Private Health Insurance: Coverage of Key Colorectal Cancer Screening Tests is Common but Not Universal
Released: 2004-07-19T00:00:00

Letter

Background

Surviving colorectal cancer is greatly enhanced when the disease is detected and treated early; however, only 38 percent of colorectal cancer cases are diagnosed at an early stage, according to ACS. To facilitate early diagnosis, ACS recommends regular colorectal cancer screening for certain individuals using at least one of four key tests: FOBT, flexible sigmoidoscopy, DCBE, and colonoscopy. These tests are used to find potential signs of colorectal cancer, including polyps—abnormal growths in a person’s colon—or blood in a person’s stool. FOBT is a laboratory test used to detect blood (that is otherwise not visible) in stool samples that are collected by patients at home. Using a flexible sigmoidoscopy, a physician can find and take samples of polyps in a patient’s lower colon and rectum. DCBE detects polyps by providing x-ray images of a patient’s entire rectum and colon. Finally, a colonoscopy allows a physician to find and take samples of polyps in a patient’s rectum and entire colon as well as remove most polyps found during the test.

ACS, medical providers, and others have developed medical guidelines that outline the frequency at which colorectal cancer screening tests should be administered depending on an individual’s age and risk for developing the disease. For example, ACS guidelines recommend that, beginning at age 50, all average-risk individuals be screened annually using an FOBT; every 5 years using a flexible sigmoidoscopy or DCBE; or every 10 years using a colonoscopy. ACS guidelines also state that a combination of both FOBT and flexible sigmoidoscopy at the intervals indicated is the preferred screening method over either test alone, and that individuals at high or increased risk for developing the disease should be screened more frequently. Furthermore, ACS believes that patients and providers should jointly choose the appropriate tests and testing strategy based on patient risk factors and the varying accuracy, cost, and discomfort of the tests, among other factors. ACS’s colorectal cancer screening guidelines are also similar to those endorsed by the American Gastroenterological Association and the American Medical Association. The Medicare program covers all four screening tests following guidelines similar to those developed by ACS. The United States Preventive Services Task Force (USPSTF) also strongly recommends that clinicians screen men and women 50 years of age or older for colorectal cancer. However, it specifies the frequency with which tests should be administered only for FOBT, for which annual testing is suggested. Similar to ACS, USPSTF recommends that the choice of tests and testing strategy be based on a variety of factors including patient preferences and medical contraindications.

Fewer than half of individuals age 50 and over surveyed in a 2002 national study reported receiving a colorectal cancer test for screening or diagnostic purposes. FOBT was used by approximately 45 percent of respondents age 50 and over, with less than half of these respondents having had their last test within the past year. The survey also found that a sigmoidoscopy or colonoscopy test was used by just under 50 percent of respondents age 50 and over at some point in their lives. Reasons that individuals do not obtain a colorectal cancer screening test may include a lack of patient education, a general reluctance to be tested, or a physician’s lack of time to discuss or educate patients about screening.

Private health insurance is offered in two primary markets—the group and individual markets. The group market includes health plans offered by employers to employees. An employer may provide coverage for its employees either by purchasing the coverage from a health insurer (fully insured coverage) or by funding its own health plan (self-funded coverage). Within the group market, small employers typically purchase coverage from insurers, while larger employers are more likely to self-fund their coverage. Although the federal government is a large employer— with over 2.7 million employees in 2002—it provides health coverage for its employees through health insurance carriers that participate in FEHBP. About 161 million individuals received health coverage from the group market in 2002. The individual market includes health plans sold by insurers to individuals who do not receive coverage through an employer. About 16.8 million Americans received health coverage from the individual market in 2002.

Private health plans are subject to various state and federal requirements, depending upon the market segments in which they are offered and the manner in which the plans are funded. The fully insured health coverage offered by small employers is subject to state insurance requirements, which can include mandated coverage for preventive health services and other benefits. Individual market coverage purchased by individuals from insurers is also subject to state insurance requirements. The self-funded coverage typically offered by larger employers is generally not subject to state insurance regulation, but only to federal requirements, none of which are related to preventive health services.

OPM is responsible for regulating, and contracting with, private health insurers to offer health benefit plans to federal employees, pursuant to the Federal Employees Health Benefits Act. While private health insurers are generally subject to the applicable laws in their respective states, by federal law, the terms of any FEHBP contract negotiated by OPM, which relate to coverage or benefits, preempt any inconsistent state or local law or regulation. To assure a consistent set of benefits among the national plans, OPM routinely preempts state regulation, but generally does not do so for the local plans, according to an OPM official.

