OIG Data Brief: MA Plans Overturn 95% of Appealed SNF Denials,

Raising Red Flags on Initial Reviews

The Health and Human Services (HHS) Office of the Inspector General (OIG) released a scathing report yesterday regarding Medicare Advantage Organizations (MAOs) denying Skilled Nursing Facility care and then overwhelmingly overturning those denials on appeal. This was accompanied by a companion report on MAOs denying LTCH and IRF admissions for Medicare beneficiaries after a hospital discharge.

Executive Summary 

The Department of Health and Human Services Office of Inspector General (OIG) released a data brief in June 2026 highlighting serious concerns regarding Medicare Advantage Organizations (MAOs) and their use of prior authorization for Skilled Nursing Facility (SNF) admissions. The central finding indicates that while MAOs frequently deny initial requests for necessary post-acute care, they overturn 95% of those denials upon appeal. This extremely high overturn rate strongly suggests that enrollees are initially being denied medically necessary care, introducing unnecessary administrative burdens and risking dangerous delays in patient recovery.  

The Study  

OIG collected request-level prior authorization data from the 19 largest MAO parent companies by enrollment about the prior authorization requests that they or their contractors processed in June 2024.  For each SNF admission request processed in June 2024, MAOs reported the initial decision, the contractor involved (if any), whether the decision was appealed, the appeal outcome, and key dates. 

Key Findings 

1. High Initial Denials vs. Overwhelming Overturns

   • Initial Denials: In June 2024, the 19 largest MAOs, representing 86% of Medicare beneficiaries reviewed collectively denied 12% (approximately 13,500 out of 109,400) of all requests for SNF admission. Denial rates among specific providers varied wildly, from as high as 23.4% (Molina Healthcare) to as low as 0.4% (MHH Healthcare).   

   • Massive Appeal Overturns: Enrollees and providers appealed 18% of these denials. When an appeal was filed, MAOs overturned 95% of their initial denials in favor of the patient. 

   • Major Offenders: The three largest MAOs by enrollment—UnitedHealth Group, Humana, and CVS Health (Aetna)—received three-quarters of all requests and maintained some of the highest initial denial rates. UnitedHealth Group alone received 42% of the appeals and overturned them 99.7% of the time. 

2. The Profit Incentive Factor 

   • For-profit MAO contracts denied SNF admissions at a significantly higher rate (13%) than nonprofit contracts (8%). 

   • The report states that MAOs have a financial incentive to deny SNF-level care and instead approve a lower level of care, such as home health services or outpatient therapy. Although information about what MAOs pay to different types of providers is not available, payment amounts in original Medicare can provide helpful context for the relative cost of care in each setting. The report uses MedPAC’s numbers that the average cost of a SNF stay in original Medicare in 2023 was $16,000, while average home health care costs were only $6,000. 

3. Disproportionate Denials for Nursing Home Residents 

   • Long-stay nursing home residents shifting to short-term SNF care were denied admission 40% of the time—nearly four times the rate of all other enrollees (11%). 

   • MAOs offered explanations for why nursing home residents may be less likely than other enrollees to meet SNF coverage rules. When asked what factors might cause the SNF admission denial rate to be higher for nursing home residents than for other enrollees, some MAOs reported that nursing home residents are less likely to meet the admission criteria for daily SNF-level care because they already have some intermittent skilled therapy supports available. 34 Other MAOs stated that nursing home residents may have a more complex medical history than enrollees who are able to live elsewhere, including more severe or compounded physical or cognitive functional impairments. MAOs stated that a complex medical history, regardless of where the enrollee resides, may diminish the MAOs enrollee’s ability to meaningfully participate in daily skilled therapies in a SNF, and thus may lead to a higher denial rate. 

   • Industry advocates emphasize that a patient's place of residence should have no clinical bearing on whether they qualify for necessary SNF-level rehabilitation. 

4. Contractor Versus Internal Processing

   • naviHealth's Outsized Impact: MAOs outsource 68% of these reviews to third-party contractors. The contractor naviHealth (a subsidiary of UnitedHealth Group) processed half of all requests nationwide and issued a 14% denial rate—higher than internal MAO reviews (11%) and other contractors (9%). 

   • High Failure Rate: When naviHealth's denials were appealed, MAOs overturned them 97% of the time, raising severe concerns over contractor training and corporate oversight. 

5. Patient Impact and Delays

   • When a request is approved initially, it typically happens that same day (Day 0). 

   • When an enrollee has to navigate the appeal process to get their necessary care approved, they face a median wait time of 6 days in an acute-care hospital bed, with 17% waiting 10 days or longer. This results in massive, avoidable financial costs to hospitals and increased psychological stress for patients. 

OIG Recommendations to CMS 

To combat these systemic breakdowns, the OIG issued three primary recommendations to the CMS:    

1. Address Review Breakdowns: Take direct action to investigate and fix the initial review processes driving the unsustainable 95% overturn rate.    

2. Assess Systemic Variation: Review the extreme gaps in denial rates between different MAOs and third-party contractors, ensuring they face proper guidance and compliance enforcement.    

3. Investigate Nursing Home Gaps: Assess why nursing home residents face a 40% denial rate and clarify how residency affects coverage criteria.    

Agency Response  

CMS did not explicitly concur or nonconcur with the recommendations. While pointing to their ongoing rotating audit programs and a newly launched "Service Level Data Collection" pilot from February 2026, the OIG noted that CMS's current data metrics fail to isolate specific contractor tracking or standardized service-type data for SNF requests. The OIG has requested explicit plans in CMS's upcoming Final Management Decision.    

In its response letter, CMS stated it has developed a data collection pilot called the Service Level Data Collection for Initial Determination and Appeals. CMS implemented this new data collection in February 2026 and will collect all service-level determinations, including prior authorization information across all settings, including SNFs. Pilot plans will report whether a third-party vendor participated, in any capacity, in the determination review or decision-making related to determination reviews and decision-making processes (which include prior authorization requests). This data will permit CMS to analyze the relationship between denial rates and whether a third-party vendor was involved with the plans participating in the pilot. This data will also allow CMS to identify and analyze prior authorization decisions by service type for pilot participants and whether there was vendor involvement.