Federal Watchdog: Many Medicare Advantage Denials Overturned on Appeal

The Office of Inspector General (OIG) at the U.S. Department of Health and Human Services released two reports raising concerns about how Medicare Advantage plans handle requests for post-hospital recovery care. The reports found that many initial denials are later reversed on appeal, suggesting that patients may be improperly denied coverage.

Details of the Action

The reports, published on June 12, 2026, examined decision-making processes in Medicare Advantage plans offered by major insurers such as UnitedHealth Group (UNH) and CVS Health (CVS). The findings showed that a significant proportion of denials for skilled nursing facility care or home health care after hospitalization were overturned upon appeal, indicating that patients were eligible for those services in the first place.

Company Response

Neither UnitedHealth Group nor CVS Health has issued an official comment on the reports yet. However, companies are expected to respond within the OIG's designated timeframe. Insurers typically defend their medical review processes, stating they aim to ensure only appropriate care is provided.

Precedents and Context

This is not the first time Medicare Advantage plans have faced scrutiny. Previous reports have raised concerns about inappropriate denial of coverage. Additionally, class-action lawsuits have been filed against some insurers for allegedly denying claims unlawfully.

Potential Financial Impact

If these findings lead to regulatory changes or lawsuits, insurers could face additional costs from claim settlements or fines. They may also need to adjust their medical review processes, increasing operational expenses. In the long term, this could affect profit margins in the Medicare Advantage segment, a key growth driver for companies like UNH and CVS.