Denial Rates Research Articles

Access to magnetic resonance imaging of patients with magnetic resonance-conditional pacemaker and implantable cardioverter-defibrillator systems: results from the Really ProMRI study.

The Really ProMRI study evaluates magnetic resonance imaging (MRI) access for patients with cardiac implantable electronic devices (CIEDs) as well as the performance of magnetic resonance (MR)-conditional leads when undergoing MRI. Patients either with an MR-conditional pacemaker or implantable defibrillator (ICD) system or with at least a component (device or one or more leads) from an MR-conditional system, were asked to fill in a questionnaire when they were referred to a MR scan. The rate of prescription, denial, or execution of MR examinations was evaluated in a 1-year follow-up visit. In total, 555 patients [median age (interquartile range) 72.2 (62.2-78.6); 72% male] were enrolled, 49% (270) with a pacemaker, 51% (285) with an ICD system. Five-hundred and ten patients completed the follow-up period. A total of 37 MRI referrals were reported in 35 patients, with a consequent event rate of 7.0/100 patient-years (CI, 4.9-9.7). Fourteen were denied, while 23 [66%; (CI, 48-81%)] were performed. The number of patients with MR referrals was not statistically different between pacemaker and ICD groups (21 vs. 14; P = 0.178). The rate of scans performed was higher in the pacemaker subjects (19/23 vs. 4/14, P = 0.003), while it was similar between patients with or without a complete MR-conditional system (19/30 vs. 4/7, P = 0.606). In this study, we reported a 7.0/100 patient-year's event rate of MR prescriptions in CIED patients. Many examinations were denied, despite MR-conditional systems, especially in ICD patients. Regulatory and cultural changes are needed to allow wider access to MR imaging in CIED patients with MR-conditional systems.

Administrative Centralization and Bureaucratic Responsiveness: Evidence from the Food Stamp Program

Delegation of administrative authority is commonly thought to involve a tradeoff between the discretion necessary for bureaucratic effectiveness and democratic responsiveness. In many contexts, however, discretion and responsiveness go hand-in-hand: Street-level bureaucrats may adapt their behavior to accommodate local norms and values, even when implementing identical statutory language. I argue that this type of bureaucratic adaptation can explain local variation in participation rates in the national food stamp program. By exploiting between-state differences in the level at which the program is administered, I further show that administrative centralization does not appear to moderate such responsiveness, which is high across institutional settings. Using data on application denial rates for a subset of these states, I offer additional evidence that some of the county-level variation in program participation is a product of decisions made by local case workers. Together, these findings offer important insights on the institutional preconditions for bureaucratic responsiveness and control.

Barriers to PCSK9 inhibitor prescriptions for patients with high cardiovascular risk: Results of a healthcare provider survey conducted by the National Lipid Association

Statin therapy is recommended for reducing atherosclerotic cardiovascular disease (ASCVD) risk. Significant risk can remain because of insufficient clinical response or statin intolerance. Proprotein convertase subtilisin/kexin type-9 (PCSK9) therapy lowers low-density lipoprotein cholesterol and has recently been shown to lower ASCVD events. The aim of the study was to assess the barriers and challenges experienced with the access and approval reimbursement process for PCSK9 inhibitor prescriptions. In 2016, the National Lipid Association conducted an online survey on PCSK9 inhibitor use and barriers to prescription among experienced healthcare workers who provide care to high-risk patients with ASCVD or familial hypercholesterolemia (FH). There were 434 respondent healthcare workers with extensive experience in treating lipid disorders. PCSK9 inhibitors are considered by 71.3% of respondent providers with statin-intolerant patients. There were high rates (>85%) of initial denial. The major barriers to approvals were insurer processes, provider documentation (inadequate documentation of maximally tolerated statin dose, diagnostic criteria for FH, number of statins failed if statin intolerant and most recent low-density lipoprotein cholesterol), and administrative burden (time, staff, paperwork, and appeals). Provider approval rates for getting ≥75% patients approved were higher for FH (43%) than for ASCVD patients (36%). Among providers with good approval rates, documentation was the most critical factor. Barriers more difficult to overcome include perceived higher threshold requirements by payers, drugs not on formulary, and drug costs. Healthcare providers encounter significant barriers to PCSK9 inhibitor prescriptions; many of these are related to documentation issues and can be overcome with checklists, staff support, and experience.

Surgeon leadership in the coding, billing, and contractual negotiations for fenestrated endovascular aortic aneurysm repair increases medical center contribution margin and physician reimbursement

BackgroundFenestrated endovascular aneurysm repair (FEVAR) allows endovascular treatment of thoracoabdominal and juxtarenal aneurysms previously outside the indications of use for standard devices. However, because of considerable device costs and increased procedure time, FEVAR is thought to result in financial losses for medical centers and physicians. We hypothesized that surgeon leadership in the coding, billing, and contractual negotiations for FEVAR procedures will increase medical center contribution margin (CM) and physician reimbursement. MethodsAt the UMass Memorial Center for Complex Aortic Disease, a vascular surgeon with experience in medical finances is supported to manage the billing and coding of FEVAR procedures for medical center and physician reimbursement. A comprehensive financial analysis was performed for all FEVAR procedures (2011-2015), independent of insurance status, patient presentation, or type of device used. Medical center CM (actual reimbursement minus direct costs) was determined for each index FEVAR procedure and for all related subsequent procedures, inpatient or outpatient, 3 months before and 1 year subsequent to the index FEVAR procedure. Medical center CM for outpatient clinic visits, radiology examinations, vascular laboratory studies, and cardiology and pulmonary evaluations related to FEVAR were also determined. Surgeon reimbursement for index FEVAR procedure, related adjunct procedures, and assistant surgeon reimbursement were also calculated. All financial analyses were performed and adjudicated by the UMass Department of Finance. ResultsThe index hospitalization for 63 FEVAR procedures incurred $2,776,726 of direct costs and generated $3,027,887 in reimbursement, resulting in a positive CM of $251,160. Subsequent related hospital procedures (n = 26) generated a CM of $144,473. Outpatient clinic visits, radiologic examinations, and vascular laboratory studies generated an additional CM of $96,888. Direct cost analysis revealed that grafts accounted for the largest proportion of costs (55%), followed by supplies (12%), bed (12%), and operating room (10%). Total medical center CM for all FEVAR services was $492,521. Average surgeon reimbursements per FEVAR from 2011 to 2015 increased from $1601 to $2480 while the surgeon payment denial rate declined from 50% to 0%. Surgeon-led negotiations with the Centers for Medicare & Medicaid Services during 2015 resulted in a 27% increase in physician reimbursement for the remainder of 2015 ($2480 vs $3068/case) and a 91% increase in reimbursement from 2011 ($1601 vs $3068). Assistant surgeon reimbursement also increased ($266 vs $764). Concomitant FEVAR-related procedures generated an additional $27,347 in surgeon reimbursement. ConclusionsPhysician leadership in the coding, billing, and contractual negotiations for FEVAR results in a positive medical center CM and increased physician reimbursement.

