New AI tool helps rural hospitals improve financial incomes

Rural hospitals provide vital healthcare services to isolated communities across the United States; for many people, they're literally a lifeline. But these institutions face significant challenges-from workforce shortages to financial hardships-that threaten their ability to continue serving their communities.

A recent study noted that more than 700 rural hospitals across the United States are currently at risk of closure due to financial hardship.¹

In response to this growing crisis, Microsoft's Rural Health Resilience Program empowers these essential organizations with technology and training to become more resilient and increase financial viability. This initiative is part of our broader Microsoft Elevate commitment, which focuses on providing access to AI tools and skills to create opportunity across various sectors, including healthcare.

We're proud to announce that the claims denial navigator is available now in the GitHub Models catalog-a free, AI-powered tool developed by Microsoft Partners and rural health leaders, from our Microsoft's Rural Health AI Innovation Lab (RHAIL).

This tool gives hospitals a powerful way to handle denied claims more efficiently-and receive appropriate reimbursement for their services. It is available now in GitHub for any healthcare provider, from small rural clinics to large urban health systems.

Improving financial results with simpler denied claims resolution

One of the greatest financial hurdles for hospitals involves denied insurance claims, and for small hospitals, the fallout is particularly severe. While many denied claims are eventually approved, the average cost of managing denied claims for a small hospital is estimated at USD330,000 annually, with the process of resolving them consuming precious time and resources, slowing cash flow and inflating administrative costs. What's more, statistical analysis shows that rural hospitals have a denial rate of 18%, far higher than the 10% rate for urban hospitals.²

Today, the availability of the claims denial navigator changes this picture.

What is the claims denial navigator?

The claims denial navigator streamlines resolution processes for denied Medicare, Medicaid, and commercial insurance claims. It offers recommendations for the most effective actions billing staff can take to resolve denied claims and learns from their actions and feedback to improve its recommendations over time. This free tool is secure (no data leaves the organization) and simple to deploy, making it easy for hospitals to realize significant benefits, including:

• Faster revenue flow: Less time and effort spent on research and resolution of denied claims.
• Improved staff proficiency: Expedites onboarding of new billing staff and continued skilling.
• Better financial outcomes: More claims resolved at a lower cost.

"Southern Coos Hospital & Health Center recently transitioned [to a new] electronic health record system. As part of this process, we prioritized an accelerated rundown of our legacy system. Our revenue cycle team leveraged the denial management app to support this effort, reducing the legacy rundown timeline by several months. Participation in the RHAIL program also demonstrated the value of developing low-cost, targeted applications in key operational areas like revenue cycle."

"After decades of working to improve healthcare access and equity, I've seen how systemic financial pressures threaten the survival of rural hospitals. The claims denial navigator represents a critical step forward-an AI-powered tool that empowers rural providers to recover revenue more efficiently, strengthen their financial footing, and continue delivering essential care to their communities,"

We are partnering with the Texas Office of Rural Clinics and Hospitals ("TORCH"), who will support their members in deploying and measuring success of the claims denial navigator. The Washington State Hospital Association there is ensuring its members are aware of and have access to the resource and will provide opportunities for members to share experiences with the tool. Slalom, our design and development consulting partner, will also support broad adoption through its Public and Social Impact team.

Looking ahead

The claims denial navigator is just the beginning. RHAIL is already working on future collaborations to build resilience, increase financial viability, and provide equitable access to high-quality healthcare for all communities.

At Microsoft, we understand the importance of rural health in communities across America. Through our Rural Health Resilience program, we're committed to helping them thrive.

Empower your organization through AI innovation and cybersecurity tools by exploring all of our Rural Health Resilience program's offerings for rural health organizations.

¹ Pennsylvania Office of Rural Health, 703 Hospitals at Risk of Closure, State by State.

² Rural Health Strategies to Optimize Utilization Review and Denials Management, February 2025.