A Federal Watchdog Just Caught Medicare Advantage Plans Reversing 95% of Their Own Nursing Home Denials — and UnitedHealth’s Algorithm Sits at the Center of It

Washington, D.C. — Medicare Advantage plans denied roughly 12% of requests to admit patients into skilled nursing facilities, then quietly reversed nearly all of those denials when families pushed back. That’s the headline finding from a federal Office of Inspector General report posted Thursday, and it’s already reshaping the conversation about prior authorization on Capitol Hill.

OIG investigators reviewed June 2024 data from the 19 largest Medicare Advantage parent companies. Plans denied about 13,500 of 109,400 SNF admission requests. When enrollees appealed, MAOs overturned 95% of those denials in favor of the patient, according to the report. Only 18% of denials were ever appealed, meaning most beneficiaries simply walked away from care that should have been approved.

OIG didn’t soft-pedal the implication. “The extremely high overturn rate indicates that some enrollees were initially denied medically necessary care,” the report stated, adding that the pattern raises questions about every denial that never got challenged.

NaviHealth Draws Direct Scrutiny

The findings landed hardest on naviHealth, a UnitedHealth Group subsidiary that handled roughly half of all SNF authorization requests in the study. NaviHealth denied 14% of the requests it reviewed, well above the 11% rate for plans that handled requests internally and the 9% for other contractors. When families appealed naviHealth’s decisions, plans overturned 97% of them.

The report also flagged inadequate training and oversight for AI-driven contractor tools, language industry observers read as a direct shot at algorithmic prior authorization. UnitedHealth, Humana, and CVS Health together cover the bulk of Medicare Advantage enrollment.

Long-Stay Residents Hit Hardest

Long-stay nursing home residents fared the worst. Plans rejected SNF-level care requests for that group 40% of the time, compared with 11% for everyone else. Some MAOs argued long-stay residents already receive services that disqualify them from intensive skilled therapy. Patient advocates and provider groups pushed back, calling the math a financial pretext for cutting authorized care.

Denial rates across insurers ranged from 0.4% to 23%, a spread that suggests plan-level policy choices, not patient need, are driving the gap. For-profit plans denied SNF access at higher rates than nonprofits, a pattern OIG linked to financial incentives baked into capitated payments.

Providers Want Real Penalties

Nicole Fallon of LeadingAge told industry reporters that CMS audits have flagged these problems before without forcing change. “Plans get cited for this stuff routinely, and then we don’t see any change,” she said. For carriers the size of UnitedHealth or Aetna, she argued, current civil monetary penalties read as the cost of doing business.

The report adds federal weight to complaints from operators about insurers using data and prior authorization to divert SNF patients, and it lands as a House bill requiring faster MA prior authorization timelines moves toward a vote. Providers say they want CMS to translate Thursday’s findings into enforcement, not another round of warnings.