Private Health Insurance: Coverage of Key Colorectal Cancer	 
Screening Tests is Common but Not Universal (17-JUN-04, 	 
GAO-04-713).							 
                                                                 
Colorectal cancer is the second leading cause of cancer deaths in
the United States. Its mortality can be reduced through early	 
detection and treatment. Four key tests are used to detect the	 
cancer--fecal occult blood test (FOBT), flexible sigmoidoscopy,  
double-contrast barium enema (DCBE), and colonoscopy. Private	 
health insurance plans generally cover these tests to diagnose	 
cancer; however, the extent to which plans cover the tests for	 
screening purposes--where no symptoms are evident--is less clear.
Congress is considering legislation that would require coverage  
of the tests for screening purposes among all private health	 
insurance plans. GAO was asked to (1) identify the state laws	 
that require private health insurance coverage of these screening
tests; and (2) determine the extent to which the tests are	 
covered among small employer, individual, large employer, and	 
federal employee health plans. GAO summarized state laws that	 
require coverage of the tests. GAO examined test coverage among a
sample of the largest 19 small employer and 14 individual plans  
in 10 states without laws requiring the coverage, and among 35	 
large employer plans nationally. The findings cannot be 	 
generalized beyond these plans. GAO also reviewed brochures for  
143 federal employee health plans.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-713 					        
    ACCNO:   A10538						        
  TITLE:     Private Health Insurance: Coverage of Key Colorectal     
Cancer Screening Tests is Common but Not Universal		 
     DATE:   06/17/2004 
  SUBJECT:   Cancer						 
	     Data collection					 
	     Disease detection or diagnosis			 
	     Employee medical benefits				 
	     Health care services				 
	     Health insurance					 
	     Proposed legislation				 
	     State law						 
	     Standards (health care)				 
	     Federal Employees Health Benefits			 
	     Program						 
                                                                 

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GAO-04-713

United States General Accounting Office

GAO

Report to the Ranking Minority Member,

        Committee on Health, Education, Labor, and Pensions, U.S. Senate

June 2004

PRIVATE HEALTH INSURANCE

 Coverage of Key Colorectal Cancer Screening Tests Is Common but Not Universal

                                       a

GAO-04-713

Highlights of GAO-04-713, a report to the Ranking Minority Member,
Committee on Health, Education, Labor, and Pensions, U.S. Senate

Colorectal cancer is the second leading cause of cancer deaths in the
United States. Its mortality can be reduced through early detection and
treatment. Four key tests are used to detect the cancer-fecal occult blood
test (FOBT), flexible sigmoidoscopy, double-contrast barium enema (DCBE),
and colonoscopy. Private health insurance plans generally cover these
tests to diagnose cancer; however, the extent to which plans cover the
tests for screening purposes-where no symptoms are evident-is less clear.
Congress is considering legislation that would require coverage of the
tests for screening purposes among all private health insurance plans.

GAO was asked to (1) identify the state laws that require private health
insurance coverage of these screening tests; and (2) determine the extent
to which the tests are covered among small employer, individual, large
employer, and federal employee health plans. GAO summarized state laws
that require coverage of the tests. GAO examined test coverage among a
sample of the largest 19 small employer and 14 individual plans in 10
states without laws requiring the coverage, and among 35 large employer
plans nationally. The findings cannot be generalized beyond these plans.
GAO also reviewed brochures for 143 federal employee health plans.

June 2004

PRIVATE HEALTH INSURANCE

Coverage of Key Colorectal Cancer Screening Tests Is Common but Not Universal

Twenty states had laws in place as of May 2004 requiring private insurance
coverage of colorectal cancer tests for screening purposes. In 19 of these
states, the laws generally applied to insurance sold to small employers
and individuals, and required coverage of all four tests-FOBT, flexible
sigmoidoscopy, DCBE, and colonoscopy. The law in 1 of the states 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 American Cancer Society (ACS) guidelines.

