OIG Report Finds Top Medicare Advantage Insurers Frequently Deny Prior Authorization for Long‑Term Acute Care and Inpatient Rehab

A recent Office of Inspector General (OIG) report shows that the three largest Medicare Advantage (MA) insurers denied prior‑authorization requests for long‑term acute care hospitals (LTCH) and inpatient rehabilitation facilities at markedly higher rates in June 2024.

The analysis examined data from the 19 biggest MA organizations for that month. Denial rates for LTCH admissions were 80% for CVS Health, 72% for Humana, and 71% for UnitedHealth Group, compared with a 42% average across all other MA plans. Inpatient rehabilitation denial rates were 66% for UnitedHealth Group, 54% for Humana, and 51% for CVS Health, versus 41% for the remaining MA organizations.

When beneficiaries appealed, MA plans reversed 36% of LTCH denials and 43% of inpatient rehabilitation denials, suggesting that some enrollees were initially denied care that was medically necessary.

The OIG noted that high denial rates often stemmed from third‑party contractors handling prior‑authorization requests on behalf of the insurers. Many of these contractor‑generated denials were later overturned on appeal, raising questions about the contractors’ training and oversight.

In response, the OIG recommended that CMS regularly collect prior‑authorization data that includes service type and contractor information, and assess the reasons behind the wide variation in denial and overturn rates for LTCH and inpatient rehabilitation services.

CMS neither explicitly endorsed nor rejected the recommendations.

The report follows recent commitments from several health insurers to streamline prior‑authorization processes, some of which took effect at the start of 2026.

Better Medicare Alliance, a Medicare Advantage advocacy group, argued that the OIG’s data are outdated. “The report reflects data from 2024. Since then, health plans have voluntarily eliminated roughly 6.5 million prior authorizations across markets — including more than 15 percent in Medicare Advantage,” said Mary Beth Donahue, president and CEO. “Prior authorization is an important tool for safe, appropriate, and affordable care. We remain committed to working with policymakers to continue improving prior authorization, so decisions are faster, easier, and more accurate for more than 35 million Medicare Advantage beneficiaries.”

The American Health Insurance Plans (AHIP) trade group countered that the report omits key context. “The reports ignore serious, well‑documented concerns about wide variations in the cost and quality of post‑acute care and skilled nursing facilities. 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 settings to support their rehab and recovery,” said AHIP spokesperson Chris Bond.

Photo: Piotrekswat, Getty Images

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