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

People enrolled in private Medicare Advantage plans have been inappropriately denied admission to a skilled nursing home when leaving the hospital, according to a new analysis by federal investigators.

These private plans, which cover about 35 million older Americans under the federal Medicare program, have drawn sharp criticism for delaying and denying medically necessary care. Federal investigators have previously raised similar concerns about the plans’ tactics.

Insurance companies offering Medicare Advantage plans often require prior authorization before agreeing to cover treatment.

Plans are paid a fixed amount to care for patients, so they have a financial incentive to spend less on care. To achieve savings, these plans often deny people expensive specialized inpatient care, like tailored rehabilitation or therapy services, and may instead send them to outpatient facilities or back to their homes, according to the analysis.

Two new reports from the inspector general’s office at the Department of Health and Human Services focused on major insurers — UnitedHealth Group, Humana and CVS Health, the large for-profit companies whose plans cover the bulk of people enrolled in Medicare Advantage. The companies denied about 13 percent of patients’ requests to go to a skilled nursing facility to continue their recovery from surgery or a serious illness, according to the first report. The investigators also raised concerns about whether outside contractors being used by the insurers to decide whether a patient should get more specialized care were being adequately supervised.

“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,” Rosemary Bartholomew, who led the government team, said in an interview.

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

The high percentage of denials that were overturned suggests some people’s care was inappropriately delayed because of the insurers’ decision, and others may not have gotten the care they deserved because they never appealed.

Investigators also detailed the physical and mental toll of the delays and denials for many patients who waited a week or more to get into a facility. Some were stuck in the hospital, adding unnecessary costs for the hospital and angst for patients.

A lack of information or some other hiccup might have triggered initial denials, but the high reversal rate suggested a more systemic problem. “Obviously, that’s not the ideal outcome,” Ms. Bartholomew said. “You want those requests to be approved at the first request as often as possible.”

The report also highlighted the role of a company owned by UnitedHealth, the former naviHealth, to review patients’ requests.

The company is often hired by other plans, and investigators found it had higher denial rates than plans that made the decisions themselves or used other contractors. It also had high rates of denials for patients seeking inpatient rehabilitation services, according to a second report from the investigators.

NaviHealth has been accused of using algorithms to deny claims, and UnitedHealth is the subject of a class-action lawsuit. It has previously denied these allegations.

Nursing home patients, whose daily care is often paid for by federal-state Medicaid programs, sometimes qualify for short-term services under Medicare. 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 said.

The investigators urged the Centers for Medicare and Medicaid Services, which oversees the private Advantage plans, to collect more detailed information about denial rates for specific services and the use of outside companies to do the reviews. They also urged the agency to focus on how the initial reviews were conducted to see why so many of the denials were overturned.

In its written response to the investigators, Medicare said it audited the plans and was conducting a pilot program to collect more information from the plans about their use of prior authorization. The agency “uses several oversight tools to ensure that the M.A. program provides adequate health care access to enrollees,” it said.