Did Your Health Insurance Claim Get Denied? AI Might Be the Culprit — and the Fix

For Neal Shah, the breaking point came during his wife’s cancer treatment.

He remembers being overwhelmed, surrounded by piles of hospital bills, denial notices and insurance statements. When he and his wife tallied everything — from monthly premiums to uncovered treatments to uncovered expenses — they realized the shocking truth: Over the years, it might have been better for them to pay entirely out of pocket rather than purchase health insurance.

At first, Shah blamed all the bills and rejections on bad luck.

“Then I went down a real rabbit hole of research, just trying to figure out what’s going on with health insurance?” he told CNET. “Why are there so many claim denials? How many people are affected? And then I became obsessive about it.”

That obsession and frustration became the seed for CareYaya, a North Carolina-based company that Shah launched to connect students entering the health care field with families in need of affordable care. But even as CareYaya grew, Shah continued to find himself faced with the all-too-familiar situation of patients, caregivers and students completely overwhelmed by health insurance claim denials.

“I realized that I am not alone and CareYaya users are not alone,” Shah said. “Millions of Americans face this problem. People are drowning in claims of denial.”

Last year, Shah launched another startup, Counterforce Health, which offers a free platform that generates personalized insurance appeal letters in minutes.

Counterforce’s platform allows patients or clinics to upload denial letters and relevant medical records. The system analyzes insurance policies, reviews medical literature and uses successful appeals to produce a draft response. Users can edit the letter before submitting it, but the AI ​​tool does the heavy lifting of translating dense health policy and clinical arguments and structuring an appeal.

As denials mount nationwide and debates over the ethical use of AI intensify, the company’s arrival comes at a pivotal time. Health insurers are increasingly turning to AI to review claims, leading to more denials and frustration for patients seeking help. Counterforce is trying to turn the tables, using AI not to block coverage but to help patients get it back.

Essentially, AI fights AI.

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Denials are multiplying across the country

Health insurance denials have become a defining feature of the American health care system. Patients pay increasing premiums, deductibles and co-pays, only to find that insurers often refuse to cover treatments recommended by their doctors.

The numbers tell their own tragic story.

According to KFF data, 20% of all claims for Affordable Care Act marketplace plans were denied in 2023. ACA plans covered more than 20 million Americans as of early 2025. Audits have found that insurers wrongly deny or delay millions of claims for care each year in Medicare Advantage, which covers more than 30 million Americans.

However, recourse remains rare. Less than 1% of ACA plan denials are contested.

“Ninety-nine percent of patients or family caregivers do not appeal,” Shah said. “Of the small fraction that does, 40% win. That means most people are intimidated, don’t know their rights, or just assume a denial is final. And it also shows how frivolous many of these denials are.”

In recent years, AI has amplified this imbalance. Large insurers have turned to AI tools that analyze medical records, apply coverage rules and generate mass denial letters. Investigations found that some algorithms made denials almost instantaneously, even when the treating provider recommended care.

In 2022, a ProPublica investigation found that Cigna used an AI-based algorithm to deny more than 30,000 claims in just two months, often without a human doctor reviewing the records.

The following year, a class-action lawsuit accused UnitedHealth of deploying its AI tool, known as nH Predict, to prematurely terminate care for elderly Medicare patients, regardless of their doctors’ recommendations. That lawsuit was filed in 2023, a year before the killing of then-UnitedHealth CEO Brian Thompson, which intensified national scrutiny of how insurance giants use denials to control costs.

Critics, like Shah, say these systems reduce patients to data points, prioritizing costs over ethics.

“Writing an appeal letter can take eight hours between researching billing codes, medical journals and citations,” Shah said. “For the average American, it’s like a full-time job on top of everything else they have to do.”

Patients are often forced into a nauseating loop when dealing with the healthcare system: claims are filed, claims are denied by machines, appeals processes are buried, and ultimately, life-changing care is delayed or abandoned altogether.

Flip the script

Against this backdrop of increasing denials and automated AI gatekeeping, Counterforce Health is positioning itself as a counterattack, going head-to-head with large health insurance companies deploying AI to deny claims. Instead of patients drowning in paperwork or giving up, the Counterforce platform gives them the tools to respond quickly and effectively.

“Right now, insurers are using AI to deny claims in seconds, while patients and doctors spend hours fighting back,” Shah said. “This is not a fair fight. Our mission is to flip the script and appeal with the click of a button.”

When a rejection letter is uploaded, Counterforce’s system not only produces boilerplate text; it analyzes the insurer’s reasoning and draws on clinical research and other appeals that have been successful in similar circumstances. The goal is to create tailored, evidence-based appeals that are difficult for insurers to reject, while saving patients and their families hundreds of hours of research and writing appeal letters.

Many patients simply do not have the time, energy, or resources to fight their appeals. As Dr. David Casarett, a professor of medicine at Duke and section chief of palliative care at Duke Health, told CNET, some patients “step into the ring with boxing gloves,” but many give up, go into debt or forgo treatment altogether. Casarett works with CareYaya as a physician partner.

Casarett’s mother battled multiple myeloma, a cancer of the plasma cells of the blood, and faced repeated insurance denials for expensive but necessary medications. Because she and her husband had advanced scientific training and a son with a medical degree, they followed appeals meticulously and often won.

“Our appeals were successful,” he said. “But what about everyone else? What prayer does a single mother with two jobs and a high school diploma have against a multi-billion dollar insurance industry?”

The organization has expanded beyond its pilot program at Wilmington Health’s rheumatology clinic in North Carolina to clinics and hospitals across the United States, providing free access to patients and caregivers. Shah said thousands of patients have used Counterforce’s tools to overturn denials of treatments that would have otherwise been out of reach.

Shah’s long-term vision is for tools like Counterforce to become objective and reliable arbiters – where patients and insurers recognize their appeals as valid, reliable and evidence-based.

Lowering the cost barrier with AI

When asked why specifically AI was chosen as the tool of choice, cost was a big caveat. Counterforce is free thanks to funding from several grants and investments from venture capital partners, including a $2.47 million grant from PennAITech, a University of Pennsylvania research center developing AI and technology to support aging and independence.

Shah said keeping this tool accessible was a priority to allow more people to appeal. While there are options for hiring patient advocates to review denials and file appeals, they can be expensive, ranging from $80 to $150 per hour, depending on the rates set by the attorney.

According to a 2025 KFF report, average spending on health services had reached $1,425 per person per year in 2022.

Adding an additional $300 to $1,000 to hire help to write an appeal is probably not feasible for many low-income or middle-class Americans.

“Right now, appealing is really only for the rich, or I would say even the ultra-rich,” Shah said. “To resolve this problem, [we had] to find a way to do it for free or at a lower cost, because people don’t have $300 to spend on a patient advocate when they can’t afford the medications they absolutely need. We thought AI would be the ideal use case because the ongoing cost per user is literally pennies. »

For now, Shah said Counterforce intends to remain free for individuals.

How to get started with Counterforce Health

Before you get started with any service that collects sensitive health information, you should always consider privacy. Counterforce Health collects personal and health-related data, such as your insurance details, denial letters, and medical history, to generate calls. The Company states that it does not sell this information, uses encryption and other safeguards to protect it, and only shares the data with trusted service providers or third parties as part of privacy and legal compliance requirements.

To get started with Counterforce Health, you can visit the home page, click “Start a Free Call” and you will be asked to fill out a brief questionnaire of information, such as why you are visiting the website and basic information about your insurance denial. From there, you’ll provide your denial letter and insurance details, and the system’s AI generates a fully drafted, editable appeal, ready for submission.