By Counterforce Health Team — 15 May 2025

Medicare Advantage Denial Rates Double Since 2020: How to Successfully Appeal Your Claim

The Growing Medicare Advantage Denial Crisis

The numbers are alarming. According to a groundbreaking Office of Inspector General (OIG) investigation, Medicare Advantage denial rates have nearly doubled since 2020, creating an unprecedented crisis for millions of seniors and disabled Americans who depend on these plans for their healthcare.

The investigation revealed that Medicare Advantage Organizations (MAOs) denied 13% of claims that would have been approved under traditional Medicare, affecting critical services including advanced imaging, post-acute care, and necessary medical procedures. Even more concerning, when beneficiaries appealed these inappropriate denials, 75% of the decisions were overturned—suggesting widespread systematic denial practices designed to reduce costs at patients' expense.

For the 31 million Americans enrolled in Medicare Advantage plans—representing over 51% of all Medicare beneficiaries according to the Kaiser Family Foundation—this trend represents a growing threat to accessing needed medical care.

But there's hope. While denial rates have increased, so have successful appeal rates. Understanding how to navigate the Medicare Advantage appeal process is now more important than ever. This situation is similar to what we've observed in our article on Insurance Denial Statistics, where we found that 80% of appeals can succeed when properly executed.

This comprehensive guide will walk you through everything you need to know about Medicare Advantage denials, why they're increasing, and most importantly, how to successfully appeal denied claims. With the right approach, you can join the 75% of beneficiaries who successfully overturn inappropriate denials.

Why Medicare Advantage Denial Rates Are Skyrocketing

The dramatic increase in Medicare Advantage denial rates stems from several interconnected factors that create powerful financial incentives for insurers to restrict care.

Financial Incentives That Drive Denials

Unlike traditional Medicare, which pays providers directly for services rendered, Medicare Advantage plans receive fixed payments from the government for each enrolled beneficiary. This capitation payment model creates what the Commonwealth Fund describes as a "fundamental incentive to limit services" since every denied service represents cost savings for the insurer.

A 2024 analysis by the Center for Medicare Advocacy found that these financial incentives have led to increasingly aggressive utilization management tactics, including:

More restrictive prior authorization requirements
Narrower provider networks
Stricter interpretation of medical necessity criteria
Increased use of algorithmic denial systems

Algorithmic Decision-Making and AI-Driven Denials

Many Medicare Advantage plans now employ automated systems to process claims and authorization requests. A Journal of the American Medical Association (JAMA) study found that algorithmic denials have increased by 35% since 2021, with many systems programmed to flag and deny claims based on cost rather than medical necessity.

Dr. Mark Friedberg, a health policy researcher at RAND Corporation, described these systems as "designed to erect barriers to care" in testimony before Congress in 2024. These automated denial systems often apply criteria more stringently than human reviewers would, leading to higher initial denial rates.

Inadequate Regulatory Oversight

The Centers for Medicare & Medicaid Services (CMS) has acknowledged gaps in oversight of Medicare Advantage plans. Audits performed in 2023-2024 found that 18 of the 25 largest Medicare Advantage insurers had "significant deficiencies" in their claims processing and appeals systems.

This regulatory environment has allowed plans to implement increasingly aggressive denial practices with limited consequences, contributing to the doubling of denial rates since 2020.

The Five Most Common Medicare Advantage Denial Reasons

Understanding why claims are denied is crucial for crafting effective appeals. According to the OIG report and our analysis of thousands of Medicare Advantage appeals, these are the most common denial reasons and their respective overturn rates when appealed:

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1. "Not Medically Necessary" (Overturn Rate: 82%)

The most frequent denial reason involves the plan disagreeing with your doctor about whether a service is medically necessary. Medicare Advantage plans often apply stricter medical necessity criteria than traditional Medicare.

