Private Medicare Plans Are Denying Rehab Care at Alarming Rates, New Analysis Shows

Millions of seniors rely on Medicare Advantage to help cover healthcare costs as part of their retirement plan. But a new report reveals that Medicare Advantage plans denied requests for rehabilitation and other types of post-hospital specialized care at an unusually high rate. Senior advocates are saying that the insurers are denying older adults the care they need in an effort to cut costs.

Here's what to know if you or a loved one is on a Medicare Advantage plan, especially if you may need hospitalization or are helping an aging parent navigate coverage.

Findings revealed in the report

A June 2026 report released by the Department of Health and Human Services Office of Inspector General (OIG) revealed that the major private for-profit insurance companies that administer Medicare Advantage plans denied more than half of the requests received for long-term care or rehabilitation. Though Medicare plans are run by the government, private insurers operate the Medicare Advantage plans. CVS Health/Aetna, Humana, and United Health Group are the three largest providers of Medicare Advantage plans. The three companies also had the highest rejection rates of all Medicare insurance providers.

The data on denials

According to the report, CVS Health denied 80% of requests for long-term care. Humana and UnitedHealth denied more than 70% of long-term care requests. In comparison, the 16 smaller providers included in the report rejected approximately 42% of long-term care requests.

The three larger insurance companies also had high denial rates for rehabilitative agency care. UnitedHealth rejected 66% of rehabilitation requests, and Humana and CVS Health/Aetna rejected more than half of the requests.

Department of Health and Human Services Assistant Inspector General Erin Bliss called the range of denials "pretty shocking."

Who's most affected by the denials

Seniors in need of long-term care hospitals, rehab facilities, or skilled nursing facilities are most affected by the high request denial rate. These seniors might have been hospitalized and need to transition to a facility where they could receive more supportive care before being able to return home. They might be recovering from significant injuries or medical issues, like a stroke, heart event, or serious fracture, and returning home might not be safe. In many cases, these seniors are finding that they're being denied the care they need.

The cost of post-hospital care

The report explains that long-term care hospitals are the most expensive post-hospital setting, costing an average of $49,000. Rehabilitation facility stays average $24,000, while skilled nursing costs an average of $16,000. If an older adult receives post-hospital care at home, the cost averages $6,000.

The supportive, specialized care available at rehabilitation facilities may also reduce rehospitalization rates, ultimately saving the insurance companies money. Studies have found that hospitals that partner with high-quality skilled nursing facilities have experienced significant readmission rate reductions, including a 20% drop in readmissions at Mount Sinai.

How prior authorization works

Prior authorization is a tool that's commonly used in the insurance industry, and Medicare Advantage plans require it for nearly all high-cost services. When prior authorization is required, providers must submit paperwork in advance to insurance companies. The paperwork needs to certify that the treatments are necessary, and insurers have the option to deny coverage of those services before they're performed.

While insurers state that prior authorization helps prevent unnecessary treatments and save money, senior care advocates and nursing industry professionals argue that prior authorization allows insurers to cut costs and deny care that older adults need.

The Senate investigation into post-acute care denials

A 2024 Senate investigation alleged that Medicare Advantage insurance companies were intentionally using prior authorizations to target and deny stays in post-hospital facilities. According to the report, between the years of 2019 and 2022, UnitedHealthcare, CVS, and Humana denied prior authorization requests relating to post-acute care at a much higher rate than the companies denied requests for other types of care.

The report indicated that the denials resulted "in diminished access to post-acute care for Medicare Advantage Beneficiaries."

In fact, UnitedHealth's denial of post-acute services increased from 8.7% to 22.7% over that four-year period, and UnitedHealth's denial rate for skilled nursing home care increased ninefold. The report highlights that the increases in denials coincided with the use of an algorithmic tool called nH Predict used to manage claim denials. CVS also used AI in a 2021 "Post-Acute Analytics" project to save money on skilled nursing facilities.

Bottom line

The for-profit Medicare Advantage plans showed a higher denial rate than nonprofit Medicare plans, meaning Medicare Advantage enrollees may have a harder time getting post-hospital care approved. CMS has announced that it won't enforce health equity analysis requirements for prior authorization under the current administration, meaning enrollees are left with fewer protections.

It's important to understand your plan's prior authorization rules in advance, before a health crisis forces you to rely on a prior authorization. The OIG's findings also suggest that appealing a denial is well worth the effort. According to the report, relatively few denied requests are ever appealed, yet the vast majority of those appeals are decided in the enrollee's favor. For skilled nursing facility denials specifically, 95% of appeals were overturned. Keep in mind that you may be able to appeal a denied request, and knowing how to make the right moves may help you access the care you need.