A recent report from the Office of Inspector General has revealed alarming trends among the three largest Medicare Advantage insurers, who have been denying prior authorization requests for long-term acute care and inpatient rehabilitation services at significantly high rates in 2024.
The analysis, which gathered data from the 19 largest Medicare Advantage organizations as of June 2024, found that denial rates for long-term acute care hospitals (LTCH) were particularly concerning: CVS Health reported an 80% denial rate, Humana 72%, and UnitedHealth Group 71%. In contrast, the average denial rate across all other Medicare Advantage organizations was 42%. For inpatient rehabilitation facilities, the report highlighted denial rates of 66% for UnitedHealth Group, 54% for Humana, and 51% for CVS Health, compared to 41% for other Medicare Advantage groups.
When beneficiaries appealed these denials, Medicare Advantage organizations overturned 36% of LTCH denials and 43% of inpatient rehabilitation denials. This suggests that some beneficiaries were initially denied care deemed medically necessary, as noted in the report.
The report also identified that some high denial rates may stem from subcontractors who denied prior authorization requests on behalf of Medicare Advantage organizations, with many of these denials later being overturned on appeal. This raises questions regarding the training and oversight these subcontractors receive from the Medicare Advantage organizations.
The OIG made several recommendations to the Centers for Medicare & Medicaid Services (CMS), including the regular collection of prior authorization data, specifics on the type of service, and details about contractors’ performance. The report also called for an evaluation of the reasons behind the stark variations in denial and overturn rates for long-term and inpatient rehabilitation care.
CMS has not explicitly agreed or disagreed with these recommendations, according to the report.
This development comes on the heels of several health insurers pledging to reform prior authorization processes, with some changes expected to take effect in early 2026.
Mary Beth Donahue, president and CEO of Better Medicare Alliance, commented that the report’s data is outdated. “This report reflects data from 2024. Since then, health plans have voluntarily eliminated approximately 6.5 million prior authorizations across all markets, over 15% of which are within Medicare Advantage,” Donahue stated. “Prior authorization is an essential tool for safe, appropriate, and affordable care. We remain committed to working with policymakers to continue improving this process, ensuring decisions are made more swiftly and accurately for over 35 million Medicare Advantage beneficiaries.”
The American Health Insurance Plans (AHIP), a representative organization for payers, criticized the report for lacking key contextual information. “The reports ignore serious and well-documented concerns about the large variations in the cost and quality of post-acute care and skilled nursing facilities. Over 35 million Americans actively choose Medicare Advantage because it offers higher quality, more affordable care—specifically aiding seniors in transitioning to high-quality, clinically appropriate facilities to support their rehabilitation and recovery,” said AHIP spokesperson Chris Bond.
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