Medicare Advantage Prior Authorization Under Scrutiny
A new report from the U.S. Department of Health and Human Services (HHS) has raised fresh concerns about how Medicare Advantage plans handle prior authorization requests. The findings show that some private Medicare insurers denied requests for skilled nursing and rehabilitation services at unusually high rates. Even more concerning, most of these denials were later overturned after patients or providers appealed.
The report arrives at a time when Medicare Advantage enrollment continues to grow rapidly. Today, more than half of Medicare beneficiaries receive coverage through Medicare Advantage plans. However, the latest findings suggest that administrative barriers may delay or prevent patients from receiving medically necessary care.
HHS Report Reveals High Denial Rates
Skilled Nursing Facility Requests Frequently Rejected
The HHS Office of Inspector General (OIG) examined data from 19 Medicare Advantage organizations during June 2024. Collectively, these plans denied 12% of requests for admission to skilled nursing facilities (SNFs). However, denial rates varied widely among insurers, ranging from 0.4% to as high as 23%.
The report found another troubling trend. Only 18% of denied requests were appealed. Yet when beneficiaries appealed, insurers overturned 95% of those denials in favor of the patient. According to the OIG, this exceptionally high reversal rate suggests that many patients may have been denied medically necessary care initially.
Rehabilitation and Long-Term Acute Care Also Affected
The report also analyzed requests for long-term acute care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs). The three largest Medicare Advantage insurers denied these requests at much higher rates than many of their competitors.
For example, denial rates for long-term acute care reached 80% at one major insurer and exceeded 70% at two others. Similarly, denial rates for inpatient rehabilitation ranged from 51% to 66% among the largest plans, compared with approximately 41% among other Medicare Advantage organizations.
These findings have sparked concerns that seniors may face unnecessary hurdles when seeking post-hospital rehabilitation and recovery services.
Skilled Nursing and Rehabilitation Face Biggest Impact
Patients May Experience Delays in Care
Skilled nursing facilities and rehabilitation centers play a vital role in helping patients recover after surgery, illness, or injury. Therefore, delays in approval can have serious consequences.
The OIG noted that many denials involved patients who required short-term rehabilitation or nursing care after leaving the hospital. In some cases, delayed approvals may extend hospital stays or slow recovery.
Additionally, nursing home residents faced even higher denial rates. Requests for SNF-level care from nursing home residents were denied 40% of the time, compared with 11% for other beneficiaries.
Why Appeals Matter
Most Appealed Denials Are Reversed
The appeal process has become an important safeguard for Medicare beneficiaries. However, relatively few patients challenge denials.
The OIG found that insurers overturned 95% of appealed SNF denials. Similarly, denial reversals for rehabilitation and long-term acute care ranged from 36% to 43%. These statistics suggest that many initial denials may not withstand further review.
Moreover, a recent analysis by KFF found that Medicare Advantage insurers processed more than 52 million prior authorization requests in 2024. Approximately 4.1 million requests were denied, yet only a small percentage of beneficiaries appealed those decisions. Most appeals ultimately succeeded.
Consequently, experts argue that beneficiaries should better understand their appeal rights and receive clearer information from insurers.
Concerns Over Third-Party Contractors
Contractors May Influence Denial Patterns
The OIG also highlighted the role of third-party contractors that review prior authorization requests.
One contractor, naviHealth, processed roughly half of all skilled nursing facility requests examined in the study. It denied 14% of requests, a higher rate than insurers handling requests internally or using other vendors. However, Medicare Advantage plans later overturned 97% of naviHealth’s denials after appeals.
These findings raise questions about whether contractors receive adequate training and oversight. The OIG urged regulators to investigate why denial rates vary so significantly across organizations and vendors.
CMS Recommendations and Industry Response
Regulators Seek Greater Transparency
To address these concerns, the OIG recommended that the Centers for Medicare & Medicaid Services (CMS) collect more detailed prior authorization data. The agency also encouraged CMS to examine why denial and overturn rates vary so widely among insurers and contractors.
Meanwhile, CMS has introduced new rules for 2026 that require Medicare Advantage plans to improve transparency around prior authorization decisions. The reforms also establish faster timelines for appeals and prohibit retroactive denials in many situations.
Industry groups argue that prior authorization helps ensure appropriate care and control healthcare costs. Nevertheless, critics maintain that excessive denials create barriers for patients who need timely treatment.
What This Means for Medicare Beneficiaries
The latest HHS findings underscore the importance of understanding how Medicare Advantage plans manage prior authorization.
Beneficiaries should review a plan’s approval and denial practices before enrolling. They should also remember that a denial is not always the final decision. In many cases, appeals lead to approval.
As Medicare Advantage enrollment grows, policymakers face increasing pressure to balance cost controls with patient access. Therefore, the coming years may bring additional reforms aimed at making prior authorization more transparent, consistent, and patient-centered.
Future of Prior Authorization Reforms
Prior authorization remains one of the most debated issues in Medicare Advantage. The HHS report highlights significant variations in denial practices and raises concerns about patient access to care.
However, ongoing reforms may improve accountability and transparency. If regulators strengthen oversight and beneficiaries become more aware of their appeal rights, the Medicare Advantage system could become more responsive to patient needs while maintaining financial sustainability.
