A recent federal investigation has found that some of the largest Medicare Advantage insurers frequently deny coverage for costly nursing home care, only to overturn nearly all of these denials upon appeal. The Wall Street Journal reported on this investigation, highlighting concerns that beneficiaries may be inappropriately denied medically necessary care. The findings, primarily from a June 2026 report by the Office of Inspector General (OIG) for the Department of Health and Human Services, indicate a systemic issue within the privatized Medicare system.
The OIG report revealed that Medicare Advantage Organizations (MAOs) collectively denied 12% of requests for skilled nursing facility (SNF) admission during a review period. Crucially, when these denials were appealed by enrollees and their providers, MAOs overturned 95% of them in favor of the enrollee. This extremely high overturn rate suggests that many initial denials were for medically necessary care, raising questions about the initial review processes and the impact on patients who do not appeal.
The investigation also highlighted the role of third-party contractors, with naviHealth, a subsidiary of UnitedHealth Group, processing half of all SNF admission requests and denying 14% of them. When naviHealth's denials were appealed, 97% were overturned, indicating significant issues with their initial assessments. Reports from STAT News and other outlets have previously scrutinized naviHealth's use of algorithms and artificial intelligence in making coverage decisions, which critics argue contribute to inappropriate denials.
Furthermore, the OIG found that requests for SNF-level care from nursing home residents were denied 40% of the time, a rate significantly higher than for other enrollees. This disparity raises concerns about access to post-hospital care for vulnerable populations. Major insurers such as UnitedHealthcare, Humana, and CVS Health have been cited in previous Senate investigations for high denial rates for post-acute care, often linked to the use of advanced technology systems.
The consequences for enrollees include care delays and potential adverse health outcomes, particularly for those who do not navigate the appeals process. The OIG has recommended that the Centers for Medicare & Medicaid Services (CMS) collect more detailed prior authorization data, address breakdowns in initial review processes, and investigate the reasons behind varying denial rates among MAOs and contractors. CMS has indicated it is auditing plans and conducting a pilot program to gather more information.