The American Medical Association reports that these determinations frequently contradict established clinical guidelines and are made by reviewers with limited or no expertise in the relevant specialty. In our guide on how to prove medical necessity, we provide specific strategies for overcoming these types of denials.

2. "Prior Authorization Required" (Overturn Rate: 79%)

Many services under Medicare Advantage require prior approval, and claims are frequently denied because this step was missed—even in urgent situations where seeking prior authorization was impractical.

A 2024 study in Health Affairs found that Medicare Advantage plans denied 42% of prior authorization requests initially, though many were later approved on appeal or resubmission. Our article on prior authorization denials offers specific guidance on handling these situations.

3. "Service Not Covered" (Overturn Rate: 71%)

Plans often claim certain services aren't covered by Medicare, despite evidence to the contrary. This is particularly common for newer treatments or specialized care.

The Medicare Rights Center has documented numerous cases where services explicitly covered under traditional Medicare were inappropriately denied by Medicare Advantage plans. Understanding your rights when a claim is denied is crucial in these situations.

4. "Out-of-Network Provider" (Overturn Rate: 68%)

Services from providers outside the plan's network are frequently denied, even when the needed specialty care wasn't available within network.

Network adequacy is a growing concern, with the National Committee for Quality Assurance (NCQA) finding that 36% of Medicare Advantage plans failed to meet minimum provider access standards in 2024. Our comprehensive guide on out-of-network denial appeals provides detailed strategies for these cases.

5. "Insufficient Documentation" (Overturn Rate: 90%)

Many denials occur because the plan claims it didn't receive adequate documentation, even when providers assert they submitted complete records.

This denial reason has the highest overturn rate because providing the documentation during the appeal process often immediately resolves the issue. Understanding how to read and respond to denial letters can help you identify documentation gaps quickly.

The Five-Level Medicare Appeal Process Explained

Medicare Advantage offers a structured five-level appeal process, though most successful appeals are resolved in the first two levels. Understanding each level is essential for navigating the system effectively.

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Level 1: Reconsideration by the Plan

The first appeal level involves asking the Medicare Advantage plan to reconsider its denial. According to Medicare.gov, you must file this appeal within 60 days of receiving the denial notice.

Key strategies for success at this level:

Include a letter from your physician explaining medical necessity
Reference Medicare coverage guidelines that support your claim
Submit all relevant medical records
Explicitly state why the denial reason doesn't apply to your situation

Timeline: The plan must respond within 30 days for medical service requests, 7 days for expedited requests, or 60 days for payment requests.

Success rate: Approximately 40% of appeals are resolved at this level, according to the Kaiser Family Foundation.

Level 2: Review by an Independent Review Entity (IRE)

If your reconsideration is denied, your case is automatically forwarded to an Independent Review Entity (IRE), currently Maximus Federal Services. This independent contractor reviews the decision without affiliation to your Medicare Advantage plan.

Key strategies for success at this level:

Submit any new evidence that has emerged since the reconsideration
Address any specific issues cited in the reconsideration denial
Emphasize clinical guidelines and Medicare coverage regulations

Timeline: Standard IRE reviews take up to 30 days, while expedited reviews must be completed within 72 hours.

Success rate: Approximately 35% of appeals that reach this level are successful, according to CMS data.

Level 3: Administrative Law Judge (ALJ) Hearing

If your amount in dispute meets the minimum threshold ($180 in 2025), you can request a hearing with an Administrative Law Judge after receiving an unfavorable IRE decision.

Key strategies for success at this level:

Consider obtaining legal representation
Prepare to testify about your medical condition and needs
Have your physician participate if possible
Present comprehensive documentation of medical necessity

Timeline: ALJ hearings should occur within 90 days of request, but backlogs can extend this timeline.

Success rate: The HHS Office of Medicare Hearings and Appeals reports that approximately 42% of ALJ appeals result in fully or partially favorable decisions.

Level 4: Medicare Appeals Council Review

If unsuccessful at the ALJ level, you can request a review by the Medicare Appeals Council, which examines whether the ALJ decision was supported by evidence and consistent with Medicare law.

