OIG: Medicare Advantage Plans Block Rehab Care for Profit

Private Medicare plans are erecting barriers to rehabilitation care for older adults, then frequently reversing those denials when patients fight back, according to a federal investigation reported by STAT News.

The Office of Inspector General found that Medicare Advantage insurers block access to post-acute rehab services, the kind of care patients often need to recover after a hospital stay, in ways that appear designed to protect profits. The telling detail is what happens on appeal: insurers reverse a meaningful share of the denials they issued, suggesting the original refusals were not grounded in medical necessity. For frail patients, the delay alone can derail recovery, and many never appeal at all.

The findings add to mounting federal scrutiny of Medicare Advantage utilization management, where prior authorization and denial practices have drawn criticism from regulators and lawmakers. Plans collect fixed payments per enrollee, creating a financial incentive to limit costly services. Expect continued pressure for tighter rules on how and when these plans can say no.