Twenty States Had Laws That Require Private Health Insurance Plans to Cover Colorectal Cancer Screening Tests

Twenty states had laws requiring private health insurance plans to cover colorectal cancer screening tests as of May 2004. In 19 of these states, the laws generally applied to group or individual health plans, and required coverage of all four tests—FOBT, flexible sigmoidoscopy, DCBE, and colonoscopy—typically consistent with ACS guidelines. However, the law in Wyoming had limitations. It was more limited in scope, applying to group and managed care plans and not explicitly requiring coverage of each of the four screening tests according to ACS guidelines. Table 1 shows the scope of state laws and appendix II provides a detailed summary of each of the 20 state laws.

Majority of Health Plans Reviewed Covered the Four Colorectal Cancer Screening Tests

The majority of health insurance plans we reviewed provided coverage for the four key colorectal cancer screening tests. These included health plans that were sold to small employers and individuals in states without laws requiring colorectal cancer screening coverage, were offered by large employers across the United States, and were offered to federal employees through FEHBP. Among plans that covered fewer than four of the tests, DCBE and colonoscopy were least likely to be covered.

In States Without Colorectal Cancer Screening Test Laws, Most of the Small Employer and Individual Plans Reviewed Provided Coverage for All Four Tests

In 10 states without laws requiring private health insurance coverage of colorectal cancer screening tests, most of the small employer plans we reviewed—16 of 19—covered all four colorectal cancer screening tests. The remaining 3 plans covered FOBT or FOBT and flexible sigmoidoscopy, but not DCBE or colonoscopy. Among the 14 individual plans we reviewed, 10 covered all four colorectal cancer tests for screening purposes. The remaining 4 plans did not offer screening coverage for any of the tests. (See table 2.)

Most Large Employer Plans Reviewed Covered All Four Colorectal Cancer Screening Tests

Twenty-four of the 35 large employer plans we reviewed, or approximately two-thirds of these plans, covered all four colorectal cancer tests for screening purposes. Seven of the 35 plans covered only one of the colorectal cancer screening tests: FOBT or flexible sigmoidoscopy. Neither DCBE nor colonoscopy was covered by any of the large employer plans that provided limited test coverage. Four of the health plans offered by the large employers did not cover any of the colorectal cancer tests for screening purposes. (See table 3.)

Over Half of FEHBP Plans Covered All Four Colorectal Cancer Screening Tests

Seventy-seven of the 143 FEHBP plans covered all four screening tests for colorectal cancer in 2004. Among the 17 national FEHBP plans, 12 covered all four tests, and 5 covered FOBT, flexible sigmoidoscopy, and colonoscopy, but not DCBE. (See table 4.) About 70 percent of the over 8 million FEHBP enrollees and their dependents were covered through the national plans in 2003.

Among the 126 local FEHBP plans, 65 plans either provided coverage for the four colorectal cancer screening tests as confirmed through a review of their brochures or follow-up with selected plan officials, or were located in states that required this coverage. The brochures for the remaining 61 plans indicated coverage of at least FOBT and flexible sigmoidoscopy, but did not explicitly identify whether the additional tests were covered for screening purposes. According to an OPM official, plans may cover tests that are not explicitly referenced in the brochures. We contacted 8 local plans and confirmed that brochure language was not definitive. According to the plan representatives, each of the 8 plans covered at least one test in addition to the two specified in the brochure.

External Comments and Our Evaluation

Representatives of ACS and AHIP provided comments on a draft of this report. ACS commented that the report overstates coverage, for example by stating that coverage is common or by not placing greater emphasis on plans that covered few or none of the colorectal cancer tests for screening purposes. In contrast, AHIP commented that the report overstates the lack of coverage, for example by highlighting the number of plans that covered fewer than four tests rather than the number of plans that covered at least one test. Recognizing that our findings are subject to varying interpretations, we attempted to report them neutrally and to not overly emphasize the coverage that did or did not exist. ACS and AHIP also commented on the scope of our report and limitations to our study methods, as discussed below, and provided technical comments, which we incorporated as appropriate.

