Medicare Advantage Claim Denials and the Narrow Path to a Legal Remedy Under Federal and Oklahoma Law

A practitioner’s overview | Reams Law | August 2026

Think twice before enrolling in Medicare Advantage. Many beneficiaries sign up, being told how wonderful Medicare Advantage is. But as the undersigned has learned first-hand, once a beneficiary makes a claim for desperately needed care, which is high-cost, the commercial insurer of a Medicare Advantage Plan can callously deny the claim, placing beneficiary and their families in a nightmarish circle of “appeals,” subsequent denials, hours on the phone with no answers, and further appeals, with no end in sight. A beneficiary may not even be able to get a decision-maker on the phone. This kind of outrageous behavior would normally give rise to insurance bad faith claims. However, the road is long and difficult to pursue legal claims against those administering a Medicare Advantage Plan.

More than half of all Medicare beneficiaries are now enrolled in Medicare Advantage (MA), the privately administered alternative to traditional fee-for-service Medicare. In 2026, roughly 35.2 million people—about 55% of the eligible Medicare population—receive their benefits through an MA plan operated by a commercial insurer. That shift has been accompanied by a steady drumbeat of federal reports, investigative journalism, and litigation alleging that MA insurers deny medically necessary care at troubling rates, increasingly with the help of predictive algorithms. For lawyers, the natural question follows: when an MA plan wrongfully denies a covered service, what can the enrollee actually do about it—and against whom?

The short answer is that the enrollee’s remedies are far narrower than the equivalent remedies against an ordinary private health insurer. This article surveys the denial data, then works through why the familiar state-law toolkit—insurance bad faith, fraud, and breach of contract—is largely unavailable against the MA organization itself under federal preemption and administrative-channeling doctrines, and finally examines the more open (and more fact-dependent) question of whether an enrollee may have a claim against the insurance agent who sold the plan.

I. The Denial Problem: What the Reports Show

The federal watchdog findings

The foundational document is the HHS Office of Inspector General’s April 2022 report, Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care (OEI-09-18-00260). Reviewing a stratified sample of denials from the fifteen largest MA organizations, OIG found that 13% of prior-authorization denials were for services that actually met Medicare coverage rules—that is, care the enrollee was entitled to but was refused—and that 18% of payment denials met both Medicare coverage and MA billing rules. The report attributed the denials in part to MA organizations applying clinical criteria stricter than traditional Medicare, with advanced imaging and post-acute care among the most frequently implicated services.

OIG returned to the theme in June 2026 (OEI-09-24-00331), reporting that MA organizations denied roughly 12% of skilled-nursing-facility admission requests but overturned about 95% of those denials on appeal—a reversal rate that, standing alone, suggests a substantial share of the initial denials lacked merit.

The Senate investigation and the rise of algorithmic denial

In October 2024, the U.S. Senate Permanent Subcommittee on Investigations released Refusal of Recovery: How Medicare Advantage Insurers Have Denied Patients Access to Post-Acute Care, focused on the three largest MA insurers—UnitedHealthcare, Humana, and CVS/Aetna—which together cover roughly 60% of MA enrollees. The Subcommittee reported that UnitedHealthcare’s denial rate for post-acute care rose from about 8.7% in 2019 to 22.7% in 2022, and that denials for skilled-nursing care increased sharply as the company leaned on the nH Predict algorithm (through its naviHealth subsidiary). Humana’s denial rate for long-term acute-care hospital stays rose 54% between 2020 and 2022, and CVS/Aetna’s internal projections for its “Post-Acute Analytics” initiative grew to an estimated $77.3 million in savings—figures the Subcommittee cited as evidence that denials were financially, not clinically, driven.

Investigative reporting has reinforced the picture. STAT News reported in November 2023 that naviHealth case managers were pressed to keep patient stays within roughly 1% of the algorithm’s projected length, and ProPublica’s reporting on Cigna’s “PxDx” system described physicians spending seconds per file while denying claims in bulk. These accounts have since become the factual core of a wave of class-action litigation, discussed in Part III.

II. The Numbers: National Volume and Per-Company Denials

The most reliable national dataset comes from KFF’s analysis of CMS prior-authorization data. For 2024, MA insurers made 52.8 million prior-authorization determinations and denied 4.1 million of them (a 7.7% denial rate), up from 6.4% in 2023. Critically, only 11.5% of denials were appealed—but of those that were, 80.7% were overturned in the enrollee’s favor. The gap between a low appeal rate and a high reversal rate is the single most important statistic for a practitioner: it implies a large reservoir of wrongful denials that are simply never challenged.

