.7

Disabled 18.5 7.7

Note: The combined recommended service indicator includes each of the following services

annually: eye exam, one glycohemoglobin test, urinalysis, and serum cholesterol test.

Page 32 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix I 

Methodology for Determining Use of

Recommended Diabetes Services in

Fee-for-Service Medicare

Table I.7: Utilization Rates for Recommended Services, by State

Percent receiving recommended services

State

Number of

cohort

diabetics

Four key

services

Physician

visits

Eye

exam

Glycohemoglobin

(two) Urinalysis Cholesterol Flu shot

Alabama 3,595 5.5 92.4 32.4 12.7 56.4 64.8 43.8

Alaska 106 12.3 93.4 35.9 32.1 57.6 75.5 52.8

Arizona 1,531 16.0 91.9 41.6 28.4 56.7 80.5 51.8

Arkansas 2,014 7.1 92.8 46.5 10.9 50.8 54.5 51.3

California 10,806 12.3 94.4 43.3 21.3 56.3 74.2 36.9

Colorado 1,102 14.0 91.5 41.1 29.1 52.3 67.2 47.3

Connecticut 2,480 14.6 95.0 47.2 25.2 60.1 67.8 47.1

Delaware 548 10.8 94.2 45.8 18.4 44.0 68.8 44.5

District of

Columbia 474 13.3 93.9 43.0 19.8 51.9 76.6 28.7

Florida 10,872 17.5 95.4 52.3 25.1 63.8 81.0 46.3

Georgia 4,781 7.5 93.4 34.4 14.8 55.5 67.1 36.1

Hawaii 580 8.8 96.6 35.9 20.3 54.0 76.2 46.7

Idaho 512 11.1 91.4 35.9 29.3 51.0 72.9 56.8

Illinois 7,618 9.0 92.1 39.9 18.7 47.3 68.2 39.4

Indiana 4,205 6.8 93.8 37.8 17.8 43.5 62.0 50.5

Iowa 1,962 12.2 93.2 46.7 23.1 51.3 65.4 52.8

Kansas 1,604 12.7 92.0 48.4 28.0 53.2 69.3 50.3

Kentucky 2,969 6.7 93.9 35.4 14.1 51.9 65.6 43.1

Louisiana 3,421 7.3 92.5 43.6 11.3 53.1 67.1 33.7

Maine 977 12.8 93.2 46.4 24.3 46.5 70.7 51.9

Maryland 3,163 12.3 93.7 43.0 25.1 48.9 70.6 44.0

Massachusetts 4,283 14.8 95.0 53.1 27.6 54.3 68.0 27.3

Michigan 7,770 11.3 93.9 38.3 24.0 57.8 71.2 47.3

Minnesota 1,937 10.7 91.5 41.2 28.4 51.7 58.9 48.8

Mississippi 2,398 4.7 90.4 36.0 9.3 57.0 61.8 39.9

Missouri 3,848 9.6 94.3 39.0 23.7 48.8 65.4 45.5

Montana 448 8.5 90.2 45.1 15.4 51.1 62.1 54.0

Nebraska 1,015 10.5 91.3 53.9 18.4 49.1 61.6 55.9

Nevada 520 12.3 90.4 35.2 24.8 56.2 75.0 42.9

New Hampshire 730 9.9 93.7 45.9 26.9 46.7 65.8 43.6

New Jersey 6,087 12.3 93.8 43.1 24.5 48.0 78.0 41.2

New Mexico 699 10.6 89.7 36.5 22.6 49.6 65.4 29.8

New York 12,175 16.2 93.9 50.9 24.9 56.5 75.0 41.6

North Carolina 5,412 8.5 92.9 41.0 15.3 54.6 66.4 42.4

(continued)