ACS Comments

ACS suggested that we did not sufficiently address several methodological limitations in our report. In particular, ACS stated that we used small samples, did not conduct an analysis of nonrespondents, surveyed only the health plans with the most members where insurers or employers offered more than one plan, and did not independently verify the responses of the insurers and employers we contacted. We agree that our study methods are subject to limitations, which we disclosed in our draft report. We reviewed samples of health plans that would provide credible evidence of coverage levels in each market segment, recognizing that the results would not be generalizable to all health plans. While we believe our relatively high response rates of between 71 and 95 percent diminished the need for a detailed analysis of nonrespondents, we acknowledged the possibility of selection bias in the draft report. Similarly, although we did not examine every plan offered by each insurer and employer, we focused on those plans that covered the greatest number of enrollees to best illustrate the coverage most widely available to consumers. In terms of verifying survey responses, we did not have ready access to the documents that could have provided verification of employer and insurer responses to our questions. Insurer underwriting manuals may provide such verification, but are considered proprietary by insurers and not shared externally. Documents readily available to us, such as plan brochures, do not indicate coverage of every medical test or procedure under every possible circumstance, and thus could not be used to verify insurer or employer responses to our questions. Our draft report noted that we did not independently verify reported responses. In response to ACS’s comments that we did not sufficiently address our study limitations, we modified the final report to more prominently highlight certain limitations of our methodology.

ACS further commented that we did not highlight the differences between the higher coverage rates we found based on the self-reported data provided by employers and insurers and the lower coverage rates we found based on our review of FEHBP brochures, suggesting that the differences indicate the potential for self-reported data to overstate plan coverage. As the draft report noted, we found that FEHBP brochures did not specify every medical test or procedure covered under every circumstance and thus the brochures may understate coverage actually available. This fact was confirmed by several plan and OPM officials and is consistent with our own previous reviews of health plan brochures. Among the 17 national plans, for which we were able to follow up with plan officials in each instance where the brochure language was not exhaustive, most covered tests not mentioned in their brochures. Moreover, through our follow-up with eight local plans we determined that each plan covered at least one test in addition to those listed in their brochures.

ACS also commented that we did not assess the quality of prior studies of colorectal cancer screening coverage rates and consider the study results in our report. While our draft report acknowledged that prior studies have been conducted, we did not elaborate on them because, as ACS noted, each was subject to certain limitations. Evaluating the quality of prior studies was beyond the scope of our work.

AHIP Comments

AHIP commented that the draft report did not sufficiently address the low rate at which Americans actually receive colorectal cancer screening tests in spite of relatively high coverage rates among health plans, suggesting that factors other than insurance coverage are responsible for the low screening rate. The draft report’s background section noted colorectal cancer screening rates and certain factors cited by other researchers that influence these rates. However, an assessment of the factors influencing screening utilization rates, beyond the extent of health insurance coverage, was outside the scope of this report.

AHIP also suggested that the report include a discussion of the factors that drive the benefit package decisions made by employers and consumers in selecting health plans, noting that such decisions are necessarily influenced by cost, individual circumstances, and other factors. We agree that many factors influence the choice of benefits consumers or employers select when choices are available, but examining these factors was beyond the scope of this study.

AHIP further commented that we emphasized the ACS colorectal cancer screening guidelines, but not those set forth by USPSTF, which they suggested are also highly regarded. We used the ACS guidelines as a complete framework for presenting our findings because the guidelines indicate a frequency for each test. While USPSTF guidelines include the four tests specified by ACS, they only indicate the frequency with which the tests should be administered for FOBT. Nevertheless, we modified the report to add reference to the USPSTF guidelines.

As agreed with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days after its issue date. At that time, we will send copies to interested congressional committees and members and make copies available to others upon request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov.

Please contact me at (202) 512-7118 or Randy DiRosa at (312) 220-7671 if you or your staff have any questions. Key contributors to this report are listed in appendix III.

Appendix I: Scope and Methodology

To examine the extent to which the four key colorectal cancer tests are covered for screening purposes by private health insurance plans, we reviewed the extent to which state laws require such coverage, and we reviewed the extent of coverage among selected small employer and individual plans in states without such laws, a sample of large employer plans, and coverage within FEHBP plans. We conducted our work from October 2003 through June 2004 according to generally accepted government auditing standards.

State Laws Requiring Colorectal Cancer Screening Test Coverage

To identify states that had laws that require private health insurance plans to cover colorectal cancer screening tests, we reviewed the laws in each state as of May 2004, and consulted with state officials to clarify the laws as necessary. We did not include state regulations or policies applicable to insurance plans in our review.

Small Employer and Individual Health Plans

To examine coverage of colorectal cancer screening tests in small employer and individual health plans, we identified the largest health insurers in 10 of the states without existing or pending colorectal cancer screening laws by using information compiled by CDC, the National Association of Insurance Commissioners, Blue Cross and Blue Shield Association, and the National Conference of State Legislatures. This assessment was completed in November 2003. We selected five states based on their large population—Florida, Massachusetts, Michigan, New York, and Wisconsin—and randomly chose five additional states— Arizona, Arkansas, Colorado, Louisiana, and Maine. To identify the largest health insurers in these states, we contacted insurance regulators in each state and asked them to identify the two largest small employer health insurers and the two largest individual health insurers in terms of covered lives, premiums collected, or—in the absence of quantitative data—their best judgment.