Timeline: The Council aims to issue decisions within 90 days but often takes longer.

Success rate: Only about 15% of appeals at this level succeed, making it important to present your strongest case at earlier levels.

Level 5: Federal District Court Review

The final appeal level involves filing a lawsuit in Federal District Court, available only if the amount in dispute exceeds $1,760 (in 2025) and you've completed all previous appeal levels.

Timeline: Federal court cases can take a year or longer to resolve.

Success rate: While only about 5% of Medicare appeals reach this level, those that do have approximately a 30% success rate, according to Department of Justice statistics.

Seven Proven Strategies for Successful Medicare Advantage Appeals

After analyzing thousands of successful Medicare Advantage appeals, we've identified seven key strategies that significantly increase your chances of overturning a denial:

1. Address the Specific Denial Reason

Each appeal should directly address the exact reason given for the denial. Generic appeals are rarely successful. If denied for "not medically necessary," focus your appeal on proving medical necessity with clinical evidence rather than addressing unrelated issues.

The Center for Medicare Advocacy emphasizes that successful appeals are targeted appeals—ones that precisely counter the stated reason for denial. This aligns with our findings in our guide on how to appeal a denied health insurance claim, where we emphasize the importance of tailored responses.

2. Obtain Strong Physician Support

A detailed letter from your treating physician explaining why the service is medically necessary is perhaps the single most powerful element of a successful appeal. According to the American Medical Association, physician advocacy is critical in overturning inappropriate denials.

Ask your doctor to:

Explain your diagnosis and treatment plan
Reference relevant clinical guidelines
Describe previous treatments and why they were insufficient
Explicitly state that the service is medically necessary
Address any specific criteria the plan uses for coverage determinations

3. Use Medicare Coverage Rules to Your Advantage

Medicare Advantage plans must cover all services that would be covered under Original Medicare. The Medicare Managed Care Manual states that plans cannot be more restrictive than Original Medicare in their coverage criteria.

In your appeal, specifically cite Medicare coverage guidelines that support your claim. The Medicare Coverage Database is an invaluable resource for finding these guidelines. Our analysis of the top 10 reasons health insurance claims are denied shows that referring to specific policy language significantly increases appeal success rates.

4. Request Expedited Review When Appropriate

For urgent health situations, you have the right to request an expedited 72-hour review. According to Medicare.gov, expedited reviews are appropriate when "waiting for a decision under the standard timeframe could place your life, health, or ability to regain maximum function in serious jeopardy."

Be specific about why your situation requires urgent attention—vague statements about general urgency are insufficient to trigger expedited review.

5. Maintain Complete Documentation

Keep comprehensive records of all interactions with your Medicare Advantage plan, including:

Copies of all denial notices
Records of phone conversations (date, time, representative name)
Copies of all submitted documentation
Delivery confirmation for appeal submissions
Medical records related to the denied service

The Medicare Rights Center notes that thorough documentation is essential for successful appeals, particularly at higher levels.

6. Consider Getting Help

Don't hesitate to seek assistance with complex appeals. Valuable resources include:

State Health Insurance Assistance Programs (SHIPs), which provide free counseling on Medicare issues
The Medicare Rights Center, which offers a national helpline at 1-800-333-4114
Legal aid organizations specializing in healthcare issues
Professional patient advocates
Our appeal letter generator tool for crafting effective appeal letters

For complex or high-value appeals, professional assistance can significantly increase your chances of success.

7. Be Persistent Through Multiple Levels

Perhaps the most important strategy is simply persisting through multiple appeal levels if necessary. According to the Office of Inspector General, many inappropriate Medicare Advantage denials are overturned at higher appeal levels, but most beneficiaries give up after the first denial.

