Medicare Advantage Prior Authorization Denials, When the Contractor Denies and the MAO Overturns, Who Owns the Gap
Two OIG reports published June 8 document systematic post-acute care prior authorization failures across SNF, LTACH, and IRF settings. The problem is not the denial rate. It is who is making initial decisions, whether those contractors are being overseen, and why 82 percent of denied enrollees never reached the overturn.
In this edition
The two OIG reports The 95% overturn and 18% appeal naviHealth and contractor governance What OIG recommended, and CMS’s response What plans are underestimating The verdict, in one line Why this matters by function Who owns the response, and what to do now Questions for leaders & sourcesThe Office of Inspector General published two companion evaluations on June 8, 2026, covering Medicare Advantage prior authorization denials for post-acute care. One report (OEI-09-24-00331) covers skilled nursing facility admissions. The other (OEI-09-24-00330) covers long-term care hospitals and inpatient rehabilitation facilities.
The two reports are designed to be read together. They document the same structural failure appearing in three different clinical contexts: initial denial rates that are high, overturn rates on appeal that are higher still, a contractor layer making the initial decisions that MAOs are then reversing at scale, and a federal oversight program that lacks the data infrastructure to observe any of it systematically.
CMS did not explicitly concur or nonconcur with any of the five combined recommendations across both reports. That response tells you something about the governance architecture plans are operating inside.
“When only 18 percent of denied enrollees appeal, a 95 percent overturn rate does not mean the appeals system is working. It means most patients who were wrongly denied medically necessary care simply did not receive it.”
The OIG studied 19 Medicare Advantage organizations across both reports. The data covers June 2024 — a representative period for utilization management operations, not an outlier. The findings reflect how these systems routinely function, not how they fail under stress.
For payer compliance and operations leaders, the significance extends beyond the headline denial numbers. The reports surface three compounding problems: contractor governance failures, a member access crisis for the most vulnerable post-acute enrollees, and a federal data gap that leaves plan-level monitoring as the only available oversight mechanism.
SNF prior authorization denials overturned on appeal — confirming the initial decisions were wrong. But only 18% of denied enrollees ever filed an appeal.
naviHealth processed half of all SNF requests. MAOs overturned 97% of its denials on appeal.
NaviHealth, a subsidiary of UnitedHealth Group, processed half of all skilled nursing facility prior authorization requests across the 19 MAOs studied. It denied 14 percent of those requests — above both the internal MAO processing rate of 11 percent and other contractors at 9 percent. When naviHealth’s SNF denials were appealed, MAOs overturned 97 percent of them.
The MAO that owns naviHealth as a subsidiary has been overturning its own contractor’s initial decisions in favor of enrollees at a rate just short of universal. In a functioning delegation oversight program, a contractor whose decisions are overturned at this rate would have already triggered corrective action, performance remediation, or a structured root-cause review.
The OIG also documented that nursing home residents seeking SNF-level care after an acute episode were denied at a 40 percent rate — nearly four times the 11 percent rate for all other enrollees. This population represents some of the most clinically complex and administratively unsupported members in an MA plan’s book. A denial rate at this level is not a utilization management outcome. It is an access failure with Stars, compliance, and enforcement implications.
For the LTACH and IRF settings, the three largest Medicare Advantage organizations denied admission requests at higher rates than most of their 16 peers. IRF overturn rates ranged from 14 percent to 86 percent across MAOs — a range that does not reflect variation in medical judgment.
CMS’s silence is a governance choice, not a procedural non-answer.
CMS’s decision not to concur or nonconcur with either set of OIG recommendations is a governance choice, not a procedural non-answer. It tells plans that the federal oversight infrastructure for post-acute PA contractor performance will not be built. The monitoring obligation flows downward to plans, while the regulatory accountability remains unchanged.
This is consequential for plans that have delegated post-acute PA to any contractor — not just naviHealth. Without program-level contractor performance benchmarks, plans cannot validate whether their internal monitoring is calibrated to realistic peer norms. They are responsible for identifying a problem they have no external reference point to measure.
Collect request-level PA data by service type and contractor
Applied to both reports. CMS declined to concur or nonconcur. This data does not exist at the program level.
