Managing Diabetes: Health Plan Coverage of Services and Supplies
Released: 2005-03-28T00:00:00

Letter

Background

Diabetes, a chronic disease, was the sixth leading cause of death in the United States in 2000, contributing to the loss of more than 200,000 lives, according to CDC. Type 1 diabetes, in which the body fails to produce insulin, is usually diagnosed in children and young adults. Type 2 diabetes, in which the body fails to use insulin properly, is associated with aging, a family history of diabetes, physical inactivity, and obesity and accounts for 90 to 95 percent of all diabetes cases. Although type 2 diabetes occurs most often among adults, it is increasingly being diagnosed in children and adolescents. One study found that, on average in 2002, individuals with diabetes incurred about $13,243 in health care expenditures, compared with about $2,560 in expenditures for individuals without diabetes. These estimates include costs attributed to complications of diabetes, such as cardiovascular disease, neurological symptoms, and kidney disease.

Federal health agencies and national organizations concerned with diabetes patient care have identified a number of services and supplies that individuals with diabetes often need to help manage their disease. Table 1 lists services considered important for diabetes patient care by the American Association of Diabetes Educators; the American Dietetic Association; and the National Diabetes Quality Improvement Alliance (Alliance), a consortium of 13 private-sector organizations and government agencies, including the American Diabetes Association (ADA), CDC, and the Centers for Medicare & Medicaid Services.

In addition to such services, according to federal agencies and organizations concerned with diabetes patient care, individuals with diabetes often need certain supplies to manage their disease. Needed supplies may include blood glucose monitors, glucose control solutions (used to check the accuracy of testing equipment and test strips), test strips, lancets and lancet devices (used to prick the skin for a blood sample to self-test blood glucose levels), insulin (when necessary), insulin pumps (to administer insulin), disposable needles and syringes (also to administer insulin), alcohol swabs, and therapeutic shoes (for individuals with severe diabetic foot disease).

Health coverage may be provided through the purchase of insurance policies that are subject to state laws and regulations or through means other than insurance. Health coverage provided through the purchase of insurance in a given state, whether purchased by individuals or by employers, is subject to insurance requirements in that state, including requirements to cover specified illnesses, services, or supplies. For example, states often require coverage of cancer-screening services such as mammography or tests for colorectal cancer. These state requirements are in addition to coverage requirements established by federal law. In 2001, two-thirds of Americans younger than 65 (the age at which people generally become eligible for Medicare), received health coverage through their own employer or that of a family member. Large private employers often self-fund their health plans, and coverage provided by these plans is not subject to state insurance regulation, although it is generally subject to federal requirements. Health coverage provided by the federal government is also not subject to state insurance regulation. For FEHBP, OPM is responsible for contracting with private health insurance carriers to offer health benefit plans to federal employees. By federal law, the terms of any FEHBP contract negotiated by OPM that relate to coverage or benefits preempt any inconsistent state or local law or regulation. OPM routinely preempts state requirements to ensure a consistent set of benefits among nationwide FEHBP plans, according to an OPM official.

Most States Require Insurance Policies to Cover Diabetes Services and Supplies, Although Specific Requirements Vary

In 2004, 47 states had laws or regulations related to coverage of diabetes services or supplies, although specific requirements varied by state (see fig. 1 and app. II). Forty-five states required insurance policies to cover specific services or supplies for diabetes. Two more states, Mississippi and Missouri, required “mandated offerings”; that is, these states required insurance policies to provide coverage for diabetes at the option of purchasers. Some states’ requirements applied only in narrow circumstances. For example, Arizona and Wisconsin required coverage of diabetes supplies only when a health insurance policy covered the treatment of diabetes. The services most frequently specified in state requirements were diabetes education and medical nutrition therapy: 45 states required that insurance policies cover diabetes education, and 27 states required coverage of medical nutrition therapy. State requirements may have focused more often on these two services in part because national organizations concerned with diabetes patient care—including ADA, the American Dietetic Association, and the American Association of Diabetes Educators—have supported “model” legislation centered on these two services. According to ADA and the American Dietetic Association, the organizations focused on these two services in particular because others, such as eye and foot exams, were thought to be covered by most policies as general medical services. The model legislation also includes coverage of “diabetes equipment and supplies,” and 47 states required such coverage. Twenty-eight states identified which supplies must be covered, although their specific requirements varied.