Most, but not all, health plans offered by the insurers and employers GAO
reviewed covered all four colorectal cancer tests for screening purposes.
Over four-fifths of the small employer plans (16 of 19) covered all of the
tests, whereas 1 plan covered only FOBT and flexible sigmoidoscopy and 2
plans covered only FOBT. Almost three-quarters of the individual plans (10
of 14), covered all of the tests, and the remaining 4 plans covered none
of the tests. Approximately two-thirds of the large employer plans (24 of
35) covered all four of the tests. Among the remaining 11 plans, 5 covered
only FOBT, 2 covered only flexible sigmoidoscopy, and 4 covered none of
the tests. Over half of the plans offered to federal employees covered
each of the four tests. Finally, among all plans that covered at least one
but fewer than four tests, DCBE and colonoscopy were least likely to be
covered.

In commenting on a draft of this report, ACS suggested that the report
overstated the extent of coverage and did not sufficiently highlight the
methodological limitations of the study. In contrast, America's Health
Insurance Plans (AHIP) commented that the report overstated the lack of
coverage. Moreover, AHIP commented that the report did not address the low
rate at which Americans actually receive colorectal cancer screening tests
regardless of insurance coverage, suggesting that factors other than
health insurance coverage are responsible for low screening rates.
Recognizing that the findings are subject to varying interpretations, GAO
attempted to report them neutrally. Although the draft report disclosed
the methodological limitations of the study, in response to ACS comments,
GAO more prominently highlighted certain of the limitations. Finally,
whereas the draft report noted the screening utilization rates, assessing
the factors responsible for them was beyond the scope of this study.

www.gao.gov/cgi-bin/getrpt?GAO-04-713.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact Kathryn G. Allen at (202)
512-7118.

Contents

     Letter                                                                 1 
                                    Results in Brief                        3 
                                       Background                           5 
                        Twenty States Had Laws That Require Private Health 
                                                                 Insurance 
                    Plans to Cover Colorectal Cancer Screening Tests        9 
                        Majority of Health Plans Reviewed Covered the Four 
                                                                Colorectal 
                                 Cancer Screening Tests                     9 
                          External Comments and Our Evaluation             12 
Appendix I                     Scope and Methodology                    
Appendix II State Laws Requiring Private Health Insurance               
               Coverage of Colorectal Cancer Screening Tests               

Appendix III GAO Contact and Staff Acknowledgments 20

GAO Contact 20 Acknowledgments 20

Related GAO Products

Tables

Table 1: State Laws Requiring Private Insurance Coverage of Colorectal
Cancer Screening Tests 9

Table 2: Coverage of Colorectal Cancer Screening Tests Among 19 Small
Employer and 14 Individual Health Plans Reviewed in 10 States 10

Table 3: Coverage of Colorectal Cancer Screening Tests Among Health Plans
Offered by 35 Large Employers Reviewed 11 Table 4: Coverage of Colorectal
Cancer Screening Tests Among 17 National FEHBP Plans 11 Table 5: State
Colorectal Cancer Screening Laws for Private Health Insurance 18

Abbreviations EUR

ACS American Cancer Society
CDC Centers for Disease Control and Prevention
DCBE double-contrast barium enema
FEHBP Federal Employees Health Benefits Program
FOBT fecal occult blood test
OPM Office of Personnel Management
USPSTF United States Preventive Services Task Force

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

United States General Accounting Office Washington, DC 20548

June 17, 2004

The Honorable Edward M. Kennedy
Ranking Minority Member
Committee on Health, Education, Labor,

and Pensions
United States Senate

Dear Senator Kennedy:

Colorectal cancer is the second leading cause of cancer deaths in the
United States. Over 146,000 new cases of colorectal cancer will be
diagnosed and almost 57,000 people will die from the disease in 2004,
according to the American Cancer Society (ACS). The mortality associated
with colorectal cancer can be reduced through early diagnosis and
treatment. Four key tests-fecal occult blood test (FOBT), flexible
sigmoidoscopy, double-contrast barium enema (DCBE), and
colonoscopy-are commonly used to detect colorectal cancer or its
symptoms. ACS recommends that individuals at high risk for developing
the disease and all individuals who reach age 50 receive one or more of
these tests on a regular basis for screening purposes, regardless of
whether they exhibit symptoms of the disease. Private health insurance
plans generally cover these four tests to diagnose suspected cases of
cancer when symptoms are present; however, the extent to which plans
cover the tests for screening purposes is less clear.

