OIG Report Reveals High Denial Rates for Long-Term Care in Medicare Advantage Plans
A new report from the U.S. Department of Health and Human Services Office of Inspector General (OIG) highlights concerns over how Medicare Advantage organizations (MAOs) handle prior authorization requests for long-term acute care hospital (LTCH) and inpatient rehabilitation facility (IRF) services. The findings, shared by the National Association of Long Term Hospitals (NALTH), show that the three largest MAOs denied nearly two-thirds of such requests on average.
The OIG launched its review after earlier work raised questions about whether prior authorization practices could delay or block access to needed care. “MAOs that inappropriately deny care are not delivering the full value that taxpayers pay them to provide,” the report states.
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Of the 19 MAOs reviewed, the three biggest by enrollment rejected prior authorization requests for LTCH and IRF services at higher rates than most peers in June 2024. When enrollees appealed denials, MAOs overturned 36% of LTCH rejections and 43% of IRF rejections. Some denials stemmed from contractors acting on MAOs’ behalf, though many were later overturned.
The OIG recommends Congress and the Centers for Medicare & Medicaid Services (CMS) collect detailed prior authorization data and investigate why denial rates differ so sharply between MAOs and contractors.
“MAOs that inappropriately deny care are not delivering the full value that taxpayers pay them to provide.” According to the report, out of the 19 MAOs reviewed, the three largest by enrollment rejected prior authorization requests for care in LTCHs and inpatient rehabilitation facilities (IRFs) at higher rates than most of their peers in June 2024. When enrollees appealed, MAOs collectively overturned 36 percent of LTCH denials and 43 percent of IRF denials, suggesting that some enrollees were initially denied medically necessary care, as noted by the
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For now, the focus remains on whether oversight changes will make a difference—or if the system is too entrenched to shift.
Patients and providers alike face challenges handling the current framework. Without meaningful reform, delays in care may persist, exacerbating existing inequalities in healthcare access.
The report highlights a gap between policy goals and real-world outcomes. While MAOs argue they are improving processes, the data suggests systemic issues remain. Addressing these requires collaboration across stakeholders to align practices with patient needs.
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Efforts to modernize authorization systems must balance accountability with flexibility. The OIG’s findings offer a roadmap for where improvements are urgently needed.
Healthcare experts stress that the stakes are high. Every delay in care can worsen health outcomes for patients, particularly those with complex medical needs. Reforming these processes is not just a bureaucratic challenge—it’s a matter of public health.
