Seniors enrolled in UnitedHealth Group’s Medicare Advantage plan saw roughly 70.9% of their prior authorization requests for long-term acute care hospital stays denied in June 2024, nearly double the 42% denial rate recorded at smaller Medicare Advantage organizations during the same period. A pair of federal inspector general reports released this week detail how the three largest insurers in the program turned down post-acute care at rates far above their competitors, and how nearly all denials that patients managed to appeal were reversed.
How a 71% denial rate shifts costs onto sick seniors
The gap between UnitedHealth Group’s denial rate and the rate at smaller plans is not a rounding error. When a patient recovering from a severe illness or injury is told their long-term acute care admission requires prior authorization, and that authorization is rejected seven times out of ten, the practical result is delayed treatment. Patients or their providers must then file appeals, wait for reviews, and sometimes accept discharge to lower-intensity settings that do not match their clinical needs.
A companion inspector general review found that across 19 Medicare Advantage organizations, 95% of appealed denials for skilled nursing facility care were overturned. That figure raises a direct question: if insurers reverse nearly every denial that is challenged, the initial rejections appear poorly calibrated. The cycle of deny-then-reverse does not save taxpayer money in the long run. It adds administrative costs for insurers, providers, and the federal government while forcing vulnerable patients to absorb delays in care they ultimately receive anyway.
The U.S. Senate Permanent Subcommittee on Investigations has documented how UnitedHealthcare, Humana, and CVS/Aetna used prior authorization requirements and automated decision tools to restrict post-acute care admissions. That congressional staff report provides a longer timeline showing these practices did not emerge overnight but scaled alongside the growth of Medicare Advantage enrollment. Together with the new inspector general findings, it paints a picture of large insurers leaning heavily on utilization controls that smaller plans appear to apply more sparingly.
OIG data on long-term care and rehabilitation denials
The inspector general’s report designated OEI-09-24-00330 examined a single month of prior authorization decisions across the largest Medicare Advantage organizations. UnitedHealth Group’s roughly 70.9% denial rate for long-term acute care hospital admissions, described in the federal review of denials, stood out because the remaining organizations in the sample denied about 42% of similar requests. The same report found that all three of the largest Medicare Advantage organizations posted some of the highest denial rates for both long-term acute care and inpatient rehabilitation facilities, suggesting a systematic difference in how big carriers manage post-acute utilization.
These figures matter because long-term acute care hospitals and inpatient rehabilitation facilities serve patients with complex needs: prolonged ventilator support, intensive physical therapy after strokes, or recovery from major surgeries. When admission to these settings is denied, patients may be diverted to standard acute-care floors, home health services, or nursing homes that are not equipped to provide the same level of monitoring and therapy. Clinicians interviewed for the inspector general’s work described spending hours assembling documentation and engaging in back-and-forth with plans, even for patients who clearly met Medicare’s coverage rules.
The second OIG report, OEI-09-24-00331, focused on skilled nursing facility admissions. It recorded a 12% overall denial rate for SNF requests across the 19 plans studied in June 2024. The striking detail is what happened next: when patients or their representatives appealed those denials, almost every challenged case was ultimately approved. In other words, the subset of beneficiaries who had the knowledge, support, and stamina to contest an adverse decision usually prevailed, while those who lacked that capacity likely went without covered care or faced pressure to leave the hospital sooner than was clinically advisable.
Because the inspector general’s snapshot captured only one month of activity, it does not reveal seasonal patterns or long-term trends. But paired with earlier Senate findings on algorithm-driven coverage decisions, it reinforces concerns that high denial rates at the largest Medicare Advantage insurers are not random variation. Instead, they appear to reflect internal policies and tools that err on the side of saying no, even when later appeals confirm that services met Medicare criteria from the outset.
Policy questions for regulators and plans
The reports raise several policy questions. One is whether Medicare Advantage organizations should face stronger oversight when their denial rates for specific services diverge sharply from peers. Another is how to ensure that beneficiaries understand their right to appeal and can exercise it without navigating a burdensome, opaque process. Regulators may also examine whether automated prior authorization systems used by large insurers are consistent with Medicare coverage rules and clinical standards of care.
For patients and families, the implications are immediate. A denial for long-term acute care, inpatient rehabilitation, or skilled nursing facility admission is not just a paperwork hurdle; it can determine how safely a frail senior transitions out of the hospital. The new federal findings suggest that many of those denials are ultimately unsustainable when scrutinized, raising the possibility that the current system shifts risk and stress onto some of the sickest Medicare beneficiaries while offering few clear savings in return.