Private health insurance plans are offered through different market
segments-such as the small employer, individual, or large employer
segments, or the health plans offered to federal employees.1 Some
previous surveys of the extent of colorectal cancer screening coverage
among private health insurance plans have been limited to only certain
health plans or market segments. Moreover, laws that may require
coverage of the screening tests among health plans sold by insurers vary
from state to state. Congress is considering legislation that would
require
coverage of colorectal cancer screening tests among all private health

1Small employers-typically with 100 or fewer employees-usually purchase
health insurance plans from insurers on behalf of their employees, while
larger employers typically fund their own health plans. In the individual
market, individuals purchase health insurance plans directly.

insurance plans.2 At your request we have examined the extent to which
private health insurance plans cover colorectal cancer screening tests.
Specifically, we determined

1. 	the extent to which state laws require private health insurance plans
to cover the four colorectal cancer tests for screening purposes; and

2. 	the extent to which private health insurance plans cover the four
colorectal cancer tests for screening purposes, specifically health plans

o  sold by insurers to small employers and individuals in states that do
not

require such coverage,  o  offered by large employers across the United
States, and  o  offered through the Federal Employees Health Benefits
Program

(FEHBP).3

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 and the District of Columbia as of May 2004, and consulted with
state officials to clarify the laws as necessary.4 To examine the extent
to which health insurance plans sold to small employers and individuals by
insurers in the states without laws requiring coverage of the tests
actually covered the tests, we contacted the largest health insurers in 10
states without such laws. From these insurers we obtained information from
plan representatives about their coverage policies for their health plan
with the most members. We received responses to our questions from 95
percent (18 of 19) of the small employer insurers we contacted and 82
percent (14 of 17) of the individual insurers we contacted.5 To examine
the extent to which health plans offered by large employers covered the
tests for screening purposes, we randomly selected 50 large employers from
Fortune 500 companies throughout the United States and received

2Most recently introduced were S. 2265, 108th Cong. (2004) and H.R. 4097,
108th Cong. (2004).

3Through FEHBP, the federal government provides group health insurance
coverage to its employees through participating private health insurance
carriers.

4Throughout the remainder of this report, the District of Columbia is
included as a state.

5Although 18 small employer insurers responded, we report results from 19
small employer plans because the colorectal cancer screening benefits for
1 plan differed for two benefit packages.

responses from 71 percent (35 of 49) of the employers we contacted.6 We
relied on self-reported information from officials of the health plans
reviewed and did not independently verify their responses. Further,
although we achieved relatively high response rates, 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 health
plans, precluding our ability to generalize the findings beyond these
plans. Finally, to examine the extent to which health plans offered
through FEHBP covered the four tests for screening purposes, we reviewed
coverage brochures for 143 plans maintained on the Office of Personnel
Management's (OPM) Web site.7,8 We identified the extent to which each
brochure explicitly indicated coverage of each of the four tests for
screening purposes. In addition, we clarified our understanding of the
brochures with OPM staff and confirmed our interpretations of selected
brochures with plan representatives.

We conducted our work from October 2003 through June 2004 according to
generally accepted government auditing standards. Appendix I provides
additional details about our scope and methodology.

Twenty states had laws in place as of May 2004 requiring private health
insurance plans to cover colorectal cancer tests for screening purposes.9
In 19 of these states, the laws generally applied to group and individual
health plans sold by health insurers, and required coverage of four
colorectal cancer tests for screening purposes-FOBT, flexible
sigmoidoscopy, DCBE, and colonoscopy-typically consistent with ACS
guidelines. The law in 1 of the states was more limited in scope, applying

6One company was later removed from the sample because it no longer had
employees in the United States at the time we conducted our work.

