SNFs will not be surprised by the news that an HHS Office of Inspector General (OIG) report out this week said 95 percent of denials of admission decisions by Medicare Advantage (MA) plans were overturned on appeal, according to an industry expert in the field.

In the report, “Medicare Advantage Organizations Overturned Nearly All Appealed Prior Authorization Denials for Skilled Nursing Facility Admission, Raising Concerns About Initial Denials” (OEI-09-24-00331), OIG said it identified denials of prior authorization requests for post-acute care after a hospital stay as a particular area of concern.

What OIG Found

The report found that in June 2024, the 19 MAOs (Medicare Advantage Organizations) reviewed collectively denied 12 percent of requests for SNF admission. MAO denial rates ranged from 23 percent to 0.4 percent. OIG said:

• Enrollees and their providers appealed 18 percent of SNF denials. When SNF denials were appealed, MAOs overturned 95 percent in favor of the enrollee. The extremely high overturn rate indicates that some enrollees were initially denied medically necessary care and raises concerns about denials that were not appealed, the report said.

  
  

• Contractor naviHealth processed half of all requests for SNF admission and denied 14 percent of them—a higher denial rate than MAOs that processed requests internally (11 percent) and other contractors (9 percent). MAOs later overturned 97 percent of SNF denials issued by naviHealth when enrollees appealed. This raises concerns about whether contractors are receiving appropriate training and oversight from MAOs. NaviHealth is a subsidiary of the MAO United Health Group, Inc., the report said.

  
  

• Finally, MAOs and their contractors denied requests for SNF-level care from nursing home residents 40 percent of the time, a much higher rate than requests from all other enrollees (11 percent).

  
  

Martin Allen, former senior vice president of reimbursement policy for the American Health Care Association/National Center for Assisted Living (AHCA/NCAL), said no one in the industry should be surprised by these findings.

“They live it every day. The issue historically with MA plans was that all of the appeals were heard within the plan until the very end when an outside party was used for the final appeal level. CMS has done some rulemaking in this area with MA to make the process more fair and have an external reviewer make the determination rather than an internal review,” he said.

“To be fair, even traditional Medicare denials are frequently overturned during the ALJ process. Medical records tell the story of skilled care and there’s a little bit of emotion injected into those proceedings, resulting in the ALJ overturning in intermediary denial as well. The OIG report dovetails nicely with the efforts on Capitol Hill to eliminate or dramatically change prior authorizations done by MA plans,” Allen added.

Can This Be Fixed?

In lieu of its findings, OIG recommended that the Centers for Medicare and Medicaid Services (CMS) regularly collect request-level prior authorization data that include service type and contractor information.

CMS should also:

1. take action to address any breakdowns in the initial reviews of SNF admission requests that are driving the extremely high overturn rate of SNF admission denials,

   
   

2. assess reasons for variation in SNF denial rates across MAOs and contractors and take action as appropriate, and

   
   

3. assess reasons for the differences in SNF denial rates between nursing homes and non-nursing home residents and take action as warranted.

   
   

OIG said CMS did not explicitly concur or non-concur with its three recommendations.

Big MA Plans Under Fire

In a separate report filed with the main findings (OEI-09-24-00330), OIG found that the three largest MAOs (UnitedHealth Group, Humana, and Aetna) received three-quarters of the SNF requests and denied them at some of the highest rates.

“Nearly 20 million people were enrolled in plans operated by these three companies,” OIG said. It noted some of the smaller MAOs also had higher denial rates, but they reviewed far fewer SNF cases.

“For example, Molina Healthcare, Inc., denied 23 percent of requests for SNF admission—nearly double the overall SNF denial rate. Although no specific denial rate is expected or correct, the wide variation in MAO denial rates for SNF requests is concerning because it is unclear why some MAOs had denial rates that were much higher than their peers,” OIG said.

Extremely high or low denial rates may indicate differences in MAO policies or performance, such as how they interpret or apply coverage criteria.

In another highlight of the companion report, OIG said it found differences in denial rates between for-profit and nonprofit MAO contracts suggest that financial incentives may be partially driving higher denial rates among some MAOs.

“MAOs can operate for-profit contracts only, nonprofit contracts only, or both types of contracts. The MAO with the highest SNF denial rate, Molina Healthcare, Inc., operated only for-profit contracts at the time of our review, as did the three largest MAOs,” OIG said.

MA Plans in Focus

If there was ever a time MA plans are under the gun, now is it. Besides the OIG reports, there has been a stream of news on congressional movement to act on MA prior authorization practices and other matters.

Just this past week, during the AHCA/NCAL annual Congressional Briefing for its members, AHCA pronounced its support for The Medicare Advantage Improvement Act of 2026 (S. 4384/H.R. 8375), which “represents a significant step towards ensuring that Medicare Advantage delivers on its promise to America’s seniors by addressing issues such as prior authorizations, delayed payments, and clawbacks,” the association said.

For its part, the health insurance plan lobby, AHIP, earlier in the spring unveiled a public campaign announcing that health plans were renewing their commitments to streamline, simplify, and reduce prior authorization, “a critical safeguard that helps ensure their members’ care is safe, effective, evidence-based and affordable.”

AHIP said then that “since making the commitments, leading health plans eliminated 11 percent of prior authorizations across a range of medical services, representing 6.5 million fewer prior authorizations for patients.”

And the newest OIG report is one of a growing list on MA plans. For instance, in a 2022 OIG report, “Some Medicare Advantage Organization Denials of Prior Authorizations Raise Concerns About Beneficiary Access to Medically Medical Care,” the investigation found that 13 percent of prior authorization requests denied by MA plans met Medicare coverage rules and would have likely been approved for coverage under traditional Medicare. 

“Similarly, among payment requests that MA plans denied, OIG found that 18 percent met Medicare coverage rules. Common causes of these denials include MA plans’ use of clinical criteria that are not contained in Medicare coverage rules, plan assertions that prior authorization requests did not have enough documentation to support approval when they indeed did, and both human and system processing errors,” the 2022 report said.

For June companion report from OIG, click here.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.