Medicare Advantage plans often deny seniors access to rehab care, an analysis shows
People enrolled in private Medicare Advantage plans were inappropriately denied admission to a skilled nursing home when they left 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 intense criticism for delaying and denying medically necessary care. Federal investigators had previously raised similar concerns about the scheme’s tactics.
Insurance companies that offer Medicare Advantage plans often require prior authorization before agreeing to treatment. The companies say they are reducing the number of procedures that require prior authorization as part of a broad commitment they made last year.
Plans are paid a fixed amount for patient care, giving them a financial incentive to spend less on care. To achieve savings, these plans often deny people expensive specialized inpatient care, such as tailored rehabilitation or therapy services, and instead may send them to outpatient facilities or back home, the analysis says.
Two new reports from the Department of Health and Human Services’ Office of Inspector General focused on major insurers — UnitedHealth Group, Humana and CVS Health, the large for-profit companies whose plans cover the majority of people enrolled in Medicare Advantage. The companies declined about 13 percent of patients to go to a skilled nursing facility to continue recovering from surgery or a serious illness, according to the initial report. Investigators also raised concerns about whether outside contractors used by insurers to decide whether a patient should receive more specialized care are adequately monitored.
“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 the care of millions of people,” Rosemary Bartholomew, who led the government team, said in an interview.
Overall, about one in five patients appealed insurers’ denials, and nearly all were reversed, according to investigators’ June 2024 review of 19 companies’ denials. UnitedHealth, which received the most appeals, overturned 99.7 percent of its denials, according to the inspector general’s investigation.
The high percentage of overturned denials suggests that some people’s treatment was unreasonably delayed because of the insurers’ decision, and others may not have received the treatment they deserved because they never appealed.
“The reports ignore serious, well-documented concerns about wide disparities in the cost and quality” of nursing homes, Chris Bond, a spokesman for AHIP, an insurer trade group, said in a statement. “More than 35 million Americans actively choose MA because it provides them with better, more affordable care – including helping seniors transition to high-quality, clinically appropriate care facilities to support their rehabilitation and recovery.”
Mary Beth Donahue, president of the Better Medicare Alliance, which represents the private plans, noted in a statement that investigators’ data was from 2024.
“Since then, health plans across all markets have voluntarily eliminated approximately 6.5 million prior authorizations – including more than 15 percent in Medicare Advantage,” she said.
“Our priority is to help patients get the care they need without unnecessary delays,” said David Whitrap, a spokesman for CVS Health, adding that the company promptly reviews requests and offers “a clear appeals process.”
Investigators also detailed the physical and psychological consequences of the delays and denials for many patients who waited a week or longer to enter a facility. Some were stranded in hospital, causing unnecessary costs to the hospital and anxiety to patients.
A lack of information or some other hiccup may have led to initial denials, but the high reversal rate suggested a more systemic problem. “This is obviously not the ideal outcome,” Ms. Bartholomew said. “You want these applications to be approved on the first application as often as possible.”
The report also highlighted the role of a company owned by UnitedHealth, formerly naviHealth, in reviewing patient requests.
The company is often hired by other plans, and investigators found that it had higher denial rates than plans that made the decisions themselves or used other contractors. There was also a high rejection rate among patients seeking inpatient rehabilitation services, according to a second report by 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 day-to-day care is often funded by federal Medicaid programs, are sometimes eligible for short-term benefits under Medicare. According to federal investigators, these patients were denied skilled care 40 percent of the time. “The extremely high skilled nursing facility admission rejection rate for patients who were living in nursing homes prior to their hospitalization raises concerns that they may not receive the intensity and frequency of care they need once they are discharged from the hospital,” Ms. Bartholomew said.
Investigators asked the Centers for Medicare and Medicaid Services, which oversees private Advantage plans, to collect more detailed information about denial rates for certain services and the use of outside companies for the reviews. They also called on the agency to focus on how the initial reviews were conducted to find out why so many denials were overturned.
In its written response to investigators, Medicare said it reviewed the plans and conducted a pilot program to gather more information from the plans about the use of prior authorization. The agency “uses multiple monitoring tools to ensure that the MA program provides students with appropriate access to health care,” it said.