A caution on scope: the KFF figures capture prior authorizations only, not post-service claim denials, which are more numerous. And there is no clean, publicly published, MA-only annual total from the CMS Complaints Tracking Module (CTM); the best available public figure—roughly 78,000 complaints escalated to plans in 2022—combines Medicare Advantage and Part D and is widely regarded as an undercount, because most beneficiaries never file a complaint at all. Any single “complaints per year” number should therefore be cited with care.

Selected company-level figures (denial rates are KFF’s 2024 prior-authorization rates unless noted):

* CVS/Aetna’s rate is KFF’s 2022 figure; the company was not separately broken out in the same 2024 KFF denial-rate table. Market-share figures are KFF’s 2026 enrollment estimates. “Blue Cross Blue Shield” is not a single company—Elevance operates Anthem BCBS plans in 14 states, and numerous independent Blues offer MA plans separately.

III. Do MA Enrollees Have State-Law Claims Against the Insurer?

Against an ordinary private health insurer, an Oklahoma policyholder wrongfully denied a covered benefit would have a familiar menu of claims: breach of contract, common-law fraud, and—Oklahoma being a strong bad-faith jurisdiction—the tort of breach of the implied covenant of good faith and fair dealing recognized in Christian v. American Home Assurance Co., 1977 OK 141, 577 P.2d 899, with its potential for consequential and punitive damages. In the Medicare Advantage context, however, two independent federal doctrines close most of those doors.

A. Express preemption: 42 U.S.C. § 1395w-26(b)(3)

The Medicare Act provides that “[t]he standards established under this part shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to MA plans which are offered by MA organizations under this part.” 42 U.S.C. § 1395w-26(b)(3); see also 42 C.F.R. § 422.402. Before the 2003 Medicare Modernization Act, this clause preempted state law only where it was inconsistent with a federal requirement—ordinary conflict preemption. The MMA rewrote it into its current sweeping form, and courts now read it as something close to field preemption: wherever CMS has established a “standard” governing MA benefits, coverage, marketing, or appeals, parallel or duplicative state-law duties are displaced—even a state duty that merely mirrors the federal one.

The Tenth Circuit has not applied the clause to a private bad-faith or fraud suit, but its most relevant decision, Pharmaceutical Care Management Ass’n v. Mulready, 78 F.4th 1183 (10th Cir. 2023), struck down Oklahoma pharmacy-network legislation as applied to Medicare Part D, describing the Medicare preemption provision as operating “akin to field preemption.” Because Part D shares the same preemption standard as Part C (42 U.S.C. § 1395w-112(g)), Mulready is a strong signal of how the Tenth Circuit would view state-law incursions on MA plans—though, as a regulatory-preemption case, it is persuasive rather than directly on point.

B. How courts apply preemption to denial claims

The leading circuit decision is Do Sung Uhm v. Humana, Inc., 620 F.3d 1134 (9th Cir. 2010). The Ninth Circuit split the enrollees’ claims into two buckets: state consumer-protection and common-law fraud claims premised on plan marketing were expressly preempted (because CMS reviews and approves MA communications), while the breach-of-contract and unjust-enrichment claims were, in substance, “claims for benefits” that had to be channeled through the administrative process. Uhm is the template most courts follow: fraud and marketing theories tend to be preempted, while benefit-recovery theories tend to be barred for failure to exhaust.

The most authoritative recent state-high-court treatment is Quishenberry v. UnitedHealthcare, Inc., 14 Cal. 5th 1057 (2023), where the California Supreme Court held negligence, wrongful-death, and elder-abuse claims against an MA plan preempted because resolving them would “turn on” whether the enrollee qualified for additional skilled-nursing care under Part C. The court held the clause reaches both statutory and common-law duties and rejected the notion that duplicative state duties escape preemption. Its California Court of Appeal predecessor, Roberts v. United Healthcare Services, Inc., 2 Cal. App. 5th 132 (2016), reads the clause the same way. A properly framed Oklahoma bad-faith claim—which asks whether the insurer’s denial was “unreasonable”—runs squarely into this wall, because measuring reasonableness necessarily requires applying Medicare’s coverage standards.

