Background: Colorectal cancer is the second leading cause of cancer death in the United States. Screening for colorectal cancer is now widely recommended but underused. Lack of insurance coverage for screening tests may be one reason patients do not undergo these procedures., Objective: To determine the effect of Medicare reimbursement on utilization rates of invasive screening tests. Use of fecal occult blood testing was not studied before 1998., Methods: We performed a retrospective analysis of ambulatory claims data for Washington State Medicare beneficiaries in 1994, 1995, and 1998. We determined the proportion of patients undergoing diagnostic and screening flexible sigmoidoscopy, colonoscopy, or double-contrast barium enema in 1994, 1995, and 1998 and the proportion receiving fecal occult blood testing in 1998., Results: Use of diagnostic and screening colon tests was low in all years. Fewer than 6% of beneficiaries received any colon test, and fewer than 4% received a screening test. Although more patients underwent diagnostic testing after Medicare coverage began, use of screening tests did not significantly change (odds ratio, 0.99; 95% confidence interval, 0.97-1.01 comparing 1994 and 1998 [P =.33]). Women, individuals older than 80 years, and nonwhite patients were statistically significantly less likely to be screened in all 3 years (P<.001). In 1998, fewer than 7% of patients underwent fecal occult blood testing, with men and nonwhites statistically significantly less likely to have this test (P<.001)., Conclusions: Colorectal cancer screening tests are underused in the Washington State Medicare population, and insurance coverage for these tests did not substantially affect utilization rates in the period studied.