# Why Are Medicare Advantage Plans Rarely Fined for Wrongful Denials?

> Medicare Advantage denials drew just $616,366 in CMS fines since 2021, a JAMA Health Forum study found. See why appeals matter and what practices should do.

Source: https://webillhealth.com/medicare-advantage-denials-penalties/  
Publisher: WeBill Health  
Last updated: November 3, 2026

Medicare Advantage plans paid just $616,366 in total fines for 22 wrongful denial or delay violations from September 2021 to early 2026. That is the finding of a JAMA Health Forum study published October 30, 2026. Every violation traced back to process or system errors. None of them cited a denial of medically necessary care.

## What did the new JAMA Health Forum study find?

CMS rarely fines these plans for bad denials, and when it does, the fines are small and tied to paperwork errors. A team at the Brown University School of Public Health ran the study. They reviewed every public CMS enforcement action against Medicare Advantage plans from September 17, 2021, to February 27, 2026.

They counted 66 violations in all, with total penalties of $3,890,210. Of those, 22 (33.3%) were for wrongful denials or delays of care or drugs. Those 22 cases drew $616,366 in penalties. The median fine was $15,080, and fines ranged from $5,336 to $285,476.

Billing mistakes on premiums and cost sharing drew far more money. Those 24 violations brought $3,014,768 in penalties, with a median of $33,988.

## Which kinds of denials led to penalties?

Most fined denials involved drugs. Only four involved medical services. Of the 22 denial violations, 16 involved Part D medications, 4 involved Part C services and 2 involved Medicare Medicaid Plans.

The researchers sorted the denial violations by type:

| Type of denial violation | Count |
|---|---|
| Formulary medications wrongly rejected or handled | 9 |
| Coverage requests, determinations or complaints wrongly denied, dismissed or processed | 7 |
| Improper denial notice | 3 |
| Failure to carry out an approved prior authorization | 2 |
| Other | 1 |

The fourth category matters most for practices. In two cases, a plan approved a prior authorization and then failed to honor it.

## Why were none of the fines about medical necessity?

CMS audits mostly check whether plans follow the steps, so they rarely judge whether a denied service was needed. The authors wrote that “All violations were attributed to procedural deficiencies and human or system processing errors.”

Workflow problems caused 7 cases and staff mistakes caused 5. Wrong enrollment data caused 4, and claims system setup errors caused 3. One came from a misread CMS rule, and 2 listed no cause.

The authors say audits built around procedure “may be less likely” to catch some denials. Those are the ones that need a close look at the chart. That gap is where many practices lose money.

## How does this compare with what the OIG found?

The OIG found real medical necessity problems that this enforcement record does not show. In an April 2022 report (OEI 09 18 00260), HHS OIG reviewed denials from 15 of the largest Medicare Advantage organizations. It found that 13% of prior authorization denials met Medicare coverage rules and likely would have been approved under Original Medicare.

The same report found that 18% of payment denials met both Medicare coverage rules and plan billing rules. OIG named two main causes for prior authorization denials. Plans used internal clinical criteria that Medicare does not require, such as an x ray before an MRI. Plans also claimed records were missing when the records in fact supported the service.

So the OIG saw medically necessary care being denied. CMS fines over four and a half years did not name a single such case.

## How common are Medicare Advantage denials?

Medicare Advantage plans denied 4.1 million prior authorization requests in 2024. KFF reported in January 2026 that plans made 52.8 million prior authorization decisions that year. They denied 7.7% in full or in part, up from 6.4% in 2023.

Only 11.5% of those denials were appealed. Yet 80.7% of appeals were overturned. Traditional Medicare, by contrast, used about 2 reviews per 100 beneficiaries.

Put the two studies together and a pattern appears. Plans deny millions of requests and lose most of the appeals they face, while federal fines for wrongful denials stay rare and small. For a practice, the appeal is the main defense its revenue has.

## What this means for practices with 1 to 15 providers

Small practices should plan as if no regulator will fix a bad denial for them. The plan will usually only reverse it if you push back. Here is how to act on these findings.