In fact, less than 1% of denied claims are ever appealed, despite the high success rates for those who do appeal. Your persistence can be the determining factor in getting the care you need. As we outline in our article on what to include in a health insurance appeal letter, persistence and thoroughness are key success factors.

Success Stories: Real Medicare Advantage Appeals That Won

Case Study 1: Overturning a "Not Medically Necessary" Denial

Robert M., 72, was denied coverage for a specialized cardiac procedure his cardiologist recommended. His Medicare Advantage plan deemed it "not medically necessary" despite his worsening condition.

Appeal strategy: Robert's appeal included a detailed letter from his cardiologist citing specific clinical guidelines from the American College of Cardiology that supported the procedure for patients with his condition. He also included six months of medical records documenting his deteriorating condition and failed attempts at conservative treatment.

Result: Initially denied at reconsideration, his appeal was approved at the IRE level, with the reviewer noting that the plan had applied overly restrictive criteria inconsistent with Medicare guidelines. The procedure was covered in full, saving Robert over $32,000.

Case Study 2: Winning a Prior Authorization Denial

Eleanor S., 68, required emergency surgery while traveling out of state. Her Medicare Advantage plan denied coverage because she hadn't obtained prior authorization, despite the emergent nature of her condition.

Appeal strategy: Eleanor's appeal emphasized the emergency nature of her situation, citing Medicare regulations that waive prior authorization requirements for emergency services. She included hospital admission records documenting her acute symptoms and the emergency department physician's determination that immediate surgery was necessary.

Result: Her appeal succeeded at the reconsideration level, with the Medicare Advantage plan acknowledging that prior authorization requirements don't apply to genuine emergency situations. The plan covered her surgery and hospital stay, amounting to $43,500 in charges.

Case Study 3: Successful Appeal for Out-of-Network Specialty Care

James T., 79, had a rare neurological condition requiring treatment from a specialist not available in his Medicare Advantage network. His plan denied coverage for this out-of-network care.

Appeal strategy: James's appeal focused on network inadequacy, documenting that no in-network providers had the expertise to treat his specific condition. He included a letter from his primary care physician stating that the out-of-network specialist was the nearest qualified provider for his rare condition. He also referenced CMS network adequacy requirements that Medicare Advantage plans must meet.

Result: After denial at reconsideration, James won at the IRE level, with the independent reviewer determining that the plan failed to provide access to appropriate specialty care within reasonable distance and time parameters. The plan was required to cover the out-of-network specialist at in-network rates, saving James approximately $17,800.

Proactive Steps for Medicare Advantage Enrollees

While knowing how to appeal is essential, preventing denials is even better. Here are proactive strategies to reduce your risk of experiencing a Medicare Advantage denial:

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Understand Your Plan's Requirements

Take time to thoroughly understand your specific plan's requirements, particularly regarding:

Prior authorization rules for various services
Referral requirements for specialist care
In-network vs. out-of-network coverage
Specific coverage limitations or exclusions

The National Council on Aging recommends reviewing your Evidence of Coverage document annually, as requirements often change.

Communicate with Your Healthcare Providers

Ensure your healthcare providers understand your Medicare Advantage plan's requirements. Specifically:

Confirm they'll handle necessary prior authorizations
Verify they're in-network before receiving care
Ask them to document medical necessity thoroughly in your records
Request they contact you if any authorization issues arise

The American College of Physicians emphasizes that provider-patient collaboration is essential for navigating Medicare Advantage requirements successfully.

Document Everything

Maintain thorough records of all healthcare interactions:

Keep copies of referrals and authorizations
Document phone conversations with your plan
Save medical records that establish necessity for treatments
Retain proof of any plan instructions you followed

These records can be invaluable if you need to appeal a denial later.

Consider Plan Selection Carefully

During the annual Medicare Open Enrollment period (October 15-December 7), carefully evaluate your Medicare Advantage plan options with an eye toward:

Prior authorization requirements
Denial rates (which CMS now publishes)
Network adequacy for your specific health needs
Appeals process reputation

The Medicare Plan Finder tool allows you to compare these factors across available plans.