C. Administrative channeling and exhaustion: §§ 405(g), 405(h)

Preemption is only the first barrier. The Medicare Act incorporates 42 U.S.C. §§ 405(g) and 405(h) through 42 U.S.C. § 1395ii. Section 405(h) bars federal-question jurisdiction over any claim “arising under” the Act and makes the administrative process the exclusive route; § 405(g) then supplies the only path to court, after a “final decision.” In Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1 (2000), the Supreme Court held that § 405(h) channels virtually all Medicare-related claims through this process, with only a narrow exception (from Bowen v. Michigan Academy) where channeling would foreclose review entirely. See also Heckler v. Ringer, 466 U.S. 602 (1984). Because a wrongful-denial suit is at bottom a claim for benefits, it must run the MA appeal ladder first:

1. Organization determination — the plan’s initial coverage or payment decision.
2. Reconsideration by the plan (generally filed within 65 days).
3. Independent Review Entity (IRE) — automatic independent review of an adverse reconsideration.
4. ALJ hearing at HHS OMHA (2026 amount-in-controversy threshold: $200).
5. Medicare Appeals Council review.
6. Federal district court under § 405(g) (2026 threshold: $1,960).

This is a separate bar from preemption: even a claim that survives preemption—like the contract claim in Uhm—still fails if the enrollee has not exhausted. And there is no implied private right of action under the Medicare Act to recover wrongfully denied benefits outside this framework. The enrollee’s true “federal claim” is the appeal.

IV. If Not Bad Faith—Then What? The Narrow Survivors

The blanket statement that “everything is preempted” is too strong. Courts have carved out—or at least left open—three categories where a claim may survive, and the frontier is actively moving.

• Pure contract interpretation. In Estate of Gene B. Lokken v. UnitedHealth Group, Inc., No. 0:23-cv-03514 (D. Minn. Feb. 13, 2025)—the naviHealth AI class action—the court dismissed the statutory bad-faith, unjust-enrichment, and unfair-practices counts as preempted but allowed breach of contract and breach of the implied covenant to proceed, reasoning that those claims “only require interpretation of contractual terms,” not application of a Medicare standard. It is a district-court ruling on a motion to dismiss—persuasive, not settled—but it shows plaintiffs pushing at the margin.
• Negligent delivery of care (vs. the coverage decision). Quishenberry and Roberts both signal that a direct medical-negligence claim against a provider for how care was rendered is conceptually distinct from a claim attacking the plan’s coverage determination—though the line blurs where a delegated administrator both decides coverage and shapes care.
• Fraud untethered from CMS-approved materials. Uhm preempted marketing-fraud claims because CMS pre-approves the materials; a fraud theory genuinely disconnected from the regulated marketing and coverage scheme may fall outside “with respect to MA plans.” This lane is narrow and fact-dependent.

The practical takeaway for counsel: ordinary bad-faith and breach claims for a wrongfully denied MA benefit are, in most courts, either expressly preempted or barred until administratively exhausted—often both. A claim survives only if it can be honestly decoupled from any Medicare standard (pure contract) or from the coverage decision (medical negligence). Because outcomes turn on framing and jurisdiction—and there is no controlling Tenth Circuit or Oklahoma authority on private MA bad-faith suits—this should be treated as an evolving area.

The federal remedies that do exist

Two federal tools remain. First, the administrative appeal itself, ending in § 405(g) review, is the enrollee’s real remedy—it can compel coverage or payment, though not tort-style consequential or punitive damages. Second, the federal False Claims Act, 31 U.S.C. § 3729 et seq., permits a private relator to sue on the government’s behalf, with treble damages and a relator’s share; in the MA context the active theater is risk-adjustment fraud (see, e.g., United States ex rel. Poehling v. UnitedHealth Group, Inc., No. 2:16-cv-08697 (C.D. Cal.)). But the distinction matters: the FCA redresses fraud on the Medicare Trust Funds and recovers public money—it is not a vehicle for an individual enrollee to recover a denied benefit.

V. Claims Against the Agent Who Sold the Plan

If the enrollee generally cannot sue the MA organization, what about the licensed agent or broker who sold the policy—often after an in-home or telephone sales pitch describing networks, drug coverage, and out-of-pocket costs? This is the most open question, and it turns on two separate inquiries: what Oklahoma law requires of agents, and whether the Medicare Act’s preemption clause reaches them.