1. Appeal more often. With 80.7% of appeals overturned and only 11.5% of denials appealed, many practices leave money on the table. Set a rule: every Medicare Advantage denial over a set dollar amount gets an appeal.
2. Track approved authorizations. Two penalized cases involved plans that failed to honor approvals they had already given. Save the authorization number, date and approved units with every claim, so you can prove it if the claim denies anyway.
3. Match notes to Medicare coverage rules. Medicare Advantage plans must cover what Original Medicare covers. When a plan cites its own criteria, quote the relevant NCD or LCD in your appeal.
4. Push back on “missing records” denials. OIG found plans said records were missing when the chart supported the service. Send the exact pages, and keep proof of what you sent and when.
5. Watch for pharmacy pattern problems. Most penalized denials involved Part D drugs. If your patients keep hitting rejections for the same formulary drug, document each case and request a coverage determination.
6. Log denials by plan. Keep a simple sheet with plan, denial reason, code, dollar amount and outcome. Patterns tell you which plans to escalate and where your own documentation needs work.
7. File complaints when a plan breaks its own rules. Process errors are what CMS does penalize. A wrong denial notice or a missed approval is worth reporting.

Prior authorization rules also change on January 1, 2027. Read our guide on [what changes for prior authorization on January 1, 2027](https://webillhealth.com/prior-authorization-changes-2027/), and our summary of [the first WISeR prior authorization study](https://webillhealth.com/wiser-prior-authorization-study/) for Original Medicare.

## Frequently asked questions

### How much did CMS fine Medicare Advantage plans for wrongful denials?

A JAMA Health Forum study found $616,366 in total penalties for 22 inappropriate denial or delay violations from September 2021 to early 2026. The median fine was $15,080.

### What share of Medicare Advantage prior authorization requests are denied?

KFF found that plans denied 7.7% of 52.8 million prior authorization determinations in 2024, in full or in part. That is about 4.1 million denials.

### Are Medicare Advantage denial appeals worth filing?

Yes. KFF reported that 80.7% of appealed prior authorization denials were overturned in 2024, yet only 11.5% of denials were appealed.

### Do Medicare Advantage plans deny care that Medicare would cover?

Sometimes. A 2022 OIG report found that 13% of sampled prior authorization denials met Medicare coverage rules and likely would have been approved under Original Medicare.

### What can a practice do if a plan ignores an approved prior authorization?

Appeal the denial with the approval number and date attached. If the plan keeps doing it, file a complaint, since failing to honor approvals is one of the errors CMS has penalized.

### Why did CMS penalties not address medical necessity?

The study authors say CMS audits focus on procedural adherence. Those audits are less likely to catch denials that need a case by case review of medical necessity.

## Where should my practice start?

Start by finding out how many Medicare Advantage denials you wrote off last year that an appeal could have recovered. WeBill Health works as a revenue defense partner for independent practices. Before claims go out, our coding experts check them against internal payer rule libraries built by specialty and carrier. We hold a 98% clean claim rate. Request a [Revenue Health Audit](https://webillhealth.com/form/) and we will show you where denials are draining your collections and which ones are worth defending.

## Sources

* [Chen Z, Gadbois EA, Meyers DJ, Marr J, Dixit MN, Trivedi AN. Inappropriate Denials or Delays of Care or Medications by Medicare Advantage Organizations. JAMA Health Forum. 2026;7(10):e264015. Published online October 30, 2026.](https://jamanetwork.com/journals/jama-health-forum/fullarticle/2855661)
* [KFF: Medicare Advantage Insurers Made Nearly 53 Million Prior Authorization Determinations in 2024 (January 28, 2026)](https://www.kff.org/medicare/medicare-advantage-insurers-made-nearly-53-million-prior-authorization-determinations-in-2024/)
* [HHS OIG: Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care (OEI 09 18 00260, April 27, 2022)](https://oig.hhs.gov/reports/all/2022/some-medicare-advantage-organization-denials-of-prior-authorization-requests-raise-concerns-about-beneficiary-access-to-medically-necessary-care/)

WeBill Health is a specialty focused revenue cycle management partner for independent practices. Request a Revenue Defense Audit at https://webillhealth.com/form/