Medicare Advantage Plans Deny Specialized Care at High Rates

Federal investigators have found that Medicare Advantage plans — the private-sector alternative to traditional Medicare — frequently deny patients access to skilled nursing facilities and specialized rehabilitative care, raising serious concerns that insurers are systematically blocking medically necessary treatment to boost profits.

Two reports released June 11 by the Department of Health and Human Services Office of Inspector General reveal a troubling pattern: when patients appeal denials, plans overturn the vast majority in favor of the enrollee — 95% for skilled nursing facility (SNF) admissions — suggesting that initial denials are often not based on legitimate medical necessity.

The Denial-and-Overturn Pattern

The OIG examined prior authorization data from June 2024 across the 19 largest Medicare Advantage organizations (MAOs), which collectively represent 86% of all Medicare Advantage enrollment — approximately 29.3 million people. The findings paint a stark picture of access barriers for some of the nation’s most vulnerable patients.

For skilled nursing facility admissions, the 19 plans collectively denied 12% of requests, with denial rates ranging from 23% (Molina Healthcare) to just 0.4% (MHH Healthcare). Yet when enrollees and their providers appealed — which happened in only 18% of cases — plans overturned 95% of denials. UnitedHealth Group, which received 42% of all SNF appeal requests, overturned them 99.7% of the time.

“We’re looking at an extremely high overturn rate,” Rosemary Bartholomew, the lead author of the OIG reports, told NBC News. “That really raises concerns that there’s a breakdown happening at that first request step.”

The Three Largest Insurers Lead in Denials

A companion OIG report focused on long-term acute care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs) found that the three largest MAOs — UnitedHealthcare, CVS Health (Aetna), and Humana — denied these requests at some of the highest rates.

CVS Health denied 80% of LTCH requests, Humana denied 72%, and UnitedHealthcare denied 71%. By contrast, the University of Pittsburgh Medical Center Health System denied only 8%. For inpatient rehabilitation, the three insurers posted denial rates of 51%, 54%, and 66%, respectively.

“The range of denial rates from 8% all the way up to 80% by company for long-term care, that’s a pretty shocking variation,” said Erin Bliss, Assistant Inspector General at HHS, as reported by NBC News.

The Contractor Problem

The OIG also flagged the role of naviHealth, a subsidiary of UnitedHealth Group that processed half of all SNF admission requests. NaviHealth denied 14% of requests — higher than the 11% rate for MAOs processing internally and 9% for other contractors. When appealed, MAOs overturned 97% of naviHealth denials, raising concerns about contractor training and oversight.

Impact on Vulnerable Populations

Nursing home residents faced particularly stark barriers. MAOs denied SNF-level care for nursing home residents 40% of the time — nearly four times the 11% denial rate for all other enrollees. The low appeal rate (18%) means most patients simply accept denials rather than fighting them, potentially missing out on medically necessary care.

Miranda Yaver, an assistant professor of health policy and management at the University of Pittsburgh, described the findings as “quite staggering” in an interview with NBC News. “It’s another data point that reinforces what a lot of Americans have already been articulating a lot of frustration about — which is that healthcare decisions are being made with profit rather than medical necessity in mind.”

Industry Response

Industry groups pushed back against the findings. Mary Beth Donahue, president and CEO of the Better Medicare Alliance, said in a statement that the data reflects 2024 and that plans have since “voluntarily eliminated roughly 6.5 million prior authorizations across markets.” Chris Bond of America’s Health Insurance Plans argued the reports “ignore serious, well-documented concerns about wide variations in the cost and quality of post-acute care.”

But patient advocates and provider groups welcomed the scrutiny. Clif Porter, president and CEO of AHCA/NCAL, which represents skilled nursing facilities, told MedPage Today: “It’s unconscionable that insurers are making frail seniors and their families jump through numerous hoops at a critical time for their recovery.”

What’s Next

The OIG has recommended that the Centers for Medicare & Medicaid Services (CMS) regularly collect request-level prior authorization data, investigate the wide variation in denial rates, and address breakdowns in initial reviews. CMS did not explicitly concur or nonconcur with the recommendations, leaving uncertainty about follow-through.

The Center for Medicare Advocacy, which has long documented MA plan abuses, concluded that “it is long past due for policymakers to take meaningful action, with enforceable plan requirements to curb MA plan abuses and adequately protect plan enrollees.”

With more than 35 million Americans now enrolled in Medicare Advantage — representing 54% of all eligible beneficiaries — the stakes for reform have never been higher. The question remains whether voluntary industry commitments or stronger regulatory action will ultimately ensure that patients receive the care they are entitled to.