A. What Oklahoma law requires of an agent

Oklahoma follows the majority rule that an insurance agent owes the customer only limited duties absent special circumstances. An agent has a duty to use reasonable care in procuring requested coverage and is liable if, by the agent’s fault, the insurance is not obtained as promised and the customer suffers a loss. Swickey v. Silvey Cos., 1999 OK CIV APP 48, 979 P.2d 266. But there is generally no duty to advise and no fiduciary duty to a customer absent a special relationship: “[i]nsurance companies and their agents do not have a duty to advise an insured with respect to his insurance needs.” Cosper v. Farmers Ins. Co., 2013 OK CIV APP 78. The relationship is ordinarily at arm’s length.

Setting preemption aside, an enrollee could in theory plead common-law fraud—a false material representation, made knowingly or recklessly, intended to induce reliance, and detrimentally relied upon, proven by clear and convincing evidence (Bowman v. Presley, 2009 OK 48, 212 P.3d 1210)—or negligent misrepresentation, where an agent affirmatively misstated that a particular physician or hospital was in-network, that a drug was covered, or that the plan carried “no cost.” The hard elements are usually scienter and, especially, reliance: the enrollee received CMS-standardized documents (the Summary of Benefits and Evidence of Coverage) that control over a contrary oral statement, and Oklahoma’s duty-to-read and merger doctrines cut against reliance on off-document promises.

B. The unsettled question: does MA preemption reach the agent?

CMS now comprehensively regulates MA agent and broker conduct under 42 C.F.R. Part 422, Subpart V, including § 422.2274 (licensing, training and testing, disclosures, and compensation limits) and the marketing definitions at § 422.2260 et seq. That dense federal scheme is precisely what makes preemption of agent claims plausible—and the question is genuinely unresolved.

The case for preemption:

• The clause preempts state law “with respect to MA plans,” and courts read that phrase functionally, not by the identity of the defendant. A claim that the agent misdescribed the plan’s network or benefits is, in substance, a claim about what the MA plan provides.
• Uhm preempted fraud claims tied to enrollment and marketing representations; its logic—that a jury should not second-guess CMS-approved marketing—does not obviously turn on whether the defendant is the plan or its appointed agent. See also Mayberry v. Walgreens Co., 2017 WL 4228205 (N.D. Ill. 2017) (preemption not limited by defendant type).
• CMS and courts have recently treated state efforts to police MA agent compensation, marketing, and enrollment as preempted, reinforcing that this is federally occupied territory.

The case that some agent claims survive:

• The clause preempts state “standards” with respect to MA plans—not necessarily every tort against every actor. A claim resting on an agent’s individualized, off-script oral lie arguably enforces a generally applicable duty not to defraud that exists independent of Medicare and requires no interpretation of a Part C standard.
• Courts distinguish claims “based on” CMS-approved materials (preempted) from claims based on conduct outside the regulated documents. A rogue statement that contradicts the plan documents may be an independent state-law wrong.
• No Tenth Circuit or Oklahoma decision forecloses such a claim—so in this jurisdiction the outcome is genuinely open.

The honest framing for a client or referral source is this: a misrepresentation claim against an MA agent is likely preempted where it is tethered to CMS-regulated marketing or enrollment materials, is arguably survivable only where it rests on an individualized, off-script fraud disconnected from those materials, and is untested in Oklahoma and the Tenth Circuit. Even the surviving lane faces Oklahoma’s reliance and no-duty-to-advise hurdles, plus practical obstacles such as arbitration and class-waiver clauses, the difficulty of proving reliance against standardized disclosures, and the strategic choice of whom to sue—the individual agent, the field-marketing organization, or the MA organization through agency principles.

VI. Practical Takeaways for Practitioners

• Exhaust first. For a live denial, the appeal ladder is not a formality—it is the remedy. With ~80% of appealed denials overturned, the fastest route to relief is almost always the expedited reconsideration and IRE process, not a lawsuit.
• Screen for preemption at intake. A bad-faith or breach theory against the MA organization for a denied benefit will usually be dismissed on § 1395w-26(b)(3) or § 405(h) grounds. Plead only what can be decoupled from a Medicare standard or a coverage decision.
• Watch the algorithmic-denial docket. Lokken and Barrows v. Humana are testing whether contract and implied-covenant theories can survive; their trajectory may reshape what is viable.
• For agent claims, build the record early. Preserve the Scope-of-Appointment form, any recorded sales call, and the specific off-document representations. The viability of the claim rises or falls on whether the misrepresentation was individualized and disconnected from CMS-approved materials.
• Consider the FCA separately. If the facts suggest systemic risk-adjustment or up-coding fraud, that is a qui tam matter with a different plaintiff, a different injury, and a different statute—not an individual benefit claim.

