Medicare Advantage plans frequently deny prior authorization requests for expensive post-acute care services, with denial rates for long-term care hospitals and inpatient rehabilitation facilities exceeding 50%. According to a recent report from the Department of Health and Human Services (HHS) Office of Inspector General (OIG), these denials often result in significant delays for patients requiring intensive recovery services, though many are overturned upon appeal.
### Why Prior Authorization Denials Impact Post-Acute Care
Prior authorization serves as a utilization management tool intended to curb unnecessary medical spending. However, the OIG found that Medicare Advantage insurers deny 65% of requests for long-term care hospital (LTCH) stays and 54% of requests for inpatient rehabilitation facility (IRF) stays. These figures stand in stark contrast to the broader Medicare Advantage denial rate of less than 8% for all service types, as previously analyzed by KFF.
For patients, these denials translate into tangible barriers to recovery. The OIG reports that an initial denial of a prior authorization request causes an average delay of five to six days in receiving necessary care. Because many Medicare Advantage enrollees are responsible for daily cost-sharing requirements, these delays can also increase the total out-of-pocket financial burden for the patient.
### How Often Are Denials Overturned?
When patients or providers challenge an initial denial, the success rate for approval varies by facility type. According to the OIG, when denials were appealed, the requested service was ultimately approved 36% of the time for LTCHs and 43% of the time for IRFs. The rate for skilled nursing facilities (SNFs) is even more striking, with 95% of appealed denials resulting in an approval.
This high overturn rate for SNFs raises questions regarding the clinical appropriateness of the initial denial decisions. While insurers may view the reversal of a denial as a pragmatic way to avoid the formal independent review process—which could negatively impact a plan’s star ratings—the administrative burden of the appeal process often falls on the patient and the healthcare provider.
### What Data Gaps Exist in Medicare Advantage?
Despite the high volume of determinations—insurers made nearly 53 million prior authorization decisions for Medicare Advantage enrollees in 2024—there is currently no federal requirement for insurers to report detailed, service-level data on these denials. This lack of transparency makes it difficult for regulators and beneficiaries to assess whether specific insurers are disproportionately restricting access to care.
The Centers for Medicare & Medicaid Services (CMS) has initiated a pilot program to collect more granular data at the plan and service level. While this represents a shift toward greater accountability, the agency does not anticipate requiring full, standardized reporting of these metrics until 2027. Consequently, policymakers and enrollees will likely face a multi-year window where comprehensive data on denial trends remains unavailable for public review.
### Comparison of Denial Rates by Service Type
The OIG’s findings highlight that post-acute care services face significantly higher scrutiny than other medical services. The following table illustrates the variance in denial and appeal success rates based on the OIG report:
| Service Type | Initial Denial Rate | Appeal Success Rate |
| :— | :— | :— |
| Long-term Care Hospitals (LTCH) | 65% | 36% |
| Inpatient Rehab Facilities (IRF) | 54% | 43% |
| Skilled Nursing Facilities (SNF) | 12% | 95% |
As Medicare Advantage enrollment continues to represent more than half of all Medicare beneficiaries, the balance between cost containment and patient access to rehabilitation remains a central focus for federal oversight. Ongoing investigations by the Senate and the OIG emphasize the need for consistent reporting to ensure that utilization management does not impede medically necessary care for the nation’s most vulnerable patients.