Federal investigators raised concerns about how Medicare Advantage plans handle requests for post-hospital recovery care, finding that many denials were later overturned on appeal. Two reports from the Office of Inspector General at the Department of Health and Human Services earlier this month found that Medicare Advantage insurers frequently denied requests for skilled nursing facilities, inpatient rehabilitation facilities and long-term care hospitals. The reviews focused on some of the largest insurers in the program, including UnitedHealth Group Inc., Humana Inc. and CVS Health Corporation.

One report found insurers denied about 13% of requests for skilled nursing facility care. About one in five patients appealed those denials, and nearly all were later approved. UnitedHealth, which handled the largest number of appeals, reversed 99.7% of its denials. Investigators said some initial denials may have resulted from incomplete medical records, but the high reversal rate suggested broader concerns about the review process. Because most patients never appealed, some may have gone home or missed specialized care altogether after receiving an initial denial.

The investigators said the high reversal rate raises questions about whether some patients faced unnecessary delays in receiving medically necessary care. "The dominance of a few large insurance companies in Medicare Advantage and the use of contractors to process prior authorization requests means that the policies and performance of just a few companies can impact care for millions of people," Rosemary Bartholomew, who led the government team, told The New York Times.

The second report also highlighted naviHealth, a UnitedHealth-owned care management company frequently used by Medicare Advantage plans. Investigators found it recorded higher denial rates than many other reviewers, particularly for inpatient rehabilitation requests. The second report found insurers denied roughly 54% of requests for inpatient rehabilitation facilities and 65% of requests for long-term care hospitals. Investigators also raised concerns about outside contractors used to review requests.

Denial and Reversal Statistics

The following table outlines the denial rates and appeal outcomes detailed in the reports:

Regulatory Context and Recommendations

The findings come as Medicare Advantage remains a major focus for regulators. In April, the Trump administration finalized a 2.48% increase in Medicare Advantage payment rates for 2027, adding more than $13 billion in payments to participating insurers, including UnitedHealth, Humana and CVS. The report also arrives amid broader healthcare oversight efforts. This week, Health Secretary Robert F. Kennedy Jr. and CMS Administrator Dr. Mehmet Oz warned hospitals to comply with federal price transparency requirements or face penalties, part of a wider push to strengthen enforcement and accountability across the healthcare system. Investigators urged CMS to collect more detailed data on denial rates and examine why so many initial denials are later overturned.

Mizuho analyst Ann Hynes has maintained an Outperform rating on UnitedHealth Group and increased the price target to $460 from $440. The adjustment reflects a revised outlook on the healthcare company's stock performance.

Rating and Price Action

The research note reaffirms the positive stance on UnitedHealth Group shares. The new price target of $460 represents an increase from the previous target of $440.