Medicare Advantage enrollees who challenged denials of long-term acute care won reversals 36% of the time, and those who fought skilled nursing facility denials won 95% of the time, according to two federal watchdog reports covering 19 parent companies. Yet most patients never appealed at all, with just 18% of SNF denials reaching even the first level of review. The gap between high reversal rates and low appeal rates raises a direct question: how many patients accepted denials that their own insurers would have overturned?
Why high reversal rates signal a problem with initial denials
The Office of Inspector General at the Department of Health and Human Services examined prior authorization decisions using June 2024 data from 19 Medicare Advantage parent companies. The three largest organizations denied requests for long-term acute care hospitals and inpatient rehabilitation facilities at some of the highest rates. When enrollees or providers pushed back, plans reversed 36% of LTCH denials and 43% of inpatient rehabilitation facility denials on appeal.
A companion OIG report on skilled nursing facility admissions found an even starker pattern. Plans overturned 95% of appealed SNF denials, yet only 18% of those denials were appealed. That means for every SNF denial that reached appeal and was reversed, roughly four more went unchallenged. The near-total reversal rate at the appeal stage strongly suggests that the initial screening criteria were tighter than the coverage standards plans themselves applied on second review.
This is not a new pattern. An earlier OIG review covering 2014 through 2016 found that plans overturned 75% of their own denials when beneficiaries or providers appealed, but only about 1% of denials were challenged at the first level during that period. The persistence of the gap across nearly a decade of data points to a structural mismatch between how plans screen requests up front and how they evaluate them when pressed.
OIG physician reviewers and the coverage-criteria disconnect
The hypothesis that plans apply stricter thresholds at the initial decision than at the appeal stage is supported by a separate OIG evaluation. In that review, OIG physician reviewers examined a sample of denied prior authorization requests and determined that a substantial portion actually met Medicare rules and likely should have been approved. The finding indicates that some denials did not reflect a genuine clinical judgment that care was unnecessary but rather a misapplication of coverage criteria or an overly restrictive interpretation at the front end.
When outside physicians, applying traditional Medicare standards, conclude that denied services were medically necessary, it suggests a systemic issue rather than isolated error. Prior authorization is supposed to align care with established coverage policies, not to create a parallel set of hurdles that disappear once a patient or provider has the time, literacy, and persistence to appeal. The OIG’s clinical review underscores that the problem lies not only in how often plans deny care, but in how often those denials are inconsistent with the very rules they are required to follow.
Why so few beneficiaries appeal
The data on appeals also highlight an access problem that goes beyond coverage rules. If only 18% of SNF denials and roughly 1% of earlier denials are appealed, most beneficiaries never test whether the decision was correct. Older adults leaving the hospital for post-acute care often face tight discharge timelines, complex medical needs, and limited support. They may not understand that a denial can be appealed, may assume the insurer’s decision is final, or may fear delays in care if they contest it.
Providers sometimes file appeals on behalf of patients, but they, too, operate under time and staffing constraints. The administrative burden of compiling records, drafting clinical rationales, and tracking deadlines can be significant, particularly when denial rates are high. As a result, the people most capable of challenging questionable decisions may be least able to do so consistently, leaving many denials effectively unreviewed.
Implications for oversight and policy
Together, the OIG findings point toward a need for stronger oversight of initial prior authorization decisions in Medicare Advantage. When plans repeatedly overturn their own denials on appeal, regulators have reason to question whether those denials were appropriate in the first place. High reversal rates can function as an early warning signal that beneficiaries are being asked to navigate unnecessary barriers before receiving covered care.
Policymakers may respond by tightening requirements around how plans apply Medicare coverage criteria, increasing transparency about denial rationales, or expanding audits that compare initial decisions with subsequent reversals. Another option is to require plans to proactively review patterns of overturned denials and correct underlying algorithms, training, or policies that contribute to inappropriate front-end decisions.
For beneficiaries and families, the reports carry a practical message: a denial of post-acute care is not necessarily the final word. Given how often plans reverse themselves when challenged, an appeal can be a critical safeguard against losing access to medically necessary services. But relying on individual appeals to fix systemic problems is a fragile strategy. Without reforms that bring initial decisions into closer alignment with Medicare standards, many enrollees will continue to accept denials that might not withstand a second look.
