Investigators Reveal Denials from Medicare Advantage Plans

Two reports by U.S. investigators have uncovered issues with Medicare Advantage plans rejecting requests for short-term nursing home or inpatient rehab services. The investigation, led by federal officials, found that the three major insurers selling these plans—UnitedHealth Group, Humana, and CVS Health—denied approximately 13 percent of patient requests for admission to skilled nursing facilities after surgeries or serious illnesses.

Medicare Advantage plans, which serve around 35 million older Americans within the federal Medicare program, are under scrutiny for improperly delaying and denying necessary medical services. Concerns have been previously raised regarding these plans’ tactics.

Insurance providers offering Medicare Advantage plans often require a prior authorization before approving treatments. Plans are compensated with a fixed fee for patient care, incentivizing them to minimize expenses. To cut costs, these plans often refuse expensive inpatient care, such as customized rehabilitation or therapy services, and might redirect patients to outpatient facilities or send them home, as noted in the federal analysis.

According to reports from the inspector general’s office at the Department of Health and Human Services, major insurers like UnitedHealth, Humana, and CVS Health denied around 13 percent of patients’ applications for skilled nursing facility care post-surgery or illness. Issues were raised regarding whether these insurers adequately supervised outside contractors tasked with deciding patients’ access to specialized care.

The influence of a few dominant insurance companies in Medicare Advantage, coupled with the reliance on contractors for processing prior authorization requests, implies that the actions and policies of these companies significantly affect millions of patients, explained Rosemary Bartholomew, leader of the government investigative team, in an interview.