(In case you missed the OIG’s MA report article in Park Place, the full details are here.)

Health insurers are none too pleased with last week’s report by the HHS Office of Inspector General (OIG) that said 95 percent of denials of admission decisions by Medicare Advantage (MA) plans were overturned on appeal. The scathing OIG assessment triggered a pointed response by the plans’ advocates at America’s Health Insurance Plans (AHIP).

At the same time, a respected long-term care academic source said there are real transparency issues involved with the admissions decisions that need to be clarified before moving forward on broader MA practices touched on by the OIG investigation.

The main OIG 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.

The ‘Omissions’

First, AHIP came out swinging in a prepared statement full of references as to why OIG’s report is flawed. Chris Bond, AHIP spokesperson, said the reports (OIG issued a companion report to its main report) ignore serious, well-documented concerns about wide variations in the cost and quality of post-acute care and skilled nursing facilities.

“More than 35 million Americans actively choose MA because it provides them with better, more affordable care – including helping seniors transition to high-quality, clinically appropriate care settings to support their rehab and recovery,” he said.

OIG omits key context on reasons for denials, Bond said. These include:

• OIG provides no context around the reasons for denials. As such, they cannot differentiate between claims denied because of administrative issues (e.g., missing documentation, care from out-of-network providers, services excluded from coverage) from those that failed a clinical assessment of medical necessity.

• The reports likewise ignore common reasons for overturned denials, such as providers’ offices sharing information that was missing from the initial claim—a frequent cause of such reversals, according to AHIP.

Data Citations

The health plan lobby also said previous research, including reports from OIG, raised serious concerns about wasteful spending and quality issues in post-acute care.

AHIP said OIG estimated that Medicare paid IRFs nationwide $5.7 billion for care to beneficiaries that was not reasonable and necessary in a 2018 examination. Many Inpatient Rehabilitation Facility Stays Did Not Meet Medicare Coverage and Documentation Requirements.

AHIP also said the latest OIG reports don’t account for the health plan industry’s voluntary, multi-year commitments to streamline and simplify prior authorization that were announced in June 2025. As part of this broad industry effort, participating health plans recently announced a standardized approach for providers submitting electronic prior authorization requests for the majority of medical services, including those within the MA program.

Lastly, AHIP cited data that show MA outperforms FFS Medicare on quality, affordability, and outcomes. “A recent analysis from Inovalon provides one of the most robust comparisons on the quality between MA and FFS Medicare to date, AHIP said.

Comparing similar individuals who enrolled in MA versus FFS, MA beneficiaries experience:

• 40 percent fewer hospital admissions;

• 30 percent fewer inpatient days;

• 126 percent fewer 30-day readmissions;

• and 71 percent fewer preventable hospitalizations.

On average nearly $6,300 less per year spent on total health care costs than FFS enrollees.

AHIP said additional data reinforces that MA delivers higher quality care compared to FFS. Across 10 HEDIS measures, MA outperformed FFS in all but one, including cancer screenings, cardiovascular disease, diabetes, and musculoskeletal disease, AHIP said.

Be Clear!

For Miranda Yaver, Ph.D., assistant professor, University of Pittsburgh, Department of Health Policy and Management, the reports draw attention to the need for service-level reporting rather than just aggregate denial rates.

“[This would] identify where barriers are arising, which can point the way toward targeted interventions into prior authorization and claim review,” she said.

“Another valuable oversight measure would involve requiring that reversals have an accompanying explanation for the reversal of an initial denial, so as to identify whether the denials were inappropriate from the start or whether other factors were at work [whether billing code errors or a change in the patient's condition that is clinically relevant to care being covered].”

Yaver said these denials are certainly more alarming when viewed in the context of low rates of appeal.

“Looking across Medicare Advantage, KFF finds that just 11.5 percent of prior authorization denials are appealed. In these [OIG] reports, we see slightly higher rates of appeal, with 18 percent of prior authorization denials regarding skilled nursing care being appealed — but that's still a small minority,” she said.

“Appealing an insurance issue is taxing on a good day, and we're generally not having our best day when navigating these processes, which are rife with red tape.”

What's more, Yaver said, seniors experiencing cognitive decline may be especially ill-positioned to appeal, and these areas of care may be new to younger generations of relatives who may have to take on the burden of helping with appeals in the setting of destabilizing family medical issues.

“That really highlights the importance of getting the coverage decision right on the first try,” she said.

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