Introduction

Health Insurance denials have been steadily increasing in recent years. In response, Senator Wiener introduced the Health Insurance Accountability Act (SB 363)(2025-2056) to improve transparency and accountability among insurance providers. There are multiple reasons why claims get denied - including lack of coverage, missing prior authorizations, or providers being out-of-network. A recent article titled "Claim Denied: U.S. Insurance and Health Equity" (Think Global Health) noted that:

Non-Hispanic White Patents are twice less likely to have claims denied compared to other demographics.
Households earning $30,000 or less are 43% more likely to face denials.

Given these disparities and rising denial rates, this project investigates the main causes of denials, financial losses incurred by hospitals, and actionable solutions to reduce preventable denials. While the dataset is synthetic due to privacy concerns, the methodology and insights reflect real-world healthcare analytics practices.

Insights

Overall Denial Rate & Financial Impact

Denial Rate: 32.8%
Total Projected Loss: $98,069

Top Two Denial Reasons

Authorization Not Obtained: $ 13.64k loss
- CPT Code 99233 is the highest contributor with a 16.7% effect
Incorrect Billing Information: $15.3k loss
- CPT Code 99211 is the highest contributor with an 18.36% effect

Combining Incorrect Billing Information and Authorization Not Obtained, these two represent 29.5% of total Losses

Insurance Type Breakdown

Commercial / Private Insurance

Responsible for over 50% of all denials
53% due to Lack of Medical Necessity
39% due to pre-existing conditions
Denials show a downward trend from May to September

Self-Pay

Similar denial pattern to Commercial Insurance
Primary Issue: Duplicate Claims
Duplicate claims increased by 60% from May to September
Indicates possible resubmission of identical claims - warrants further review

Medicare

Main denial reason: Incorrect Billing Information
may reflect systemic documentation issues or process complexity

Medicaid

39% of denials due to Patient Eligibility Issues
38% due to Lack of Medical Necessity
Denials from Medical Necessity have steadily increased from May to September
Suggests potential misuse or insufficient clinical justification in some cases

Conclusion

This analysis highlights key areas where hospitals and providers can reduce claim denials and prevent revenue loss. While insurance companies may continue to apply strict criteria, healthcare organizations can mitigate avoidable denials by:

strengthening billing and authorization protocols
Training staff on high-risk CPT codes and payer rules
using analytics to monitor seasonal trends and submission errors

Improving claims processes not only helps recover revenue but also promotes equitable access to care.

Link to Interactive Dashboard: https://blater54.github.io/Claims-Denial-Analysis/Visualizations.html

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