Talk to Reams Law

If you or a family member enrolled in a Medicare Advantage plan in Oklahoma and were denied care you believe you were entitled to—or if you were misled about a plan’s coverage, network, or cost at the point of sale—the path to a remedy is narrow but not always closed, and the appeal deadlines are short. Reams Law can evaluate whether an administrative appeal, a surviving state-law claim, or another avenue fits your situation. Contact us at austin@reams.law to arrange a consultation. Attorneys and other professionals are welcome to reach out regarding referrals or co-counsel arrangements.

Attorney Advertising. This article is provided for general informational and educational purposes only and does not constitute legal advice, nor does it create an attorney-client relationship. The law in this area is evolving and highly fact-specific, and several authorities discussed here are unsettled or subject to change; nothing here should be relied upon without consulting qualified counsel about your particular circumstances. Prior results do not guarantee a similar outcome. Statutory amount-in-controversy thresholds and cited data reflect figures available as of August 2026.

Selected Authorities and Sources

Statutes and regulations

• 42 U.S.C. § 1395w-26(b)(3) (MA express preemption); § 1395w-112(g) (Part D analog); § 1395ii (incorporating §§ 405(g)–(h)); § 1395ff, § 1395w-22(g) (MA appeals).
• 42 U.S.C. §§ 405(g), 405(h); 31 U.S.C. § 3729 et seq. (False Claims Act).
• 42 C.F.R. § 422.402 (preemption); 42 C.F.R. Part 422, Subpart V, incl. §§ 422.2260, 422.2274 (MA marketing and agent/broker regulation).
• 23 O.S. § 9.1 (Oklahoma punitive-damages tiers).

Cases

• Christian v. American Home Assurance Co., 1977 OK 141, 577 P.2d 899; Badillo v. Mid Century Ins. Co., 2005 OK 48, 121 P.3d 1080 (bad-faith elements); Bowman v. Presley, 2009 OK 48, 212 P.3d 1210 (fraud).
• Swickey v. Silvey Cos., 1999 OK CIV APP 48, 979 P.2d 266; Cosper v. Farmers Ins. Co., 2013 OK CIV APP 78 (agent duties).
• Do Sung Uhm v. Humana, Inc., 620 F.3d 1134 (9th Cir. 2010); Quishenberry v. UnitedHealthcare, Inc., 14 Cal. 5th 1057 (2023); Roberts v. United Healthcare Servs., Inc., 2 Cal. App. 5th 132 (2016).
• Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1 (2000); Heckler v. Ringer, 466 U.S. 602 (1984); Pharmaceutical Care Mgmt. Ass’n v. Mulready, 78 F.4th 1183 (10th Cir. 2023).
• Estate of Gene B. Lokken v. UnitedHealth Group, Inc., No. 0:23-cv-03514 (D. Minn.); Barrows v. Humana, Inc., No. 3:23-cv-00654 (W.D. Ky.); United States ex rel. Poehling v. UnitedHealth Group, Inc., No. 2:16-cv-08697 (C.D. Cal.); Mayberry v. Walgreens Co., 2017 WL 4228205 (N.D. Ill. 2017).

Reports and data

• HHS-OIG, OEI-09-18-00260 (Apr. 2022) (13% of PA denials / 18% of payment denials improper); HHS-OIG, OEI-09-24-00331 (June 2026) (SNF denials; ~95% overturned).
• U.S. Senate Permanent Subcommittee on Investigations, Refusal of Recovery (Oct. 17, 2024).
• KFF, Medicare Advantage Insurers Made Nearly 53 Million Prior Authorization Determinations in 2024 (2025) (52.8M determinations; 7.7% denied; 11.5% appealed; 80.7% overturned; per-insurer rates); KFF, Medicare Advantage in 2026: Enrollment Update and Key Trends.
• Urban Institute, The Medicare Complaints Process (Sept. 2024) (CTM complaint volume); STAT News (Nov. 2023) and ProPublica (Mar. 2023) (algorithmic-denial reporting).