Author: Ronald Hirsch, MD, FACP, ACPA-C, CHCQM, CHRI | June 17, 2026
Today I have three U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) reports to discuss, but first, an update on the Wasteful and Inappropriate Service Reduction (WISeR) program.
Once again, it appears that Congress is not happy with the Centers for Medicare & Medicaid Services (CMS) program to pay artificial-intelligence (AI) companies to use their tools to review prior authorizations for a select list of services; they have added an amendment to the budget bill that would cease all funding for the program. To quote a letter from members of Congress to the U.S. House of Representatives Appropriations Committee, “It is also troubling that WISeR contractors, those actually doing the prior authorization, are compensated via a percentage of the dollar value of the services they deny. This payment mechanism clearly creates a perverse incentive to deny care, putting traditional Medicare beneficiaries at greater risk of not receiving needed care. Prior authorization has long been abused. It is bad for patients and providers.”
Now, to the OIG reports. Last week they released two reports looking at prior authorization denials by Medicare Advantage (MA) plans for care at skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), and long-term acute-care hospitals (LTACHs). And as you could probably guess, MA plans denied a lot of SNF requests.
Looking at June 2024, a total of 12 percent of all requests were denied. But even more shocking is that if the denial was appealed, 95 percent of the time, the denial was overturned. That includes a 99.7-percent overturn rate for UnitedHealthcare’s (UHC’s) 1,025 SNF denials.
And the numbers are no better for IRFs or LTACHs, with 54 and 65 percent of their respective requests denied. Appeals were also commonly overturned for them, with 36 percent of LTCH denials overturned and 43 percent of IRF denials overturned. And for all three types, it took an average of five days for an appeal to be reviewed, with CMS noting that “unnecessary or avoidable days spent in a hospital can mean a significant financial cost to hospitals that is not separately reimbursable.
Delayed discharges can also negatively affect patients’ psychological and social well-being and contribute to feelings of uncertainty and stress about their recovery and prognosis.”
The OIG made several recommendations to CMS to address these startling findings, but will anything change? Only time will tell.
The third OIG report was the first hospital review we have seen in a while, and Lehigh Valley Hospital in Pennsylvania was the lucky recipient. As usual, the OIG zeroed in on short inpatient admissions, finding an error rate of 42 percent.
I always hope that the OIG will give us worthwhile information on the denied cases, so we can better understand their interpretation of the Two-Midnight Rule, but once again I was disappointed. They gave details of one denied admission: a patient admitted for left-hip and lower-back pain with impaired ambulation.
The enrollee was treated and evaluated by a physician, then was discharged after assessment by an occupational therapist. While we have no other case details, that seems like a weak inpatient admission.
But the cases that Lehigh Valley presented in their rebuttal letter as admissions that should have been approved seemed to meet the case-by-case exception. For me, it once again calls into question the ability of the OIG contractor to properly interpret the rule and apply the correct exception. Because of that, I will continue to advocate for an explicit statement from the physician that the patient’s high risk or high severity or complexity warrants inpatient admission, rather than simply listing the risk or severity factors.
As I discussed last week, we shouldn’t have to alter our behaviors to meet the inappropriate actions of others, but it may just be a reality of our system.
This article was originally published on RACmonitor.
