A new federal investigation lends further credence to worries that Medicare Advantage insurers are improperly denying care for seniors in order to increase their profits.
On Thursday, the HHS Office of the Inspector General published a pair of reports finding high rates of denials for post-acute care, with the largest MA insurers — UnitedHealth, Humana and CVS — refusing preapproval requests at a significantly higher rate than their smaller peers.
Many of the denials were overturned on appeal, suggesting the requests for care should have been approved in the first place, the watchdog said.
Improper claims denials are a massive problem, especially as MA continues to grow, experts say. Currently, about 51% of all Medicare beneficiaries are in the program, and that share is expected to grow to 56% over the next decade, according to government projections.
A swelling population paired with high denial rates shakes out to tens of millions of American seniors facing barriers to care they’re likely entitled to receive.
Still, insurance groups clapped back against the research, calling it skewed, outdated and incomplete.
High denial rates for post-acute care, especially among for-profit payers
Medicare Advantage, in which the government pays private insurers hundreds of billions of dollars to administer the care of Medicare seniors, is in increasingly hot water.
MA costs more than traditional Medicare, a delta that continues to increase due to what critics say is rampant insurer gaming of the program’s payment structure in order to increase their profits. That includes payers’ ability to restrict care in a way that traditional Medicare doesn’t allow.
The HHS OIG’s new investigation builds upon previous research that suggests MA insurers are too rigorous in their use of prior authorization, which requires patients to get approval from their plan for care before it’s delivered.
For the new reports, the watchdog homed in on a particular area of concern from its prior investigation: post-acute care after a hospital stay, including referrals to a long-term care hospital and inpatient research facility for help recuperating after an illness, injury or surgery. The HHS OIG also dug into requests for skilled nursing care.
Researchers analyzed information from 19 MA insurers that collectively enrolled 29.3 million people in 2024, representing 86% of MA’s total enrollment at the time.
They found that overall, the insurers denied almost two-thirds of requests for admission to a long-term care hospital and more than half of requests for admission to an inpatient rehab facility.
Notably, the three biggest MA insurers by enrollment — UnitedHealth, Humana and CVS — received the most admission requests, and denied them at a much higher rate than the majority of their peers.
Each of the three companies denied more than 70% of requests for long-term care hospital admissions and more than 50% of requests for inpatient rehab facility admission.
Similarly, the HHS OIG companion report that zeroed in on skilled nursing facility admissions found that MA insurers collectively denied 12% of requests, with denial rates ranging from 0.4% to 23%. Again, UnitedHealth, Humana and CVS received the lion’s share of admission requests — and vetoed them at some of the highest rates of any payers.
UnitedHealth, Humana and CVS had the majority of care requests and the highest rates of denials
Uncommonly high denials at UnitedHealth, Humana and CVS have an outsized impact on Medicare seniors, given the companies jointly covered about 20 million people in 2024.
For example, Highmark Health also denied more than 70% of long-term hospital care requests, while Molina had the highest rate of inpatient rehab denials, at 64%. But both companies had much lower enrollment and significantly fewer requests for coverage, the HHS OIG said.
Frequent denials, few appeals
High denial rates are especially concerning in light of how few beneficiaries appeal the decisions, researchers noted.
MA enrollees appealed about one-third of denied requests for long-term care and inpatient rehab admissions, and fewer than one-fifth of requests for skilled nursing care.
But when appeals were filed, MA insurers overturned 36% of denials for admission to long-term care hospitals, 43% of denials for admission to an inpatient rehab facility and a whopping 95% of denials for admission to a skilled nursing facility.
The sky-high overturn rate for skilled nursing care was driven largely by UnitedHealth, which received 42% of appeal requests and overturned them 99.7% of the time, the HHS OIG found.
Those figures suggest that many enrollees were initially denied medically necessary care — a roadblock that can have major impacts on patients’ health, even if those denials are eventually overturned, investigators said.
Patients have to wait days for their cases to slog through the appeals process. If they need post-acute care, they’re usually in a hospital. That means days of additional inpatient bills for them, and, for a hospital, the loss of a valuable bed that could go to another patient.
In addition, treatment delays have been shown to worsen health outcomes, even if a patient eventually gets the care they need. Spending more time in hospitals can increase the risk of hospital-acquired infections, and longer wait times to transfer to rehab can increase care needs over time, studies suggest.
“The wide variation in denial rates and high overturn rates among some [Medicare Advantage organizations] raise concerns that some enrollees may not be receiving services that MAOs are required to provide,” researchers wrote.
UnitedHealth, Humana and CVS are no strangers to criticism over their claims reviews practices, especially after a Senate report in 2024 found the companies’ denial rates skyrocketed after they started leveraging algorithmic tools to review requests for care. UnitedHealth and Humana have also been sued for denying MA beneficiaries care using the technology.
UnitedHealth has been particularly scrutinized for curtailing access. The healthcare behemoth owns a controversial claims processor called NaviHealth, a business that the HHS OIG found processed more than one-third of all long-term care and inpatient rehab requests — and denied them at higher rates than other contractors or insurers.
Insurers clap back
Insurers generally defend prior authorization as an important tool for preventing unnecessary medical care, though they acknowledge the need to streamline the processes. Still, insurer lobbies slammed the HHS OIG’s findings.
The reports left out important context that many care denials are due to issues in the paperwork, like doctors submitting incorrect information, influential insurance association AHIP said. Moreover, post-acute care is famously wasteful, making it a key area for prior authorizations, the group argued.
“The reports ignore serious, well-documented concerns about wide variations in the cost and quality of post-acute care,” AHIP spokesperson Chris Bond said.
Mary Beth Donahue, the president and CEO of the Better Medicare Alliance, argued that insurers have made significant progress on paring back prior authorizations since 2024.
“Since then, health plans have voluntarily eliminated roughly 6.5 million prior authorizations across markets — including more than 15 percent in Medicare Advantage,” Donahue said.
HHS OIG investigators said in the report that it’s impossible to tell whether denials are inappropriate based on their data. However, high denial rates, and the wide variation in denial rates between companies, are reason for concern.
“Differences in denial rates between for-profit and nonprofit MAO contracts suggest that financial incentives may be partially driving higher denial rates among some MAOs,” researchers wrote.
That’s especially evident given denial rates were higher for long-term and inpatient rehab care, which costs more than other post-acute settings, according to the HHS OIG.
The issue is top of mind for regulators and lawmakers. Politicians on both sides of the aisle utilize increasingly vitriolic language to talk about insurers, even traditionally business-friendly Republicans. Earlier this year, Congress dragged top insurance executives, including the CEOs of UnitedHealth and CVS, to the Hill to ream them over problems in the industry, including prior authorizations.
Similarly, the CMS under both the Biden and Trump administrations has zeroed in on prior authorizations as a key area of reform, launching an MA data collection pilot and auditing insurers’ coverage policies in areas with high rates of denials.
The CMS has also moved to standardize prior authorization policies and move the processes online, while securing a commitment from major insurers to voluntarily pare back the services subject to prior authorization review.
Still, there’s more for health officials in Washington to consider, the HHS OIG said. A good start would be collecting more detailed information about prior authorizations, including from contractors like NaviHealth, that could help regulators identify bad actors.
“These findings warrant further scrutiny from CMS,” investigators wrote in the report. “As enrollment in Medicare Advantage continues to grow, so does the urgency and importance of ensuring that MAOs are delivering on the value that the Federal Government pays them to provide.”