Page 33 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix I 

Methodology for Determining Use of

Recommended Diabetes Services in

Fee-for-Service Medicare

Percent receiving recommended services

State

Number of

cohort

diabetics

Four key

services

Physician

visits

Eye

exam

Glycohemoglobin

(two) Urinalysis Cholesterol Flu shot

North Dakota 400 11.5 89.8 46.0 23.8 57.3 67.8 51.8

Ohio 9,455 8.2 94.7 40.3 17.2 49.4 66.6 49.8

Oklahoma 2,090 8.3 91.7 34.9 17.6 51.8 68.9 43.5

Oregon 1,243 10.8 92.5 32.9 27.5 49.6 76.5 53.3

Pennsylvania 11,794 7.9 95.6 37.7 22.1 46.1 69.4 49.1

Rhode Island 801 12.6 95.1 47.9 23.2 58.4 58.1 43.1

South Carolina 2,947 6.5 92.9 37.5 10.4 53.7 60.4 42.6

South Dakota 444 10.8 88.1 40.1 21.4 55.9 64.0 50.0

Tennessee 3,964 7.4 93.0 32.8 16.7 55.4 65.4 48.1

Texas 9,483 10.8 91.4 41.6 18.4 56.0 72.4 40.3

Utah 663 9.2 88.4 38.5 22.3 47.1 67.1 47.4

Vermont 374 8.3 94.1 35.3 24.1 40.6 59.9 42.8

Virginia 4,270 10.4 93.3 40.1 21.3 54.0 68.1 49.3

Washington 2,299 14.8 92.2 43.2 28.9 52.2 75.7 50.3

West Virginia 1,756 6.4 92.9 35.7 14.1 47.6 64.8 40.7

Wisconsin 3,445 9.6 93.4 38.0 27.0 48.9 64.4 52.6

Wyoming 185 7.0 89.2 36.8 18.4 41.6 67.0 40.5

United States 168,255 10.8 93.5 41.9 20.9 53.1 69.7 44.1

Note: The four key services in the combined recommended service indicator (at least one per

year) include eye exam, one glycohemoglobin test, urinalysis, and serum cholesterol test.

Page 34 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix II 

Methodology for Determining Use of

Diabetes Management Approaches by

Medicare HMOs

This appendix discusses our examination of diabetes management efforts

by Medicare HMOs. It briefly describes our methodology and the key

findings from our survey.

Methodology To better understand the approaches to diabetes management used by

HMOs, we conducted a telephone survey of nearly half of the current

Medicare risk-contract plans. We selected plans that had (1) enrollment of

at least 1,000 Medicare beneficiaries (as of April 1996) and (2) a contract

effective date no later than December 31, 1993. By using minimum

enrollment and participation date as selection criteria, we could eliminate

plans with so few Medicare enrollees that their population of enrollees

with diabetes might be too small to warrant special diabetes management

efforts and plans new to Medicare that might not be fully familiar with the

special needs of Medicare enrollees. Of the 201 Medicare risk-contract

HMOs operating in April 1996,26 90 plans met these criteria, and we

interviewed representatives of 88 of the plans (2 plans did not participate).

Data on plan characteristics were obtained from HCFA reports and officials

(see table II.1).

26HCFA, Monthly Report of Medicare Managed Care Plans (Washington, D.C.: Apr. 1996),

http://www.hcfa.gov/stats/monthly.htm (cited Apr. 12, 1996).

Page 35 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix II 

Methodology for Determining Use of

Diabetes Management Approaches by

Medicare HMOs

Table II.1: Characteristics of HMO

Plans in Our Survey

Descriptive variable

Number of

plans

Model type

Staff 13

Group 15

Independent practice association 60

Tax status

For profit 54

Not for profit 34

Medicare contract experience

Less than 5 years 28

5-10 years 45

More than 10 years 15

Medicare enrollment

10,000 or less 24

10,001-20,000 27

20,001-50,000 25

More than 50,000 12

Location

Northeast 17

Southeast 11

Midwest 9

Central 19

West Coast 32

The telephone survey, consisting of 23 multiple-choice and open-ended

questions, was designed to determine each HMO’s specific approaches to

diabetes management. The questions addressed interventions targeted to

plan enrollees and physicians, as well as plan-level activities, such as the

HMO’s ability to identify its enrollees with diabetes and monitor utilization

rates of recommended services. To administer the survey, we interviewed

the individual identified by the plan as being most familiar with plan

approaches to diabetes management. In most cases, the respondent was

the plan’s medical director; in other cases, it was a physician from the

plan’s endocrinology department or a representative of the plan’s wellness

or quality improvement department. We did not attempt to independently

verify the responses to our questions.

Page 36 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix II 

Methodology for Determining Use of

Diabetes Management Approaches by

Medicare HMOs

Survey Results The 88 HMOs reported a wide range of diabetes management efforts,

encompassing more than 30 different initiatives. Their efforts

predominantly focused on educating patients about self-management and

providers about recommended services. Many of the HMOs used similar

strategies for improving care. (See table II.2.)

