People enrolled in private Medicare Advantage plans have been inappropriately denied admission to a qualified nursing home upon leaving the hospital, according to a new analysis by federal investigators.
These private plans, which cover about 35 million older Americans under the federal Medicare program, have drawn harsh criticism for delaying and denying medically necessary care. Federal investigators have previously raised similar concerns about the schemes’ tactics.
Insurance companies that offer Medicare Advantage plans often require prior authorization before they will agree to cover treatment.
Plans are paid a set amount to care for patients, so they have a financial incentive to spend less on care. To achieve savings, these plans often deny people expensive, specialized inpatient care, such as rehabilitation services or personalized therapy, and instead may send them to outpatient facilities or back home, according to the analysis.
Two new reports from the Department of Health and Human Services inspector general’s office focused on major insurers: UnitedHealth Group, Humana and CVS Health, the large for-profit companies whose plans cover the bulk of people enrolled in Medicare Advantage. According to the first report, companies denied about 13 percent of patients’ requests to go to a skilled nursing facility to continue their recovery from surgery or a serious illness. The researchers also raised concerns about whether outside contractors used by insurers to decide whether a patient should receive more specialized care were being adequately supervised.
“The dominance of a few large insurance companies in Medicare Advantage and the use of contractors to process prior authorization requests means that the policies and performance of just a few companies can affect the care of millions of people,” Rosemary Bartholomew, who led the government team, said in an interview.
Overall, about one in five patients appealed insurers’ denials, and nearly all were overturned, according to researchers’ review of denials from 19 companies in June 2024. UnitedHealth, which received the largest number of appeal requests, overturned 99.7 percent of its denials, according to the inspector general’s investigation.
The high percentage of denials that were overturned suggests that some people’s care was inappropriately delayed because of the insurers’ decision, and others may not have received the care they deserved because they never appealed.
Researchers also detailed the physical and mental toll of delays and denials for many patients who waited a week or more to enter a facility. Some were trapped in the hospital, adding unnecessary costs to the hospital and distress to patients.
Lack of information or some other setback could have led to initial denials, but the high reversal rate suggested a more systemic problem. “Obviously, that’s not the ideal outcome,” Bartholomew said. “You want those requests to be approved on the first request as often as possible.”
The report also highlighted the role of a company owned by UnitedHealth, the former naviHealth, in reviewing patient requests.
The company is often contracted by other plans, and researchers found it had higher denial rates than plans that made decisions themselves or used other contractors. It also had high rates of denials for patients seeking inpatient rehabilitation services, according to a second report by researchers.
NaviHealth has been accused of using algorithms to reject claims, and UnitedHealth is the subject of a class-action lawsuit. He has previously denied these allegations.
Nursing home patients, whose daily care is often paid for by federal and state Medicaid programs, sometimes qualify for short-term services under Medicare. These patients were denied skilled nursing care 40 percent of the time, according to federal investigators. “The extremely high rate of denial of admission to skilled nursing facilities for patients who were living in nursing homes prior to their hospitalization raises concerns that they may not be receiving the intensity and frequency of care they need after hospital discharge,” Ms. Bartholomew said.
The researchers urged the Centers for Medicare and Medicaid Services, which oversees private Advantage plans, to collect more detailed information on denial rates for specific services and the use of outside companies to conduct reviews. They also urged the agency to focus on how initial reviews were conducted to see why so many denials were overturned.
In its written response to investigators, Medicare said it audited the plans and was conducting a pilot program to gather more information from the plans about their use of prior authorization. The agency “uses several oversight tools to ensure that the MA program provides adequate access to health care for enrollees,” it said.