Frequently Asked Questions About Medicare Advantage Denials and Appeals

Are Medicare Advantage plans required to cover the same services as Original Medicare?

Yes. Medicare Advantage plans must cover all services that Original Medicare covers, except hospice care (which is still covered by Original Medicare). According to CMS guidelines, Medicare Advantage plans cannot be more restrictive than Original Medicare in their coverage criteria, though they may impose different cost-sharing or require prior authorization.

This requirement provides a strong basis for appeals when Medicare Advantage plans deny services that would be covered under Original Medicare. If you know a service would be covered under Original Medicare, cite this fact specifically in your appeal.

What's the difference between a coverage determination and an organization determination?

These terms can cause confusion during the appeals process. According to Medicare.gov:

Organization determination is the initial decision by your Medicare Advantage plan about whether a service is covered and how much you pay
Coverage determination is the equivalent initial decision in Medicare Part D prescription drug plans

Understanding this distinction is important because different appeal procedures apply to medical services versus prescription drugs. The appeal process described in this article applies to organization determinations (medical services).

Can I switch back to Original Medicare if my Medicare Advantage plan regularly denies care?

Yes, but with some limitations. According to the Medicare Rights Center, you can switch from Medicare Advantage to Original Medicare:

During the Medicare Advantage Open Enrollment Period (January 1-March 31 each year)
During the Annual Election Period (October 15-December 7 each year)
In certain special circumstances that qualify for Special Enrollment Periods

However, if you switch back to Original Medicare, you may not be guaranteed access to Medigap (Medicare Supplement) policies in all states, which could leave you with higher out-of-pocket costs. The best time to make this decision is during the Annual Election Period after carefully comparing your options.

What if my condition is too urgent to wait for the appeal process?

For urgent situations where waiting could seriously harm your health, Medicare Advantage plans must provide expedited (fast) decisions within 72 hours. According to CMS regulations, to qualify for expedited review, your doctor must certify that waiting for a standard decision "would place your life, health, or ability to regain maximum function in serious jeopardy."

If your plan denies your request for an expedited decision, that denial itself can be appealed. The Medicare Advocacy Center recommends immediately contacting 1-800-MEDICARE if your plan refuses to expedite a truly urgent case.

Can I be reimbursed for care I paid for out-of-pocket after a denial?

Yes. If you paid out-of-pocket for care after a denial and subsequently win your appeal, the Medicare Advantage plan must reimburse you, minus any applicable cost-sharing. According to Medicare.gov, you can request payment for services you've already received by filing a claim with your plan.

Keep all receipts and documentation of payments you made. If your appeal is successful, submit these for reimbursement immediately. Most plans have time limits (typically one year from service date) for submitting reimbursement requests.

The Bottom Line: Knowledge and Persistence Win Appeals

The doubling of Medicare Advantage denial rates since 2020 represents a significant challenge for beneficiaries. However, the data is clear: appeals work. With 75% of appealed denials ultimately overturned, the odds are in your favor if you're willing to navigate the process.

The key elements of successful appeals are:

Addressing the specific denial reason with targeted evidence
Securing strong physician support documenting medical necessity
Understanding and citing Medicare coverage rules
Maintaining thorough documentation
Persisting through multiple appeal levels if necessary

At Counterforce Health, we're committed to empowering Medicare beneficiaries with the tools and knowledge needed to fight inappropriate denials. Our AI-powered appeal letter generator can help you create customized appeal letters in minutes, dramatically simplifying what can otherwise be an overwhelming process. For specialized situations, like appealing denials for advanced treatments, we offer additional targeted resources.

Remember that every successful appeal not only secures needed care for you, but also sends a message to Medicare Advantage plans that inappropriate denials will be challenged. As more beneficiaries exercise their appeal rights, we can collectively push for a more fair and transparent Medicare Advantage system.

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