Two new government reports critical of Medicare Advantage plans’ prior authorization denials in certain settings put into concrete numbers the concerns that physicians and the AMA have raised for years: Patients are being denied timely medically necessary care, leading to care delays or denials that harm their well-being.
One startling statistic from a report that the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) released in June: Medicare Advantage organizations overturned a whopping 95% of prior authorization denials for skilled nursing facility admissions that were appealed. The report notes that “the extremely high overturn rate indicates that some enrollees were initially denied medically necessary care and raises concerns about denials that were not appealed.”
A second OIG report found, among other things, that the three largest Medicare Advantage organizations of the 19 that they evaluated denied requests for long-term acute care hospital admissions and inpatient rehabilitation facility admissions at rates higher than most of their peers. Among them was CVS Health Corp., which denied 80% of long-term acute care hospital admission requests.
Overall, when enrollees appealed these denials, the 19 Medicare Advantage organizations overturned 36% of denials of long-term acute care hospital admissions requests and 43% of denials for admissions at inpatient rehabilitation facilities.
Yet only about one-third of patients appealed their denials. That means many patients never received medically necessary treatment that they likely would have received if they had appealed. Patients also tied up inpatient hospital beds while waiting for decisions.
The reports make recommendations for changes to prior authorization that improve transparency and accountability in the system, which are among the changes that the AMA has called on the government to make to protect vulnerable Medicare patients and better the system that is funded by citizens’ tax dollars.
Notably, the House Ways and Means Committee in July approved a bill to reform and closely monitor the use of prior authorization in Medicare Advantage—the Improving Seniors’ Timely Access to Care Act of 2026. The measure also was tucked into another bill that was passed by the House Energy and Commerce Committee.
The actions show “that this idea has bipartisan support and political legs,” AMA President Willie Underwood III, MD, MSc, MPH, said in a statement. “For too long, Medicare Advantage plans have misused prior authorization to delay or deny medically necessary care for our patients. This legislation would bring greater transparency and accountability to the prior authorization process while reducing burdens that pull physicians away from caring for patients.”
Dr. Underwood, a Buffalo, New York urologist, added that “the next step is the House floor. The bipartisan votes are there. The need is undeniable. The AMA will work with lawmakers in both chambers and both parties until patients are no longer denied medically necessary care by red tape and bureaucratic indifference.”
The AMA is fighting to fix prior authorization by challenging insurance companies to eliminate care delays, patient harms and practice hassles.
Report underscores concerns
The OIG report looking at long-term acute care hospital admissions and inpatient rehabilitation facility admissions found that some contractors were more likely to deny requests for these medical services than MAOs that processed requests internally. In addition, Medicare Advantage organizations later overturned many contractor denials.
These actions lead to real clinical concerns. The AMA’s most recent physician survey shows that 95% of physicians reported that prior authorization delays care; 92% reported that it negatively impacts clinical outcomes and 26% reported that the practice has led to a serious adverse event for a patient in their care, including hospitalization, disability or death.
The OIG report recognized what the AMA physician survey revealed.
“Delays in accessing needed rehabilitation such as physical therapy and occupational therapy can have significant and long-term negative health effects on patients,” the OIG report says. “For example, longer wait times for transfer to an [inpatient rehabilitation facility] following a brain injury is associated with reduced improvement in functional status and higher care needs over time. Spending extra days in an acute hospital setting can also increase a patient’s risk of hospital-acquired patient complications (e.g., healthcare-associated infections and falls). Unnecessary or ‘avoidable’ days spent in a hospital can also mean a significant financial cost to hospitals that is not separately reimbursable.”
Next steps
In the long-term acute care hospital admissions and inpatient rehabilitation facility admissions report, the OIG recommended that the Centers for Medicare & Medicaid Services (CMS):
- Regularly collect request-level prior authorization data that include standardized service type and contractor information.
- Assess reasons for the wide variation of denial and overturn rates for these two services across Medicare Advantage organizations and contractors and take action as appropriate.
The report on skilled nursing facility admissions recommends that CMS should:
- Take action to address any breakdown in the initial reviews of admission requests that are driving the extremely high overturn rate of skilled nursing facility admission denials.
- Assess the reasons for variation in denial rates across MAOs and contractors and take action as appropriate.
- Assess reasons for the differences in denial rates between nursing home residents and other enrollees and take action as warranted, as the study found MAOs are denying access to this level of care for nursing home residents at nearly four times the rate of nonresidents.
As part of its advocacy efforts, the AMA has sent a number of letters to CMS leaders and others in recent years calling for change, including a letter in May 2024 (PDF) and one in June (PDF).
Also in July, the AMA announced an interoperability initiative to support electronic prior authorization by developing and deploying SNOMED CT to CPT® terminology mappings. The initiative is designed to reduce the prior authorization burden and support the CMS Health Tech Ecosystem and its effort to modernize prior authorization, improve interoperability and help patients receive medically necessary care.
Visit AMA Advocacy in Action to find out what’s at stake in fixing prior authorization and other advocacy priorities the AMA is actively working on.