7OPM serves as the federal government's human resource agency and
administers FEHBP.

8When a FEHBP plan's brochure offered multiple benefit options, we counted
each option as a separate plan. When a 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 health benefit
plans.

9These state laws apply primarily to coverage sold by insurers, and thus
largely affect plans sold to small employers and individuals. Self-funded
plans are not typically subject to state insurance regulation.

  Results in Brief

to group and managed care plans and not explicitly requiring coverage of
each of the four screening tests according to ACS guidelines.

Among the health insurance plans we reviewed that were sold to small
employers and individuals in states without laws requiring coverage of
colorectal cancer screening tests, offered by large employers, and offered
through FEHBP, we found the majority covered all four colorectal cancer
screening tests. However, some plans we reviewed covered fewer than four
of the tests or none at all, including about 16 percent of the small
employer, 29 percent of the individual, and 31 percent of the large
employer plans. Among plans that covered some, but not all, tests, DCBE
and colonoscopy were least likely to be covered. In particular:

o  	In 10 states without laws requiring private health insurance coverage
of colorectal cancer screening tests, most small employer and individual
plans we reviewed provided coverage for all four screening tests. However,
3 of 19 small employer plans did not cover all four tests and 4 of 14
individual plans covered none of the tests.

o  	Similarly, most of the large employer plans we reviewed covered all
four colorectal cancer screening tests. Among 11 of 35 plans that did not,
7 covered FOBT or flexible sigmoidoscopy and 4 covered none of the tests.

o  	Most FEHBP plans covered all four colorectal cancer tests for
screening purposes. For example, among the 17 national plans that are
offered to federal employees, retirees, and their dependents across the
United States, 12 covered all four tests for screening purposes, and 5
covered all tests except DCBE.

In commenting on a draft of this report, ACS suggested that the report
overstated the extent of coverage, and that the report did not
sufficiently highlight the methodological limitations of the study. In
contrast, America's Health Insurance Plans (AHIP) commented that the
report overstated the lack of coverage. In addition, AHIP commented that
the report did not address the low rate at which Americans actually
receive colorectal cancer screening tests regardless of health insurance
coverage, which it said suggests that insurance coverage of the tests is
not responsible for the low screening rates. 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. Although the draft report disclosed the methodological limitations
of the study, in response to ACS comments, we revised the report to more
prominently highlight certain limitations. Finally, the draft report noted
the rates at which Americans receive colorectal cancer screening tests as

Background

part of the background; however, further assessing the factors responsible
for the service utilization was beyond the scope of this study.

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.10 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.11

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.12 Furthermore, ACS believes that patients and providers should

10American Cancer Society, Cancer Facts and Figures, 2004 (Atlanta, Ga.:
2004).

11In 2001, the most current year for which data were available, the
Centers for Disease Control and Prevention (CDC) estimated that a FOBT
cost between $10 and $25; a flexible sigmoidoscopy cost between $150 and
$300; a DCBE cost between $250 and $500; and a colonoscopy cost between
$800 and $1600. "Health Professionals Facts on Screening,"

Cancer Prevention and Control, Centers for Disease Control and Prevention.

http://www.cdc.gov/cancer/screenforlife/fs_professional.htm (downloaded
Mar. 17, 2004).

12ACS accepts the Medicare program definition for a high-risk individual:
someone who, because of family history, prior experience of cancer, or
other predisposing factors for the disease, faces a high risk for
colorectal cancer. ACS defines an individual with an average risk for
colorectal cancer as someone who does not fall into the high-risk
category.

