Medicare Advantage Plans Often Deny Seniors Access to Special Care, Analysis Shows

Recent analysis by federal investigators reveals that individuals enrolled in private Medicare Advantage plans have faced inappropriate denials for admission to skilled nursing facilities upon leaving the hospital. These plans, which serve approximately 35 million older Americans under the federal Medicare program, have come under intense scrutiny for their practices of delaying and denying medically necessary care. Similar concerns regarding these plans’ tactics have been raised by federal investigators in the past.

Insurance companies that provide Medicare Advantage plans frequently require prior authorization before agreeing to cover treatments. These plans receive a fixed payment to care for patients, creating a financial incentive to minimize spending on care. Consequently, they often deny access to costly specialized inpatient care, such as tailored rehabilitation or therapy services, opting instead to redirect patients to outpatient facilities or back to their homes, as highlighted in the analysis.

Two recent reports from the inspector general’s office at the Department of Health and Human Services focused on major insurers, including UnitedHealth Group, Humana, and CVS Health, which collectively cover a significant portion of Medicare Advantage enrollees. The findings revealed that these companies denied approximately 13 percent of patients’ requests for admission to skilled nursing facilities to continue recovery from surgery or serious illness, according to the first report. Investigators also expressed concerns about the adequacy of supervision over outside contractors used by insurers to determine eligibility for specialized care.

“The dominance of a few large insurance companies in Medicare Advantage and the use of contractors to process prior authorization requests means that the policies and performance of just a few companies can impact care for millions of people,” stated Rosemary Bartholomew, who led the government team.

Overall, about one in five patients appealed the insurers’ denials, with nearly all appeals resulting in reversals, according to the investigators’ review of denials by 19 companies in June 2024. UnitedHealth, which received the highest number of appeal requests, reversed 99.7 percent of its denials, as per the inspector general’s inquiry.

The high rate of overturned denials indicates that many patients experienced unnecessary delays in care due to the insurers’ decisions, and some may not have received the care they needed because they did not appeal.

Investigators also highlighted the physical and mental toll on patients who waited a week or more for admission to facilities. Many were left in hospitals, incurring additional costs and causing distress.

While initial denials may have stemmed from a lack of information or other issues, the high reversal rate suggests a more systemic problem. “Obviously, that’s not the ideal outcome,” Ms. Bartholomew remarked. “You want those requests to be approved at the first request as often as possible.”

The report also pointed to a company owned by UnitedHealth, formerly known as naviHealth, which reviews patient requests. This company is frequently hired by other plans, and investigators found it had higher denial rates compared to plans that made decisions independently or used different contractors. It also exhibited elevated denial rates for patients seeking inpatient rehabilitation services, according to a second report.

NaviHealth has faced accusations of using algorithms to deny claims, and UnitedHealth is currently involved in a class-action lawsuit, which it has denied.

Patients in nursing homes, whose daily care is often funded by federal-state Medicaid programs, may qualify for short-term services under Medicare. Alarmingly, these patients were denied skilled nursing care 40 percent of the time, according to federal investigators. “The extremely high denial rate for skilled nursing facility admission for patients who were living in nursing homes prior to their hospitalization raises concerns that they may not be receiving the intensity and frequency of care after their hospital discharge that they need,” Ms. Bartholomew noted.

The investigators urged the Centers for Medicare and Medicaid Services, which oversees the private Advantage plans, to gather more detailed information regarding denial rates for specific services and the involvement of outside companies in the review process. They also recommended that the agency examine how initial reviews are conducted to understand why so many denials are overturned.

In response to the investigators, Medicare stated that it audits the plans and is conducting a pilot program to collect more data on their use of prior authorization. The agency emphasized that it employs several oversight tools to ensure that the Medicare Advantage program provides adequate healthcare access to enrollees.

Recent analysis by federal investigators reveals that individuals enrolled in private Medicare Advantage plans have faced inappropriate denials for admission to skilled nursing facilities upon leaving the hospital. These plans, which serve approximately 35 million older Americans under the federal Medicare program, have come under intense scrutiny for their practices of delaying and denying medically necessary care. Similar concerns regarding these plans’ tactics have been raised by federal investigators in the past.

Insurance companies that provide Medicare Advantage plans frequently require prior authorization before agreeing to cover treatments. These plans receive a fixed payment to care for patients, creating a financial incentive to minimize spending on care. Consequently, they often deny access to costly specialized inpatient care, such as tailored rehabilitation or therapy services, opting instead to redirect patients to outpatient facilities or back to their homes, as highlighted in the analysis.

Two recent reports from the inspector general’s office at the Department of Health and Human Services focused on major insurers, including UnitedHealth Group, Humana, and CVS Health, which collectively cover a significant portion of Medicare Advantage enrollees. The findings revealed that these companies denied approximately 13 percent of patients’ requests for admission to skilled nursing facilities to continue recovery from surgery or serious illness, according to the first report. Investigators also expressed concerns about the adequacy of supervision over outside contractors used by insurers to determine eligibility for specialized care.

“The dominance of a few large insurance companies in Medicare Advantage and the use of contractors to process prior authorization requests means that the policies and performance of just a few companies can impact care for millions of people,” stated Rosemary Bartholomew, who led the government team.

Overall, about one in five patients appealed the insurers’ denials, with nearly all appeals resulting in reversals, according to the investigators’ review of denials by 19 companies in June 2024. UnitedHealth, which received the highest number of appeal requests, reversed 99.7 percent of its denials, as per the inspector general’s inquiry.

The high rate of overturned denials indicates that many patients experienced unnecessary delays in care due to the insurers’ decisions, and some may not have received the care they needed because they did not appeal.

Investigators also highlighted the physical and mental toll on patients who waited a week or more for admission to facilities. Many were left in hospitals, incurring additional costs and causing distress.

While initial denials may have stemmed from a lack of information or other issues, the high reversal rate suggests a more systemic problem. “Obviously, that’s not the ideal outcome,” Ms. Bartholomew remarked. “You want those requests to be approved at the first request as often as possible.”

The report also pointed to a company owned by UnitedHealth, formerly known as naviHealth, which reviews patient requests. This company is frequently hired by other plans, and investigators found it had higher denial rates compared to plans that made decisions independently or used different contractors. It also exhibited elevated denial rates for patients seeking inpatient rehabilitation services, according to a second report.

NaviHealth has faced accusations of using algorithms to deny claims, and UnitedHealth is currently involved in a class-action lawsuit, which it has denied.

Patients in nursing homes, whose daily care is often funded by federal-state Medicaid programs, may qualify for short-term services under Medicare. Alarmingly, these patients were denied skilled nursing care 40 percent of the time, according to federal investigators. “The extremely high denial rate for skilled nursing facility admission for patients who were living in nursing homes prior to their hospitalization raises concerns that they may not be receiving the intensity and frequency of care after their hospital discharge that they need,” Ms. Bartholomew noted.

The investigators urged the Centers for Medicare and Medicaid Services, which oversees the private Advantage plans, to gather more detailed information regarding denial rates for specific services and the involvement of outside companies in the review process. They also recommended that the agency examine how initial reviews are conducted to understand why so many denials are overturned.

In response to the investigators, Medicare stated that it audits the plans and is conducting a pilot program to collect more data on their use of prior authorization. The agency emphasized that it employs several oversight tools to ensure that the Medicare Advantage program provides adequate healthcare access to enrollees.