Some states had specific requirements regarding the coverage of certain services, such as diabetes education. Forty-two states specified at least some criteria for the training or education that health care professionals must have to provide diabetes education. These criteria varied widely from state to state. To provide diabetes education in Louisiana, for example, health professionals must have demonstrated expertise in diabetes and must have completed an educational program in compliance with the National Standards for Diabetes Self-Management Education established by ADA. In contrast, several states required educators to be licensed professionals with expertise in diabetes but did not define the term expertise. Eight states referred to ADA’s national standards in setting their requirements for diabetes education programs. Some of these states required programs to be consistent with these standards, while others mentioned them as an example of acceptable standards.

Among the 47 states whose laws or regulations required coverage of diabetes supplies, specific coverage requirements varied. For example, 19 states did not specify which supplies must be covered; instead, these states typically required coverage of all medically necessary equipment and supplies prescribed by a physician. The remaining 28 states specified covered supplies, either in laws or regulations, but the number of supplies varied among the states. For example, Michigan had requirements related to insulin, blood glucose monitors, test strips, lancets, lancet devices, syringes, and insulin pumps. In contrast, Mississippi required coverage of equipment and supplies, including supplies used in connection with blood glucose monitoring and insulin administration, but did not specify which supplies. Some states that listed covered supplies also prescribed procedures for adding new supplies to the list. For example, in New Jersey, the Commissioner for Insurance, in consultation with the Commissioner of Health, may update the list of supplies.

While nearly all states have required some coverage of diabetes services or supplies in the insurance policies they regulate, some states have authorized a class of health insurance policies that are not bound by many of the state coverage requirements, which may include those for coverage of diabetes services and supplies. Known as “flexible health benefit” or “limited-benefit” policies, and typically marketed to small employers or individuals, such policies may, through lower premiums, reduce the cost of coverage. At least two states, Louisiana and Arkansas, have authorized limited-benefit policies that are not bound by requirements related to diabetes services and supplies. Louisiana has authorized such policies for individuals not otherwise able to obtain health coverage and for small employers (3–35 employees), and Arkansas has authorized them for all groups, regardless of size. ADA is concerned that limited-benefit policies may not provide sufficient coverage of the services and supplies that individuals with diabetes need to manage their condition.

Selected Health Plans Providing Coverage Not Subject to State Regulation Cover Most but Not All Diabetes Services and Supplies

The 3 largest plans participating in FEHBP—Blue Cross and Blue Shield, Mail Handlers, and Government Employees Hospital Association, Inc.— and the 13 large-employer self-funded plans we contacted covered most of the diabetes services and supplies we reviewed. All 16 plans covered at least 7 of the 10 diabetes services, as well as at least five of nine diabetes supplies. Few of the plans we contacted placed limits on coverage for diabetes services and supplies.

Three Largest FEHBP Plans Cover Most Diabetes Services and Supplies

The three largest FEHBP plans covered at least 8 of the 10 diabetes services we reviewed (see table 2). Both diabetes education and medical nutrition therapy were covered by two of the three plans, although one plan placed conditions on these services: diabetes education was covered when provided at a hospital and medical nutrition therapy when provided by a physician. The three plans stated that coverage requirements for diabetes services and supplies applied only in cases of medical necessity. The plans generally did not, however, set monetary limits on their coverage for diabetes services. One exception was smoking cessation therapy, for which one plan set $100 lifetime limits per enrollee for both counseling and drug therapy. Another plan set $100 lifetime limits per enrollee for smoking cessation counseling.