Address breakdowns in initial SNF admission reviews driving the high overturn rate
CMS declined to concur or nonconcur. The structural driver — contractor-level initial review quality — remains unaddressed federally.
Assess reasons for wide variation in SNF, LTACH, and IRF denial and overturn rates
Without program-level contractor data, CMS cannot do this. Plans are the only entities with access to the relevant information.
Assess higher denial rates for nursing home residents
The 40% vs. 11% disparity for a clinically complex, vulnerable population. CMS declined to concur or nonconcur.
A delegation agreement is not an oversight program
The delegation governance problem sits at the center of both reports. Health plans are required under CMS regulations to oversee the performance of their first-tier, downstream, and related entities. That obligation is not discharged by the existence of a delegation agreement. It requires ongoing monitoring, defined performance thresholds, escalation protocols, and the documentation to demonstrate that problematic patterns were identified and addressed.
When a contractor processes half of all skilled nursing facility admission requests and its initial denial decisions are overturned at 97 percent when appealed, the monitoring infrastructure that should have caught that pattern either was not in place or was not acted upon. The OIG finding is not a disclosure that the contractor was wrong. It is a disclosure that the plan’s delegation oversight program failed to identify and respond to a systematic performance failure.
CMS’s non-response to the paired OIG recommendations makes the plan-level implications concrete. The agency declined to commit to collecting request-level prior authorization data by service type and contractor. That means plans cannot benchmark their contractors’ performance against a published standard. They cannot verify their contractor is performing at or near peer norms. They cannot use federal program data to validate their internal monitoring findings. They are, in effect, operating a delegation oversight program in a data vacuum — responsible for oversight they cannot perform with any external reference point.
The appeal rate is the most important governance diagnostic in both reports. When 82 percent of wrongly denied enrollees accept the denial — because they lack the administrative support, the persistence, or the knowledge to appeal — the overturn rate documents the failure but does not remediate it. A 97 percent contractor overturn rate combined with an 18 percent appeal rate means the compliance system is catching errors only for the subset of patients who can navigate it. That is not a functional system. It is a system that transfers cost and burden onto the most vulnerable members while the governance infrastructure remains unchanged.
Key Insight
The 95% SNF overturn rate is not reassuring evidence that the appeals process works. It is evidence that the initial process is systematically broken — and that most of the damage is invisible because only 18% of denied enrollees ever reach the appeal stage.
Delegation Rule
CMS holds plans accountable for their delegates’ performance. A delegation agreement is necessary but not sufficient. A functioning oversight program requires monthly contractor-level denial rate visibility, trend analysis, escalation thresholds, and corrective action documentation.
The naviHealth Dimension
naviHealth is a subsidiary of UnitedHealth Group. When UHG-sponsored MAOs overturn 97% of naviHealth’s SNF denial decisions on appeal, the structural question about oversight of a wholly owned PA subsidiary is no longer theoretical. It is documented at scale.
“A 97 percent overturn rate is evidence that the initial process is broken — and that the appeals channel is doing remediation work that the upstream decision architecture was never designed to require.”
Why this matters by function
The OIG’s paired post-acute PA reports are not a single-function compliance issue. They move across six areas of plan governance with distinct implications for each.
CMS will not build the oversight infrastructure. Plans must build their own.
The practical implication of CMS’s non-response to both sets of OIG recommendations is that plans cannot rely on federal benchmarking to validate their contractor oversight programs. They are operating a delegation monitoring function without an external reference standard for what acceptable contractor performance looks like.
That is not a compliance excuse. It is a compliance risk that demands internal resolution. Plans with delegated post-acute PA arrangements have a clear obligation under CMS’s FDR oversight framework to monitor contractor performance, set escalation thresholds, and document the governance response when performance deteriorates.