Table II.2: HMO Responses to Selected

Survey Questions

Survey question

Number of

HMOs

responding

“yes”

Does your plan occasionally include information about diabetes in regular

newsletters mailed to all enrollees? 82

Does your plan provide (diabetes-related) information to physicians through

newsletters or mailings to physicians? 71

Does your plan have health professionals, such as diabetes educators,

nutritionists, or diabetes nurses, available for enrollee education? 68

Does your plan have any policies or procedures that are used to guide

physicians’ treatment of diabetic enrollees, such as guidelines, practice

parameters, or information briefs? 62

Does your plan maintain a list or registry of your enrollees with type II

diabetes? 61a

Does your plan use case managers to monitor the medical care that your

diabetic enrollees receive? 60

Has your plan set performance goals for diabetes care? 58

Does your plan mail educational newsletters or pamphlets about diabetes

care to your diabetics? 41

Does your plan operate any type of program designed to consolidate

services for diabetics? 31

Does your plan have a computer system that generates reminders for

physicians when specific patients are due for specific services? 24

Can you estimate about what proportion of all your Medicare enrollees have

type II diabetes? 20

aMany of the HMOs that responded “yes” to this question do not actively maintain or use their

registry information about enrollees with diabetes. Many plans explained that their registry is

updated annually as they identify their enrollees with diabetes for the Health Plan Employer Data

and Information Set.

In general, we did not find a strong association between the use of

particular approaches to diabetes management and specific HMO

characteristics, such as model type, tax status (for profit or not for profit),

or size. (See tables II.3 and II.4.) However, for-profit HMOs reported slightly

higher use of several diabetes management approaches than not-for-profit

HMOs. These included use of diabetes registries, mailings to enrollees with

Page 37 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix II 

Methodology for Determining Use of

Diabetes Management Approaches by

Medicare HMOs

diabetes, and employment of diabetes-related health professionals, such as

certified diabetes educators or nutritionists. Similarly, HMOs with the most

experience as Medicare contractors—either in Medicare enrollment or in

length of Medicare contract—were more likely to use certain diabetes

management approaches, such as clinical practice guidelines, mailings to

physicians and enrollees, and a diabetes registry.

Table II.3: Diabetes Interventions Reported by HMOs (Percent)

Descriptive variable

Clinical

practice

guidelines

Mailings to

enrollees with

diabetes

Allied health

professionalsa

Case

management

Mailings to

physicians

Diabetes

registry

Model type

Staff 92 46 85 77 69 69

Group 80 33 87 53 80 73

Independent practice

association 63 50 73 70 83 68

Tax status

For profit 82 56 83 69 94 78

Not for profit 53 32 68 68 59 56

Medicare contract experience

Less than 5 years 54 50 64 68 79 57

5-10 years 73 53 82 71 82 80

More than 10 years 93 20 87 60 80 60

Medicare enrollment

10,000 or less 46 38 75 67 71 54

10,001-20,000 70 48 82 82 78 70

20,001-50,000 84 44 76 52 84 72

More than 50,000 92 67 75 75 100 92

Location

Northeast 94 59 88 65 77 65

Southeast 55 27 36 82 46 36

Midwest 78 22 78 44 56 67

Central 74 47 79 79 95 79

West Coast 59 53 84 66 94 78

aSuch as certified diabetes educators or nutritionists.

Page 38 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix II 

Methodology for Determining Use of

Diabetes Management Approaches by

Medicare HMOs

Table II.4: HMOs Efforts to Monitor Recommended Services by Plan Characteristic (Percent)

Descriptive variable Eye exam Glycohemoglobin Urinalysis Cholesterol Flu shot Foot exams

Model type

Staff 55 46 55 46 46 36

Group 92 69 54 46 62 31

Independent practice

association 95 60 55 50 45 36

Tax status

For profit 87 59 56 54 49 41

Not for profit 89 59 52 41 48 26

Medicare contract experience

Less than 5 years 86 71 71 48 52 43

5-10 years 97 58 52 55 46 33

More than 10 years 67 42 33 33 50 25

Medicare enrollment

10,000 or less 86 50 50 43 43 36

10,001-20,000 91 67 67 67 57 38

20,001-50,000 91 52 38 33 38 29

More than 50,000 80 70 70 50 60 40

Location

Northeast 85 85 77 77 62 39

Southeast 50 25 50 50 50 25

Midwest 71 29 14 14 43 0

Central 93 64 50 43 43 50

West Coast 96 57 57 46 46 36

Page 39 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix III 

Comments From the Health Care Financing

Administration

Page 40 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix III 

Comments From the Health Care Financing

Administration

Page 41 GAO/HEHS-97-48 Medicare Diabetes Care
Appendix IV 

Major Contributors to This Report

Rosamond Katz, Assistant Director, (202) 512-7148

Ellen M. Smith, Evaluator-in-Charge

Jennifer Grover, Evaluator

Stan Stenersen, Evaluator

Evan Stoll, Programmer Analyst

(108255) Page 42 GAO/HEHS-97-48 Medicare Diabetes Care
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 6015

Gaithersburg, MD 20884-6015

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (301) 258-4066, or TDD (301) 413-0006.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100