Health Law Daily Wrap Up, MEDICARE PART C/MEDICARE ADVANTAGE—OIG REPORTS: Big Medicare Advantage insurers deny long-term acute care and rehab at high rates, (Jun 12, 2026)

By Steven Melendez

The OIG suggested CMS should probe reasons for wide range in denial rates.

The Office of Inspector General (OIG) for HHS found that the largest Medicare Advantage organizations (MAOs) deny prior authorization requests for admission to long-term care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs) at higher rates than most other MAOs, according to a new report. The report recommended CMS identify the reasons for disparities and address the disparities (OIG Report, OEI-09-24-00330 (June 11, 2026)).

Denial rates. Overall, across all MAOs, 65 percent of LTCH requests were denied, and 54 percent of IRF admission requests were denied. The three largest MAOs—CVS Health Corporation, Humana Inc., and UnitedHealth Group, Inc.—each denied at least 71 percent of LTCH authorization requests, while all other MAOs on average denied 42 percent. With regard to IRF admissions, CVS Health denied 51 percent of requests, Humana denied 54 percent, and UnitedHealth Group denied 66 percent, while all other MAOs denied an average of 41 percent, according to the report. The three largest MAOs collectively enrolled almost 20 million people.

“Although no specific denial rate is expected or correct, the wide variation in MAO denial rates for LTCH and IRF requests is concerning because it is unclear why some MAOs had denial rates that were much higher than their peers,” according to the report.

LTCHs provide acute hospital-level care to patients for extended periods of time, including services like respiratory therapy, head trauma care, and pain management. IRFs “provide intensive therapy and medical services in a hospital environment to patients with complex nursing, medical management, and rehabilitative needs,” according to the report. Both types of facilities typically provide care after a stay in a general, acute-care hospital, with hospital staff determining what type of care is needed and requesting admission from the appropriate facility.

Some MAOs use contractors to process LTCH and IRF requests. One contractor, naviHealth, processed one-third of all LTCH and IRF requests reviewed, denying LTCH requests at a 73 percent rate and IRF requests at a 68 percent rate. The company is a subsidiary of UnitedHealth Group and also processes requests for BCBS of Michigan Mutual Insurance Co., Highmark Health, and Humana.

Appeals. On average, when patients appealed denials, MAOs overturned 36 percent of denials for LTCH admission and 43 percent of denials for IRF admission. These rates, too, varied by MAO. Elevance Health, Inc., overturned 69 percent of LTCH denials upon appeal, for instance, while UnitedHealth overturned 57 percent, while Humana Inc. overturned just 11 percent and CVS Health just 10 percent. With regard to IRF care, BCBS of Michigan overturned 86 percent of denials, Elevance Health overturned 83 percent, and CVS Health overturned 82 percent. Denials issued by contractors were more likely to be overturned on appeal.

Enrollees appealed about one third of LTCH and IRF denials overall, according to the report. The median wait time for LTCH appeals was 6 days and for IRF appeals was 5 days, but some appeals took 10 days or more to resolve. Delays usually leave patients waiting in an acute-care hospital, which can lead to greater risks of issues like infections and falls, according to the report, while delaying therapy and treatment they would receive in the LTCH or IRF can lead to worse outcomes.

Conclusions and recommendations. The OIG recommended CMS “collect more comprehensive data in order to efficiently and effectively identify MAOs with problematic patterns of denials and take action as appropriate” and “regularly collect request-level prior authorization data with standardized, predefined service type fields that account for all service types.” And, the OIG suggested, CMS should identify the reasons for the disparities in denial and overturn rates, addressing issues with MAOs or contractors that may lead to inappropriate denials.

CMS did not concur or nonconcur in either recommendation. The agency indicated “that it uses several oversight tools, including annual audits, to ensure that the Medicare Advantage program provides adequate health care access to enrollees” and pointed to a pilot data collection program, according to the report, though the OIG found the pilot lacks “standardized service type data for postacute care admissions” to LTCHs, IRFs and skilled-nursing facilities (SNFs). CMS also indicated it “focuses its audits on specific areas of concern, such as evaluating individual medical necessity decisions for service types with a high rate of denial,” according to the report, though it did not indicate whether or how it would specifically address LTCH and IRF denials.

As of 2024, 54 percent of people with Medicare, a total of 32.8 million people, were enrolled in Medicare Advantage plans, with CMS paying MAOs an estimated $494 billion, according to the report. The OIG study looked at 19 MAOs covering 29.3 million people as of June 2024, forming 86 percent of Medicare Advantage enrollment at that time.

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