The three FEHBP plans all covered at least seven of nine diabetes supplies, including blood glucose monitors, glucose control solutions, test strips, lancets and lancet devices, insulin, insulin pumps, and disposable needles and syringes. One plan did not cover alcohol swabs, and two plans did not cover therapeutic shoes. One plan limited its coverage of supplies; specifically, this plan set lifetime durable medical equipment limits of $10,000 per person for specific supplies, including blood glucose monitors and insulin pumps.

Large Employers’ Self- Funded Health Plans Reviewed Cover Most Diabetes Services and Supplies

Each of the 13 large employers’ self-funded health plans we reviewed covered at least 7 of 10 diabetes services, specifically, blood glucose, lipid, and urine tests; eye and foot exams; blood pressure management, and influenza vaccinations. The remaining 3 services were covered by at least 9 plans (see fig. 2). Among these plans, we found limits on coverage only for smoking cessation therapy. One plan, for example, had a lifetime maximum of three drug therapy treatments for smoking cessation, and another plan had a maximum of two smoking-cessation programs per lifetime for each enrollee for both counseling and drug therapy.

In a few cases, the plans specified certain conditions for coverage. For example, among the 11 plans offering coverage of diabetes education, 4 did so only if an employee with diabetes was enrolled in the plan’s diabetes management program. Three of the 10 plans offering coverage of medical nutrition therapy did so only as part of their diabetes management program. Of the 9 plans covering smoking cessation therapy, 5 restricted coverage to drug therapy and did not cover smoking cessation counseling. Most of the self-funded plans stipulated that diabetes services and supplies were covered only when medically necessary. In addition, 7 plans required waiting periods ranging from 30 days to 6 months after an employee was hired before health coverage began. One plan did not cover preexisting conditions—either an injury or illness—occurring during the 90 days before a newly hired employee began the waiting period.

All 13 self-funded plans covered at least five of nine diabetes supplies, including insulin, insulin pumps, disposable needles and syringes, test strips, and lancets and lancet devices, and all but 1 covered blood glucose monitors (see fig. 3). Only 1 of the 13 plans reported having limits on the quantity of supplies covered, covering one blood glucose monitor per year. Two of the 13 plans reported placing conditions on their coverage of supplies. For example, 1 plan told us that it allowed up to a 90-day supply of items for each claim, and another plan covered therapeutic shoes when prescribed by a physician and purchased through an authorized supplier.

Nationwide, Receipt of Diabetes Services and Control of Related Health Conditions Are Uneven

Data from CDC’s 2003 nationwide survey showed that individuals with diabetes received some but not all diabetes services, and those who had health coverage were more likely to have received services than those who did not. The proportion of individuals with diabetes receiving diabetes services varied widely by type of service and among states. Another CDC survey, which included a physical examination of participants, indicated that many individuals with diabetes did not have their diabetes-related conditions adequately controlled.

Individuals with Diabetes Report Receiving Many but Not All Services

National data show that individuals with diabetes ages 18 and older receive many but not all diabetes services. In a nationwide telephone survey conducted in 2003, the majority of individuals with diabetes reported receiving at least one of six identified diabetes services for which national data were available. Substantially fewer individuals reported receiving within the past 12 months the five services recommended that individuals with diabetes receive at least once a year. Although the receipt of services varied by service, half or more of the individuals with diabetes reported receiving each given service. For example, an estimated 88 percent had received a test for blood glucose within the past 12 months, and an estimated 52 percent had received diabetes education. A much smaller proportion, 33 percent, had received the five services recommended that individuals with diabetes receive at least once a year— specifically, a blood glucose test, a cholesterol test, an eye exam, a foot exam, and an influenza vaccination (see fig. 4).

CDC’s survey also indicated that an estimated 82 percent of individuals with diabetes were taking insulin or diabetes medication to control their blood glucose. Otherwise, use of diabetes supplies was not captured in CDC’s survey.

