HHS watchdog finds high denial rates in Medicare Advantage plans
The inspector general said some large Medicare Advantage insurers rejected prior authorization requests for post-acute care at unusually high rates.
By Tom Brennan · Health & Medicine Correspondent
3 min read
Some of the country’s largest Medicare Advantage insurers denied prior authorization requests for rehabilitation and other post-acute services at unusually high rates, the Department of Health and Human Services inspector general said in reports released Thursday. The findings add pressure to a growing fight over prior authorization, a cost-control practice critics say can delay or block needed medical care.
The HHS watchdog reviewed June 2024 requests across 19 Medicare Advantage organizations, according to the reports. One review found denial rates for long-term care services varied widely by company, ranging from 8% to 80%, Erin Bliss, an assistant inspector general at HHS, said.
Bliss said the spread in denial rates surprised investigators. Rosemary Bartholomew, who led the reports, said the findings raised concern that problems may be occurring when requests are first submitted.
A separate HHS inspector general report examined prior authorization requests for skilled nursing facility care. According to that review, Medicare Advantage plans reversed 95% of denials when patients appealed.
Medicare Advantage plans are private alternatives to traditional Medicare, which is run by the federal government and rarely uses prior authorization. The private plans receive a set government payment per enrollee and can retain more money when they reduce medical spending, including by using prior authorization, according to the HHS watchdog.
The services covered in the HHS review included long-term acute care and inpatient rehabilitation, which are often used after serious illnesses or injuries such as strokes, cardiac problems and severe fractures. The report said long-term acute care hospital stays averaged about $49,000 in 2023, while inpatient rehabilitation facility stays averaged about $24,000.
The inspector general said UnitedHealthcare, CVS Health and Humana had the highest denial rates for those services among the plans reviewed. In some cases, the report said, the companies rejected more than 70% of prior authorization requests. Nearly 20 million people in the United States are enrolled in Medicare Advantage plans run by those three companies, according to the report.
Miranda Yaver, an assistant professor of health policy and management at the University of Pittsburgh, said the denial rates were unusually high and fit with patient complaints that coverage decisions can appear driven by finances rather than medical need. She said patients whose requests are rejected may have to pay themselves or accept a lower level of care.
Meredith Freed, a senior policy manager for KFF’s Medicare policy program, said some denials may come from provider-side paperwork problems, including missing documentation or incorrect billing codes. But Freed said the denial rates identified by HHS appeared to weaken that explanation and raised concern that some patients may have been wrongly denied care.
Yaver also pointed to the report’s finding that for-profit insurers were more likely than nonprofit insurers to deny prior authorization requests. She said the variation was difficult to separate from financial incentives because the plans were not serving sharply different patient groups.
Health Secretary Robert F. Kennedy Jr. has said he wants to change prior authorization rules. Kennedy previously announced commitments from major insurers to streamline the process and reduce the number of services requiring preapproval. AHIP, the insurance trade group, said in April that leading plans had cut 11% of prior authorization requirements across services including diagnostic imaging and outpatient surgery. UnitedHealthcare said in May it had removed two-thirds of authorization requirements for children.
The HHS inspector general recommended that the Centers for Medicare & Medicaid Services collect prior authorization data more often so the agency can track the problem and examine large differences in denial rates among insurers. Bliss said regulators do not currently have enough visibility into those rates.
Aetna, CVS Health’s insurance arm, said in an emailed statement that it reviews requests promptly, provides a clear appeals process and is working on patient-centered improvements. UnitedHealthcare and Humana did not immediately respond to requests for comment.
This story draws on original reporting from NBC News.