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.13
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.14 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.15 Reasons
that

13In 2002, over 40 million individuals received health care coverage
through Medicare-the federal health insurance program that serves adults
over age 65, certain persons with disabilities, and people with end stage
renal disease. Prior to January 1, 1998, Medicare covered each of the four
tests only for the diagnosis and treatment of colorectal cancer. The
Balanced Budget Act of 1997 expanded Medicare coverage to include
colorectal cancer tests for screening purposes. Medicare's coverage
guidelines indicate a patient must be at least 50 years old for all tests
except colonoscopy, for which there is no minimum age requirement.
Generally, Medicare covers a FOBT annually, a flexible sigmoidoscopy once
every 4 years, and a colonoscopy once every 10 years. Patients at high
risk for developing colorectal cancer are covered for a colonoscopy once
every 2 years. Medicare also covers a DCBE in place of a flexible
sigmoidoscopy or a colonoscopy once every 4 years or-for high-risk
individuals-once every 2 years.

14USPSTF is an independent panel of private medical experts that evaluates
the merits of clinical research and issues recommendations on preventive
measures. The U.S. Department of Health and Human Services, Agency for
Healthcare Research and Quality sponsors USPSTF.

15GAO analysis of the "Behavioral Risk Factor Surveillance System Online
Prevalence Data, 1995-2002," Division of Adult and Community Health,
National Center for Chronic Disease Prevention and Health Promotion,
Centers for Disease Control and Prevention.

http://apps.nccd.cdc.gov/brfss (downloaded Apr. 26, 2004). The Behavioral
Risk Factor Surveillance System is sponsored by CDC and is conducted by
individual states and territories. In 2002, almost 250,000 adults were
surveyed. Our analysis excluded data from California because it included
respondents under 50 years of age.

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.16

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.17 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.18
About 161 million individuals received health coverage from the group
market in 2002.19 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

20

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

16See U.S. General Accounting Office, Medicare: Few Beneficiaries Use
Colorectal Cancer Screening and Diagnostic Services, GAO/T-HEHS-00-68
(Washington, D.C.: Mar. 6, 2000) and J.M.E. Walsh and J.P. Terdiman,
"Colorectal Cancer Screening, Clinical Applications," The Journal of the
American Medical Association, vol. 289, no. 10 (2003).

17States typically define small groups as those with fewer than 100
employees for purposes of establishing regulations that apply to health
plans in the small group market.

18FEHBP offers plans to all enrollees who may work anywhere in the
country, referred to as national plans. Other plans offered only in
certain local markets are referred to as local plans. In 2003, over 8
million enrollees and their dependents were covered under FEHBP
plans-about 70 percent and 30 percent in the national and local plans,
respectively.

19P. Fronstin, "Sources of Health Insurance and Characteristics of the
Uninsured: Analysis of the March 2003 Current Population Survey," Employee
Benefits Research Institute, Issue Brief Number 264 (December 2003).

20Fronstin, "Sources of Health Insurance and Characteristics of the
Uninsured: Analysis of the March 2003 Current Population Survey."

other benefits.21 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.22

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.23 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.24 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.

21For example, almost all states have a mandate requiring coverage for
mammography screening and about half of the states have mandates requiring
prostate and cervical cancer screening coverage. See U.S. General
Accounting Office, Private Health Insurance: Federal and State
Requirements Affecting Coverage Offered by Small Businesses, GAO-03-1133
(Washington, D.C.: Sept. 30, 2003).

22The Employee Retirement Income Security Act of 1974 (ERISA) preempts
state law as it may relate to an employee benefit plan. See 29 U.S.C. S:
1144(a)(2000). However, ERISA preserves state laws which regulate
insurance from preemption. See 29 U.S.C. S: 1144(b)(2)(A). Federal law
also establishes several requirements for private health insurance plans
that apply to both fully insured and self-funded coverage, such as certain
portability and minimum benefit requirements. For example, the Health
Insurance Portability and Accountability Act protects health insurance
coverage for workers and their families under certain specified
conditions, such as a change in employment. See 29 U.S.C. S: 1181. The
Mental Health Parity Act requires employers with more than 51 employees to
provide coverage for mental health services under the same terms and
conditions applied to other medical conditions. See 42 U.S.C. S: 300gg-5.
The Newborns' and Mothers' Health Protection Act of 1996 provides that
health care plans and insurers may not restrict benefits for a
childbirth-related hospital stay to less than 48 hours (or 96 hours
following a caesarean section delivery). See 42 U.S.C. S: 300gg-4. The
Women's Health and Cancer Rights Act requires health plans and insurers
that provide medical and surgical benefits for mastectomies to provide
coverage for reconstructive surgery. See 29 U.S.C. S: 1185b.

