Over 20% of Nursing Home Discharge Claims Denied as Health Care Providers Spend $19.7B for Reversal

Over 20% of claims requesting discharge to nursing homes for ongoing care and post-acute therapy were denied by private insurers.

That’s according to a recent survey conducted by Premier Inc., a group purchasing organization, which polled 516 acute-care hospitals about their 2022 claims.

Approximately 15% of all claims submitted to private payers for reimbursement were initially denied, the survey found. This denial rate includes 3.2% of claims that had already been preapproved through the prior authorization process. Also, 54.3% of the denials were later overturned.


In response to these findings, Premier and over 100 provider organizations urged the Centers for Medicare & Medicaid Services (CMS) to take a stricter stance on Medicare Advantage (MA) plans’ practices.

“To address these potentially dire impacts on Medicare beneficiaries and providers, we urge CMS to stringently monitor MA plans’ reporting of expenditures on direct patient care,” they wrote. “It is imperative that CMS leverage its full authority to ensure that MA plans’ medical loss ratio (MLR) requirements for revenue used for patient care are satisfied in alignment with the benefits to which Medicare beneficiaries are entitled.”

Another striking aspect revealed by the survey is the higher prevalence of denials for higher-cost treatments, with the average denial associated with charges of $14,000 and above.


These denials can lead to increased administrative costs for providers and potential financial burdens for patients, impacting their access to timely care, operators wrote. Notably, discharges to skilled nursing facilities faced significant coverage denials from MA plans.

The survey also exposed the financial toll on providers due to denied claims. Providers spent an average of $43.84 per claim to appeal these denials, contributing to $19.7 billion spent annually across the healthcare industry on claim review processes. Of this amount, approximately $10.6 billion pertains to arguing over claims that should have been paid initially.

The operators also noted the negative impact of claim denials on hospital quality ratings, patient satisfaction, and reimbursement under value-based payment models. They urged CMS to monitor MA plans’ expenditures on direct patient care, collect data on payment delays and denials, and enforce regulations to ensure Medicare beneficiaries receive their entitled benefits.

“We recommend that CMS return to its past policy of weighting patient experience and access measures more heavily in the MA Star Ratings methodology, empowering beneficiaries to hold their health plans financially accountable,” they wrote.

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