Individuals with Diabetes Who Have Health Coverage More Likely to Receive Services Than Those Who Lack Coverage

According to CDC’s 2003 survey, in comparison with individuals with diabetes who lacked health coverage, a larger proportion who had health coverage reported receiving one or more services. For example, an estimated 90 percent of individuals with diabetes who had health coverage at the time of the survey had received a blood glucose test, compared with 71 percent of those who reported not having such coverage (see fig. 5). Moreover, the estimated proportion of individuals with diabetes who received all of the five diabetes services was more than twice as high for those who had coverage than for those who did not. For example, although an estimated 35 percent of those with health coverage had received a blood glucose test, a cholesterol test, eye exam, foot exam, and influenza vaccination, just 14 percent of those without health coverage received the same set of services.

Receipt of Diabetes Services Varies Widely among States

CDC’s 2003 survey showed substantial variation among states in the receipt of diabetes services. Depending on the service, the estimated state- by-state percentages of individuals with diabetes who reported receiving services varied widely. For example, the estimated state-by-state percentages of individuals with diabetes who reported receiving an eye exam ranged from 55 to 84 percent (see table 3). Despite this state-by-state variation, the same services were generally the most received across all states. In most states, for example, more individuals received blood glucose and cholesterol tests than received foot exams or diabetes education.

Many Individuals with Diabetes Do Not Have Adequate Control of Related Conditions That May Increase Their Risk of Complications

For 1999–2002, data from CDC’s NHANES—a nationally representative survey that involves a physical examination to assess each participant’s health—indicated that many individuals with diabetes ages 18 and older did not have adequate control of related conditions that could lead to health complications. Experts say that controlling blood glucose and cholesterol levels lowers the risk of nerve damage, vision disorders, and cardiovascular disease; detecting renal disease early decreases the risk of kidney failure. Yet data from CDC’s NHANES showed that about 19 percent of examined participants with diabetes had poor control of their blood glucose, and about half of them had cholesterol levels putting them at increased risk for cardiovascular disease. In addition, about 40 percent were at increased risk of renal disease, as evidenced by a positive test for abnormal levels of a protein in their urine. The data also showed that about 38 percent of individuals with diabetes who did not have health coverage had glucose levels indicative of poor control, compared with about 16 percent of those who had health coverage.

Agency Comments

We provided a draft of this report to CDC for comment. The agency provided us with technical comments, which we incorporated into the report as appropriate.

As agreed with your offices, 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.

If you or your staffs have any questions about this report, please contact me at (202) 512-7118. Another contact and key contributors to this report are listed in appendix III.

Appendix I: Scope and Methodology

To assess health care coverage and receipt of diabetes services and supplies, we obtained information from federal health agencies and national organizations concerned with diabetes patient care and identified 10 services and nine supplies that individuals with diabetes often need. To determine the extent to which states require coverage of diabetes services and supplies for the health insurance policies they regulate, we examined state laws and regulations from September 2004 through December 2004 related to diabetes and the extent to which they required coverage of specific services and supplies. We also reviewed information prepared by the American Diabetes Association (ADA) and the American Dietetic Association and interviewed officials there, as well as from states and the National Conference of State Legislatures. In addition, we reviewed state requirements for limited-benefit policies—which are not required to comply with coverage requirements usually applicable to health insurance—in Louisiana, Arkansas, and Colorado.