235 U.S.C. S:S: 8901-14(2000).

245 U.S.C. S: 8902(m)(1).

  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.

Table 1: State Laws Requiring Private Insurance Coverage of Colorectal
Cancer Screening Tests

Scope of state laws States Number of states

Apply to fully insured group or California, Connecticut, Delaware,

individual plans and screening test coverage according to ACS guidelines
District of Columbia, Georgia, Illinois, Indiana, Maryland, Minnesota,
Missouri, New Jersey, Nevada, North Carolina, Oklahoma, Rhode Island,
Tennessee, Texas, Virginia, West Virginia

Applied to group and managed Wyoming
care plans, and did not specify
coverage of each test in
accordance with ACS
guidelines

Total

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

Source: GAO analysis of state laws.

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.)

Table 2: Coverage of Colorectal Cancer Screening Tests Among 19 Small
Employer and 14 Individual Health Plans Reviewed in 10 States

        Plan coverage of specified tests Tests covered Number Percentage

                            Small employer insurers

All four tests 16

FOBT and flexible sigmoidoscopy only 1

FOBT only 2

Total plans reviewed 19

                              Individual insurers

All four testsa 10

None of the four tests 4

Total plans reviewed 14

Source: GAO analysis of data provided by insurers.

aOne plan placed an annual limit of $300 on all preventive health
services. This limit could preclude full reimbursement for a DCBE or
colonoscopy.

    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.)

Table 3: Coverage of Colorectal Cancer Screening Tests Among Health Plans
Offered by 35 Large Employers Reviewed

                        Plan coverage of specified tests

                                Tests covered        Number        Percentage 
                              All four testsa            24 
                                    FOBT only             5 
                  Flexible sigmoidoscopy only             2 
                       None of the four tests             4 
                         Total plans reviewed            35 

Source: GAO analysis of data provided by large employers.

aOne plan places an annual limit of $500 on all preventive health
services. This limit could preclude full reimbursement for a colonoscopy.

Over Half of FEHBP Plans Seventy-seven of the 143 FEHBP plans covered all
four screening tests for Covered All Four colorectal cancer in 2004.25
Among the 17 national FEHBP plans, 12 Colorectal Cancer covered all four
tests, and 5 covered FOBT, flexible sigmoidoscopy, and

colonoscopy, but not DCBE. (See table 4.) About 70 percent of the over
8Screening Tests million FEHBP enrollees and their dependents were covered
through the national plans in 2003.

Table 4: Coverage of Colorectal Cancer Screening Tests Among 17 National
FEHBP Plans

Plan coverage of specified tests

                                              Tests covered Number Percentage 
                                             All four tests     12         71 
              FOBT, flexible sigmoidoscopy, and colonoscopy      5         29 
                                                       only        
                                       Total plans reviewed     17        100 

Source: GAO analysis of 2004 FEHBP plan coverage.

25In 2002 and 2003, OPM encouraged insurers to consider covering all four
of the colorectal cancer screening tests.

  External Comments
  and Our Evaluation

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.

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.

Sincerely yours,

Kathryn G. Allen
Director, Health Care-Medicaid

and Private Health Insurance Issues

                       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 To identify states that had laws that require private
health insurance plans Colorectal Cancer to cover colorectal cancer
screening tests, we reviewed the laws in each Screening Test Coverage
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 2003.1 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.2 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.3

1We excluded states that had laws requiring coverage of colorectal cancer
screening tests because determining insurer compliance with state laws was
beyond the scope of this study.

