Federal Watchdog Flags Medicare Advantage Insurers for High Post-Acute Care Denial Rates

The federal government's health care watchdog released two back-to-back reports this month that lay out, in numbers hard to wave away, how often Medicare Advantage plans are blocking the very post-acute care that older patients need most after a hospitalization.

The HHS Office of Inspector General published the reports on June 11, drawing on prior authorization data from 19 Medicare Advantage organizations covering roughly 86 percent of total MA enrollment. According to the OIG report reviewed by Healthcare Finance News, those 19 organizations collectively denied about 13,500 of 109,400 requests for skilled nursing facility admission in June 2024, a 12 percent denial rate. That number alone might look manageable. What follows it does not.

When patients or their providers appealed those SNF denials, the plans reversed them in the enrollee's favor 95 percent of the time, according to the HHS OIG report. That overturn rate is the tell. A skilled nursing facility placement is not a luxury request. It's typically the next stop for someone who just had a hip replaced or survived a stroke and still needs daily nursing or therapy before going home. When a plan denies that placement and then reverses itself 95 percent of the time once challenged, the most straightforward reading is that a lot of those initial denials shouldn't have happened.

A companion OIG report focused on long-term acute care hospitals and inpatient rehabilitation facilities, and the numbers there are steeper. According to the OIG report published on the agency's website, the three largest Medicare Advantage organizations by enrollment denied prior authorization requests for long-term acute care and inpatient rehab at higher rates than most of their 16 peers in June 2024. Aetna denied 80 percent of prior auth requests for long-term care hospital stays, Humana denied 72 percent, and UnitedHealthcare denied 71 percent, according to reporting by Fierce Healthcare. The other 16 plans in the study denied 42 percent. When enrollees appealed, the plans overturned 36 percent of long-term care hospital denials and 43 percent of inpatient rehab denials, the OIG found.

Researchers quoted by NBC News raised a structural concern that clinicians who've watched patients fight these decisions will recognize. A health policy researcher at the University of Pittsburgh noted that for-profit insurers were more likely than nonprofits to deny prior authorization requests, and that the patient populations weren't substantively different across plans. The denial rates were.

The OIG didn't stop at documenting the numbers. The watchdog flagged that many of the denials appear to be issued by third-party contractors working on behalf of the plans, and questioned whether those contractors are getting adequate training and oversight from the plans themselves.

CMS, for its part, told the OIG it launched a Medicare Advantage data collection pilot in February 2026 that will gather service-level prior authorization data from participating plans, including information on contractor involvement, according to Healthcare Finance News. The agency did not explicitly concur or nonconcur with the OIG's three recommendations, which included regularly collecting request-level data and investigating the drivers of high overturn rates.

The insurance industry's trade group noted the OIG analysis didn't account for voluntary commitments announced in June 2025 to streamline prior authorization. Those commitments are worth watching. What these reports confirm is the gap between what plans initially approve and what they ultimately agree was medically necessary is wide enough to matter to the patients sitting in a hospital bed waiting to find out where they're going next.

Sources cited:
- HHS OIG Report: SNF Prior Authorization Denials (https://oig.hhs.gov/reports/all/2026/medicare-advantage-organizations-overturned-nearly-all-appealed-prior-authorization-denials-for-skilled-nursing-facility-admission-raising-concerns-about-initial-denials/)
- HHS OIG Report: LTCH and IRF Denial Rates (https://oig.hhs.gov/reports/all/2026/the-three-largest-medicare-advantage-organizations-denied-requests-for-long-term-acute-care-and-inpatient-rehabilitation-at-some-of-the-highest-rates/)
- Fierce Healthcare (https://www.fiercehealthcare.com/payers/oig-look-ma-prior-authorization-denials-long-term-care-hospitals-inpatient-rehab)
- Healthcare Finance News (https://www.healthcarefinancenews.com/news/medicare-advantage-organizations-overturned-most-snf-denials-oig-finds)
- NBC News (https://www.nbcnews.com/health/health-news/medicare-advantage-plans-denied-prior-authorization-requests-unusually-rcna349467)