A Federal Watchdog Just Caught Medicare Advantage Plans Denying Nursing Home Care — Then Reversing 95% of Those Decisions on Appeal

WASHINGTON — When a federal investigator starts asking questions about your denial rates, you know something’s off. That’s exactly what happened last month when the Department of Health and Human Services’ Office of Inspector General dropped not one, but two reports on how Medicare Advantage plans handle requests for nursing home admissions.

The findings weren’t subtle.

Among the 19 largest Medicare Advantage organizations, the denial rates for skilled nursing facility admissions ranged from a eyebrow-raising 23 percent down to just 0.4 percent. But here’s where it gets interesting: when patients or their doctors actually bothered to appeal those denials, the plans reversed course 95 percent of the time.

Let that sink in. Nearly every single denial that got challenged was wrong.

“The extremely high overturn rate indicates that some enrollees were initially denied medically necessary care and raises concerns about denials that were not appealed,” the OIG report states, in the kind of dry government language that doesn’t quite capture how many seniors probably just gave up and went without care.

The three biggest players — UnitedHealth, Humana, and CVS Health (which owns Aetna) — denied requests for long-term care hospitals and inpatient rehabilitation at rates higher than most of their competitors. When enrollees appealed those specific denials, plans overturned 36 percent of long-term hospital denials and 43 percent of rehabilitation denials.

Again, that’s a lot of reversed decisions.

Part of the problem appears to be contractors. The reports highlight naviHealth, a subsidiary of UnitedHealth, which processed half of all skilled nursing facility requests and denied 14 percent of them — a higher rate than plans that handled reviews internally. When appealed, naviHealth denials were overturned 97 percent of the time.

The OIG also found that nursing home residents themselves faced even steeper odds. Plans denied requests for skilled nursing-level care from current nursing home residents 40 percent of the time, compared to just 11 percent for everyone else.

What happens now? The OIG wants CMS to start collecting more detailed data on prior authorization requests, including which contractors are doing the denying. They also want the agency to figure out why there’s such wild variation in denial rates between plans and why nursing home residents get hit harder than other patients.

CMS, for its part, didn’t explicitly agree or disagree with the recommendations.

For nursing home operators, the reports add fresh ammunition to a long-running complaint: that Medicare Advantage plans have become increasingly aggressive about denying or delaying payments for post-acute care, leaving facilities to absorb the costs or fight lengthy appeals.

The timing matters. With Medicare’s trust fund facing pressure and policymakers looking for savings, any evidence that private insurers are blocking access to promised benefits could fuel calls for tighter regulation — or at least more transparency about who’s getting denied and why.

For now, the data speaks for itself. When nine out of ten appealed denials get reversed, something’s broken at the front end. The only question is whether anyone with the power to fix it will actually do something about it.