2We excluded states with pending legislation from our sample in the event
that the state passed the legislation during the course of our work.

3Insurance regulators reported that a small employer plan in one state and
an individual plan in two states covered at least two-thirds of the market
in these states. We reviewed only these plans for that particular market
and state.

                       Appendix I: Scope and Methodology

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.4 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).5

  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.6 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.

4We considered coverage for screening purposes to include coverage for
people who do not exhibit signs of colorectal cancer and do not have a
family or personal history of the disease.

5In 2 plans offered to individuals and 2 offered to small employers, some
colorectal cancer screening tests were covered through the health plans'
preventive care rider that provided coverage in addition to the basic
health plan benefits. In our analysis of these plans, we included coverage
information for the subsection of the plan-either with or without the
rider-that included the majority of the plan's members. In addition, for 1
of the plans offered to small employers, half of the plan members had the
rider that provided coverage of colorectal cancer screening tests, and
half did not. The information for both subsections of the plan-with and
without the rider-was included in our results as representing 2 separate
plans. Thus we received responses from 18 of the small employer insurers
we contacted but report results for 19 plans.

6"Fortune 5 Hundred Largest U.S. Corporations," Fortune, Vol. 147, No. 7
(2003). All the companies on this list have over 100 employees.

                       Appendix I: Scope and Methodology

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.

  Table 5: State Colorectal Cancer Screening Laws for Private Health Insurance

          State         Law generally applies to       Law generally requires 
                        group/individual                  coverage consistent 
      (Date enacted)      health plans unless      with ACS guidelines unless 
                            otherwise noteda                 otherwise notedb 
                                  Yes            Generally medically accepted 
    California (2000)                                        cancer screening 
                                                            tests             
    Connecticut (2001)            Yes                        Yes              
District of Columbia           Yes                        Yes              
          (2002)                                 

Delaware (2001) Yes 	Fecal occult blood test (FOBT), flexible
sigmoidoscopy, colonoscopy, double-contrast barium enema (DCBE), or any
combination of the most reliable, medically recognized screening tests, as
determined by the state

        Georgia (2002)         Yes                     Yes                    
        Illinois (2004)        Yes                     Yes                    
        Indiana (2000)         Yes                     Yes                    
        Maryland (2001)        Yes                     Yes                    
       Minnesota (1988)        Yes               Routine screens              
        Missouri (1999)        Yes                     Yes                    
         Nevada (2003)         Yes                     Yes                    
       New Jersey (2002)       Yes                     Yes                    
     North Carolina (2002)     Yes                     Yes                    
        Oklahoma (2002)       Yesc      Accepted published medical guidelines 
      Rhode Island (2000)      Yes                     Yes                    

Tennessee (2004)     Yesd                          Yes                     
Texas (2002)         Yese                          Yes                     
Virginia (2000)      Yes                           Yes                     
West Virginia (2000) Yesf                          Yes                     
                        Group or blanket disability   Colorectal cancer tests 
Wyoming (2001)       policies and                  
                        managed care contractsg       

Source: GAO analysis of state laws.

aState laws may also apply to other market segments, such as health plans
for public sector employees.

bSome state laws require coverage of more than the four tests specified by
ACS, or indicate other guidelines in addition to ACS.

cDoes not include groups with fewer than 50 employees.

dPlans are required to offer coverage of colorectal cancer tests as an
optional benefit.

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

ePlans are required to offer coverage of colorectal cancer screening tests
if they provide coverage for screening medical procedures.

fApplies to plans providing coverage for laboratory and x-ray services.

gThe statute covers all group and blanket disability insurance policies
providing coverage on an expense incurred basis, group service or
indemnity type contracts issued by a non-profit corporation, group service
contracts issued by a health maintenance organization, all self-insured
group arrangements to the extent not preempted by federal law, and all
managed health care delivery entities of any type or description.

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact Randy DiRosa, (312) 220-7671

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.

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