Medicare Advantage organizations are denying some post-acute care at high rates

Doctors often gripe that Medicare Advantage (MA) denies their prior authorization requests. New data backs them up.

A June 11 report released by the Department of Health and Human Services Office of the Inspector General (OIG) found that in June 2024, 19 MA organizations denied almost two-thirds of prior authorization requests for long-term care hospital admission and more than half of requests for inpatient rehab facility admissions.

This report builds on past critiques of MA plans improperly denying prior authorization requests for care, including an October 2024 Senate report saying UnitedHealthcare, Humana, and CVS denied requests for post-acute care, like at long-term hospitals and inpatient rehabs, at “far higher” rates than other types of care between 2019 and 2022.

Research also suggests MA plans cost the government 20% more than if beneficiaries were enrolled in traditional Medicare, at the expense of traditional Medicare beneficiaries.

Policy problems. Angela Liu, assistant research professor at Johns Hopkins Bloomberg School of Public Health, told Healthcare Brew the new data is not surprising but it’s “very alarming.”

Liu added that prior authorization isn’t “inherently bad.” It’s a tool for MA plans to ensure treatments are necessary. However, reports like the OIG’s latest one suggest prior authorization in MA would benefit from more guardrails and oversight, particularly as insurance companies integrate AI into their processes, she said.

“Policy has not kept up. It’s very much…the Wild West right now,” she said. “There’s no national organization in our country that determines what gets denied and what doesn’t. Instead, often it falls on the insurers themselves.”

The details. The watchdog’s June report found that when enrollees appealed, MA organizations overturned 36% of long-term hospital denials (272 of 754 appeals) and 43% of inpatient rehab denials (1,406 of 3,295 appeals).

This implies the care may have been medically necessary and improperly denied, Liu said. Not only does this delay patient access to care but it also contributes to growing provider burnout.

“There is a huge administrative burden on the provider side to navigate this prior authorization process,” Liu said.

Insurers clap back. Insurance industry lobbying group America’s Health Insurance Plans (AHIP) put out a statement saying the June report paints a “flawed picture.”

For one, the statement says, the data is from before insurers promised to reform prior authorizations in a June 2025 pledge—the latest in a string of commitments to reform the process.

AHIP pointed to a 2018 OIG report that found the majority of inpatient rehabilitation facilities didn’t comply with Medicare coverage and documentation requirements, suggesting the provider could sometimes be at fault.

The watchdog’s assessment doesn’t consider why plans denied care, and therefore can’t assume it was because of an error by the MA organization, the AHIP statement asserts.

Jeannie Fuglesten Biniek, deputy director for the program on Medicare policy at KFF, told Healthcare Brew MA plans don’t typically publicize the reasons behind prior authorization denials.

“I would love for them to make that data available,” she said.

The June 2025 commitment to reform, meanwhile, was one in a line of promises and initiatives from MA organizations to improve prior authorization, Fuglesten Biniek said.

Trade group the American Medical Association has called out insurers after doctors said their 2018 and 2023 pledges brought little improvement. Though April data from the Blue Cross Blue Shield Association found that insurers have reduced prior authorizations by 11% since their pledge—meaning 6.5 million fewer prior authorizations for patients—doctors say care delays are still getting in their way.

“I don’t think there’s anything special about that June date, other than…a press release that was issued,” Fuglesten Biniek said.