A new federal watchdog report dings the three largest Medicare Advantage insurers for frequent prior authorization denials for long-term care hospital and inpatient rehabilitation stays.
In the report, the Department of Health and Human Services Office of Inspector General said that previous analyses conducted by the agency have raised concerns that prior authorization denials in MA can lead to care delays and negative outcomes.
The study included 19 MA insurers and found that the three biggest—UnitedHealthcare, Humana and Aetna—denied prior auths for long-term care hospital stays and inpatient rehab more frequently than other organizations in June 2024.
Aetna, for instance, denied 80% of PA requests for long-term care hospital stays, while Humana denied 72% and UnitedHealthcare denied 71%. By comparison, the other 16 managed care organizations studied denied 42% on average.
For inpatient rehabilitation facilities, UnitedHealthcare denied 66% of prior authorization requests. Humana denied 54% and Aetna denied 51%, according to the report, while the other organizations' average denial rate was 41%.
"Previous OIG work raised concerns that Medicare Advantage organizations’ use of prior authorization can, in some cases, result in denials and delays in access to needed care for enrollees," OIG wrote in the report. "MAOs that inappropriately deny care are not delivering the full value that taxpayers pay them to provide."
In tandem with the report on long-term care hospitals and inpatient rehab facilities, OIG released a second report looking at prior authorization denials and appeals for skilled nursing care. It similarly analyzed 19 Medicare Advantage insurers and found that, on average, 12% of requests for skilled nursing care were denied.
Denial rates ranged from a high of 23% to a low of 0.4%, according to the report. Enrollees appealed these denials in 18% of cases, and 95% of appeals were overturned in favor of the enrollee.
About half of prior authorization requests related to SNFs were processed by naviHealth, a subsidiary of UnitedHealth Group's Optum. Requests managed by naviHealth were denied 14% of the time, more frequently than those managed internally (11%) or by other contractors (9%).
The Better Medicare Alliance responded to the reports, noting that the data is prior to significant commitments from insurers to reduce the services subject to prior authorization and accelerate the time to decision.
“This 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 BMA President and CEO Mary Beth Donahue. "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," she said.
Chris Bond, a spokesperson for AHIP, said in a statement that the reports also fail to account for "serious, well-documented concerns about wide variations in the cost and quality of post-acute care and skilled nursing facilities."
OIG found that when members chose to appeal denial decisions, 36% of denials for long-term care hospitals and 43% of those for inpatient rehab were overturned on average across the 19 MA insurers studied.
OIG, however, said there was a significant range in successful appeal rates between organizations. For inpatient rehab stays, overturn rates ranged from 14% to 86%, according to the study.
The federal watchdog noted that high denial rates may be driven by contractors that act in the stead of Medicare Advantage plans, raising questions about these relationships.
"This raises concerns about whether contractors are receiving appropriate training and oversight from MAOs," OIG said.
OIG offered several recommendations to the Centers for Medicare & Medicaid Services that could mitigate the issue. For one, it said the agency should consistently track request-level data on prior authorization that includes details on service type and contractor involvement, as well as dive into why there is such a wide variation in denial and overturn rates in this space in particular.
CMS did not concur or non-concur with the suggestions, per the report.