AI and Algorithms Behind Surge in Medicare Advantage Care Denials

In spring 2023, the Senate Homeland Security Committee’s Permanent Subcommittee on Investigations (PSI) launched an inquiry into barriers Medicare Advantage (MA) enrollees face in accessing care. PSI requested data from Humana, UnitedHealthcare, and CVS (Aetna), who together insure nearly 60 percent of MA enrollees. The investigation focused on prior authorization (PA) requests and denials since 2019, examining claims that AI and algorithms were used to boost profits through these denials.

The report, released after reviewing more than 280,000 documents, reveals a systematic denial of post-acute care, such as home health services, skilled nursing, and long-term care hospital stays—vital services needed for recovery after hospital discharge. These denials left seniors vulnerable, forcing them to make difficult decisions about their health and finances.

Key findings from 2022 include:

• UnitedHealthcare and CVS denied PA requests for post-acute care at rates three times higher than their denial rates for other types of care.
• Humana had a denial rate for post-acute care 16 times higher than its overall denial rate.
• UnitedHealthcare’s PA denial rate for post-acute care rose from 10.9 percent in 2020 to 22.7 percent in 2022 as the company shifted to more automated processes.
• CVS’s denial rate for post-acute care was stable from 2019 to 2022, but PA requests surged by 57.5 percent.
• Humana denied 54 percent more PA requests for long-term acute care hospitals (the most expensive form of post-acute care) from 2020 to 2022.

The committee recommends that the Centers for Medicare and Medicaid Services (CMS) collect PA data based on care types, audit insurers, and regulate predictive technologies used in authorization processes. CMS acknowledged the report and is reviewing its findings, stating that future changes to MA policies would be introduced through rulemaking. The agency emphasized its ongoing efforts to ensure MA beneficiaries have timely access to medically necessary care.