We contacted the insurers identified to obtain information about the extent to which their health plan with the most members covered colorectal cancer screening tests. We posed a series of questions related to insurers’ coverage of four colorectal cancer tests—FOBT, flexible sigmoidoscopy, DCBE, and colonoscopy—for screening purposes.Further, we asked insurers about their health plans’ coverage restrictions, including those related to age, frequency, family history, personal history, and plan authorization. We received responses to our questions from 18 of the 19 small employer insurers we contacted (95 percent), and 14 of the 17 individual insurers we contacted (82 percent).

Large Employer Health Plans

To examine coverage of colorectal cancer screening tests in large employer health plans, we randomly selected 50 companies from the 2002 Fortune 500 list.One company was subsequently removed from the sample because it filed for bankruptcy protection after the list was published and no longer had any U.S. employees. Thus, the final sample included 49 companies. We contacted health plan benefits administrators or human resources staff in each of these companies. We made at least three attempts to obtain a response from each company in our sample, including contacting the company’s government affairs or chief executive office to request participation in certain instances. Similar to insurers offering small employer and individual health plans, participating employers answered questions related to their largest plan’s coverage of the four key colorectal cancer tests for screening purposes and restrictions related to this screening test coverage. We received responses from 35, or 71 percent, of the companies we contacted.

Three plans offered by large employers reported covering one or more of the four colorectal cancer tests for screening purposes, but also required that a member have a family or personal history of the disease in order to receive coverage for the screening test. Because these requirements were inconsistent with our definition of screening test coverage, we characterized these plans as not covering the relevant tests for screening purposes.

FEHBP Plans

To identify coverage policies of health plans offered through FEHBP, we reviewed 2004 coverage brochures maintained on the OPM website. When a plan offered multiple benefit options, we counted each option as a separate plan. When the same plan was offered in multiple locations but with the same benefits, we counted it as one plan. Our review of 2004 FEHBP brochures identified 143 distinct benefit plans. We identified the extent to which each of the four tests was explicitly listed as a covered benefit for screening purposes for each plan. We then discussed our interpretation of the brochure language with OPM representatives. In addition, we contacted representatives of each of the 5 national plans and 8 of the 61 local plans whose brochures did not explicitly indicate the coverage of each of the four tests. The local plans were selected judgmentally from different geographic areas of the country. We discussed with plan officials our interpretation of their brochure language, and revised our analysis based on these discussions.

Limitations

We relied on self-reported information from officials of the health plans offered to small employers, individuals, and large employers, and did not independently verify their responses. Further, although we achieved relatively high response rates of between 71 and 95 percent for our review of coverage in the small employer, individual, and large employer market segments, we may nonetheless have encountered selection bias. That is, insurers and large employers with more colorectal cancer screening benefits could have been more likely to participate in our survey than those with fewer colorectal cancer screening test benefits. In addition, we surveyed a small number of small employer, individual, and large employer health plans, precluding our ability to generalize the findings beyond these health plans. Nevertheless, our findings illustrate the colorectal cancer screening test benefits of approximately 4 million individuals covered under the small employer, individual, and large employer plans we reviewed, and more than 8 million individuals covered under FEHBP.

Appendix II: State Laws Requiring Private Health Insurance Coverage of Colorectal Cancer Screening Tests

Table 5 shows state colorectal cancer screening laws in place as of May 2004. As indicated, 20 states have laws that require private insurance coverage of colorectal cancer screening tests.

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact

Acknowledgments

Susan Anthony, Christine DeMars, Iola D’Souza, Sari B. Shuman, and Behn M. Kelly made key contributions to this report.

Related GAO Products

Private Health Insurance: Federal and State Requirements Affecting Coverage Offered by Small Businesses. GAO-03-1133. Washington, D.C.: September 30, 2003.

Medicare: Most Beneficiaries Receive Some but Not All Recommended Preventive Services. GAO-03-958. Washington, D.C.: September 8, 2003.

Medicare: Use of Preventive Services is Growing but Varies Widely. GAO-02-777T. Washington, D.C.: May 23, 2002.

Medicare: Beneficiary Use of Clinical Preventive Services. GAO-02-422. Washington, D.C.: April 12, 2002.

Medicare: Few Beneficiaries Use Colorectal Cancer Screening and Diagnostic Services. GAO/T-HEHS-00-68. Washington, D.C.: March 6, 2000.