Who owns the response
| Function | Required response | Evidence to retain |
|---|---|---|
| Delegation Oversight / Vendor Management | Audit naviHealth and other post-acute PA contractors’ denial and overturn performance against internal baseline | Contractor performance reports, delegation agreements |
| Compliance | Confirm the FDR monitoring program tracks contractor-level PA denial and overturn rates by care setting, with a defined escalation threshold | Monitoring policy, escalation threshold documentation |
| Operations | Build a discrete nursing home resident sub-segment in PA denial and overturn reporting | Updated reporting specifications, sample reports |
| Internal Audit | Prepare a documentation trail showing governance awareness of contractor performance trends ahead of the next program audit | Committee minutes, corrective action records |
| Legal / Regulatory Affairs | Monitor CMS response to the OIG recommendation to collect contractor-level PA data | Tracking log of CMS guidance and OIG follow-up |
What health plans should do now
Within 7 days
- Map which post-acute care settings (SNF, LTACH, IRF) are processed by contractors versus internally, and document the contractual basis for each delegation.
- Review the naviHealth findings specifically if your plan has any delegated relationship with a UHG-affiliated utilization management entity.
Within 30 days
- Pull contractor-level denial and overturn rates by care setting for the past 12 months. Establish a baseline and compare against internal processing rates.
- Review whether nursing home residents appear as a discrete sub-segment in your current PA denial and overturn reporting. If not, create that view.
Within 60 to 90 days
- Define a quantitative escalation threshold. A contractor overturn rate above a defined level should automatically trigger root-cause review and documented corrective action.
- Document the governance response to current contractor performance data. In a program audit, CMS will expect evidence that the plan knew about denial and overturn trends, not merely that a delegation agreement existed.
PCOOB Weekly analysis
PCOOB Weekly’s assessment is that this pair of reports functions as an implicit enforcement roadmap, even without a CMS mandate attached. OIG findings this specific — a named contractor, a specific overturn rate, a specific enrollee sub-population — routinely resurface in later program audit fieldwork and enforcement activity, whether or not CMS ever acts on the paired recommendations. A plan that treats CMS’s non-concurrence as permission to defer action is reading the signal backward: the absence of a federal mandate does not reduce audit exposure, since ODAG reviewers can and do reference public OIG findings as a benchmark during fieldwork. The more defensible posture is to treat this month’s reports as the standard a plan will be measured against at its next program audit, regardless of whether CMS ever formalizes contractor-level data collection. This is PCOOB Weekly’s operational read of enforcement patterns, not a stated CMS position — CMS has not announced that OIG findings will be used this way in upcoming audits.
Questions leaders should ask now
- 1. OIG Report OEI-09-24-00331 — Medicare Advantage Organizations Overturned Nearly All Appealed Prior Authorization Denials for Skilled Nursing Facility Admission, Raising Concerns About Initial Denials (June 8, 2026)
- 2. OIG Report OEI-09-24-00330 — The Three Largest Medicare Advantage Organizations Denied Requests for Long-Term Acute Care and Inpatient Rehabilitation at Some of the Highest Rates (June 8, 2026)
- 3. OIG Report OEI-09-18-00260 — Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care (2022)
- 4. CMS Program Audits — Part C and Part D Compliance and Audits
- 5. CMS Part C and Part D Compliance and Audits Overview
Common questions about this edition
What did the June 2026 OIG reports find about Medicare Advantage prior authorization denials?
Two companion OIG reports published June 8, 2026 found that Medicare Advantage organizations overturned 95 percent of appealed skilled nursing facility prior authorization denials, and 36 to 43 percent of appealed long-term care hospital and inpatient rehabilitation facility denials, with one MAO’s IRF overturn rate reaching 86 percent.
Why does the 18 percent appeal rate matter more than the 95 percent overturn rate?
Only 18 percent of enrollees whose skilled nursing facility prior authorization was denied ever appealed. Because the large majority of appealed decisions were overturned, the 82 percent who did not appeal likely absorbed a wrong denial without ever reaching correction.
What role did naviHealth play in the OIG findings?
naviHealth, a contractor and UnitedHealth Group subsidiary, processed half of all skilled nursing facility prior authorization requests studied and had 97 percent of its denials overturned on appeal by the Medicare Advantage organization that owns it.
Did CMS agree with the OIG’s recommendations?
No. CMS did not concur or nonconcur with any of the five combined recommendations across the two reports, including the recommendation to begin collecting contractor-level prior authorization data.