Microsoft Launches AI Tool to Improve the Financial Health of Rural Hospitals
Denied claims drain cash and time. Microsoft's new claims denial navigator helps rural hospitals resolve insurance denials faster and retain more revenue-without sending hospital data outside their environment.
The tool is available on GitHub and gives billing teams specific next steps to fix and resubmit claims. It also learns from staff feedback to improve future recommendations.
Why this matters for hospital leadership
Denied claims cost smaller hospitals an average of USD 330,000 per year to manage. Rural facilities face an 18% denial rate versus 10% in urban hospitals, which slows cash flow and adds administrative overhead.
The claims denial navigator supports Medicare, Medicaid, and commercial payers. It keeps PHI on-site, helping revenue cycle leaders improve recovery without adding new data risks.
How it works (and where it helps)
- Gives billing staff actionable recommendations to resolve denials.
- Captures user feedback to improve recommendations over time.
- Supports workflows across Medicare, Medicaid, and commercial claims.
- Operates without transferring hospital data externally.
Scott McEachern, CIO of Southern Coos Hospital & Health Center in Oregon, said, "Our revenue cycle team leveraged the denial management app to support the transition to a new electronic health record system, 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."
Dr. Jim Weinstein, Senior VP at Microsoft Health-Innovation, added, "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."
Deployment partners and program context
Microsoft is working with the Texas Office of Rural Clinics and Hospitals (TORCH) and the Washington State Hospital Association to support rollout and track outcomes. Consulting partner Slalom will help scale adoption through its Public and Social Impact team.
The tool is part of Microsoft's Rural Health Resilience Program and the Rural Health AI Innovation Lab (RHAIL), both focused on strengthening financial stability and equitable access to care in rural communities. Learn more about Microsoft's healthcare initiatives here: Microsoft Health.
What hospital management can do next
- Quantify your denial baseline: rate by payer, top denial codes, overturn rate, time to resolution, and cost to collect.
- Identify a pilot scope: one payer or a narrow set of denial codes where impact will be most visible.
- Involve RCM, compliance, and IT early to align workflows, EHR integration, and privacy requirements.
- Set clear KPIs: first-pass yield, denial overturn rate, average days to resolution, DSO, and cash acceleration from legacy A/R.
- Train staff on how to apply recommendations and capture feedback inside the workflow.
- Run weekly reviews for the first 60-90 days to iterate on rules and track results.
Key metrics to watch
- Denial rate by payer and denial category
- First-pass yield and appeal success rate
- Average days to denial resolution
- Cost to collect and staff hours per denial
- DSO and cash acceleration from legacy A/R
Bottom line
For CFOs and revenue cycle leaders, this is a practical lever for cash flow. Faster resolutions, fewer manual steps, and better visibility into what gets paid-and why-are within reach for rural hospitals looking to stabilize finances and protect access to care.
If you're upskilling your revenue cycle or operations teams on AI workflows, explore curated training by role here: AI courses by job.
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