To examine the extent to which the largest plans participating in the Federal Employees Health Benefits Program (FEHBP) and the largest self- funded employer plans cover diabetes services and supplies, we obtained information from the three largest national FEHBP plans—Blue Cross and Blue Shield, Mail Handlers, and Government Employees Hospital Association, Inc.—which together covered approximately 5.3 million people in 2003, or about 65 percent of employees, retirees, and their dependents covered by FEHBP plans. We also contacted a random sample of 15 of the 50 largest Fortune 500 companies, ranked by the number of employees, regarding their plans’ coverage of diabetes services and supplies in 2004 and received responses from 13 of them. Together these 13 large companies, which had self-funded health plans, employed about 2.4 million people in 2003. Because employers may offer their employees more than one health plan option, we asked employers to provide coverage information related to the health plan that had the largest enrollment. We relied on the information as reported by officials of the health plans reviewed and did not independently verify their responses. Because of our sampling approach, we cannot generalize our findings to all FEHBP plans or to all large employers. Although we received responses from most (16 of 18) of the FEHBP plans and employers we contacted, our results may still reflect some selection bias, in that employers offering more benefits might have been more likely to respond than those offering fewer benefits.

To assess information on the extent to which individuals with diabetes receive diabetes services and use supplies, we analyzed data for individuals ages 18 and older provided by the Centers for Disease Control and Prevention (CDC) from two nationwide surveys: the Behavioral Risk Factor Surveillance System (BRFSS) for 2003 and the National Health and Nutrition Examination Survey (NHANES) for 1999–2002: BRFSS is a nationwide telephone survey conducted every year by state health departments, with technical and methodological assistance provided by CDC. A “cross-sectional” or point-in-time survey, BRFSS samples the civilian noninstitutionalized population of adults ages 18 and older in the United States, including the 50 states and the District of Columbia; all data from BRFSS are self-reported. The survey’s purpose, methods, and data analyses are available at http://www.cdc.gov/brfss. We used data from CDC gathered during 2003 about services individuals with diabetes reported receiving within the 12 months preceding the survey, which represented the most recent information available. BRFSS 2003 included a representative sample of 19,162 participants with diabetes. In addition to questions from the core sections of the survey, we used questions from a diabetes-specific section, which included data from 46 states in 2003, to collect data on disease management practices from respondents with diabetes.

NHANES is a nationally representative survey, whose data are collected every year and released every 2 years by CDC, that samples the civilian noninstitutionalized U.S. population. It is a two-part survey, consisting of an in-home interview plus a health examination in a mobile examination center. Its purpose, methods, and data analyses are available at http://www.cdc.gov/nchs/nhanes.htm. We used NHANES data from 1999–2002—the most recent information available—for adults ages 18 and older, which included a representative sample of 904 participants with diabetes. We relied on NHANES results from the physical examinations, which included laboratory tests, for specific test values for individuals who had reported a prior diagnosis of diabetes, including tests for blood glucose, cholesterol, and kidney disease.

We examined data provided to us by CDC from each survey separately. When possible, the data were stratified by health coverage status (respondents who reported having health coverage and those who reported not having it). For both surveys, we used data only from respondents who reported receiving a diagnosis of diabetes before the survey period. Most of CDC’s estimates from BRFSS were stratified by state, although we could not develop state-level estimates by health coverage; NHANES estimates were limited to the national level. We analyzed a total of 10 indicators for diabetes services and supplies from both surveys (see table 4).

We assessed the reliability of the NHANES and BRFSS data provided by CDC by (1) reviewing existing information about the data and the methods used to collect them and (2) interviewing and working with agency officials knowledgeable about the data. We determined that the data were sufficiently reliable for the purposes of this report. Our review had several data limitations. First, BRFSS data were self-reported for each service we reviewed, and both BRFSS and NHANES used self-reported diagnoses of diabetes from participants, a practice that can result in recall bias. Second, BRFSS is a telephone survey, which limits data collection to individuals who have telephones. Third, both surveys are cross-sectional; that is, they provide information at one point in time. For example, although health coverage was assessed at the time the surveys were conducted, we could not determine whether participants’ coverage changed over the survey year.

Appendix II: Summary of Diabetes Coverage Requirements in State Laws or Regulations, 2004

Requirement related to diabetes

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact

Acknowledgments

Lisa A. Lusk, Jennifer Major, Adrienne Griffin, Craig Winslow, and Ellen W. Chu made key contributions to this report.