Insurance denials for cancer clinical trial participation after the Affordable Care Act mandate.

The Affordable Care Act (ACA) includes a mandate requiring most private health insurers to cover routine patient care costs for cancer clinical trial participation; however, the impact of this provision on cancer centers' efforts to accrue patients to clinical trials has not been well described. First, members of cancer research centers and community-based institutions (n = 252) were surveyed to assess the status of insurance denials, and then, a focused survey (n = 77) collected denial details. Univariate and multivariate analyses were used to examine associations between the receipt of denials and site characteristics. Overall, 62.7% of the initial survey respondents reported at least 1 insurance denial during 2014. Sites using a precertification process were 3.04 times more likely to experience denials (95% confidence interval, 1.55-5.99; P ≤ .001), and similar rates of denials were reported from sites located in states with preexisting clinical trial coverage laws versus states without them (82.3% vs 85.1%; χ = 50.7; P ≤ .001). Among the focused survey sites, academic centers reported denials more often than community sites (71.4% vs 46.4%). The failure of plans to cover trial participation was cited as the most common reason provided for denials (n = 33 [80.5%]), with nearly 80% of sites (n = 61) not receiving a coverage response from the insurer within 72 hours. Despite the ACA's mandate for most insurers to cover routine care costs for cancer clinical trial participation, denials and delays continue. Denials may continue because some insurers remain exempt from the law, or they may signal an implementation failure. Delays in coverage may affect patient participation in trials. Additional efforts to eliminate this barrier will be needed to achieve federal initiatives to double the pace of cancer research over the next 5 years. Future work should assess the law's effectiveness at the patient level to inform these efforts. Cancer 2017;123:2893-900. © 2017 American Cancer Society.

Banking Crises, Lending Standards and Misallocation

This paper proposes a tractable way to incorporate lending standards (credit qualification thresholds) into macro models of financial frictions. Banks can reject borrowers whose risk is above an endogenous threshold at which no lending rate sufficiently compensates banks for the borrowers’ default risk. Firms denied credit cut employment and labor reallocates mostly towards safer producers. Lending standards propagate bank capital shortfalls through labor misallocation causing deeper and more persistent real effects. The paper also shows that lending spreads are insufficient indicators of credit supply disruptions. That is, for the same increase in credit spreads, output falls faster when denial rates are increasing. Finally, with endogenous lending standards, first-moment bank capital shocks look like second-moment shocks.

THE SCORPION WHO STINGS THE DOG WHO BITES: THE EFFECT OF WOMEN’S DIFFERENT JOB POSITIONS ON GENDER DISCRIMINATION IN MICROFINANCE

prefer male enemies to female ones; I can survive a dog's bite better than a scorpion's sting.(Matshona Dhliwayo)IntroductionEquitable access for women to employment, entrepreneurship and credit cannot be considered simply a women's (Joshi et al., 2015). In light of the causes of the recent financial crisis, the question can be raised of whether a more balanced representation of women, in industrial and financial firms, would have avoided corporate scandals and poor performance (Adams and Funk, 2012). Recent institutional policy interventions, such as gender quotas in corporate leading positions, show clear proof that gender equality and discrimination are now strategic issues.These reasons contributed to the success of microfinance institutions (MFIs) that are considered women paladins in the financial industry giving them access to credit. MFIs are a valid alternative to a conventional bank when providing financing to disadvantaged and poor people (Yunus et al., 2010; Quayes, 2012). Through smaller loans (outreach depth) granted to as many clients as possible (outreach breadth), MFIs promise to fight poverty, contribute to pro-poor growth (Mayoux, 2010) and to the empowerment of women who are the natural borrowers of these organizations (Strom et al., 2014). This evidence is driven by at least four reasons. First, in poor countries, women are poorer than men (Agier and Szafarz, 2013) and consequently they are natural candidates for MFIs to the point that their percentage on total borrowers has been used as a proxy of outreach depth (Mori et al., 2015). Second, women are usually considered credit constrained (Fletschner, 2008; 2009), investing in small-scale projects that are unattractive to conventional banks (Armendariz and Morduch, 2010). Third, capital access to women ensures more social (Aggarwal et al., 2015) and economic (Fletschner, 2008) benefits to their households than would occur if borrowers were men. Finally, women are better re-payers, enhancing the persistence of the usually fragile business model of the MFIs (Boehe and Cruz, 2013; D'Espallier et al., 2011).While women are the main target of MFIs and their empowerment has become crucial in microfinance, a still unanswered question is whether they face gender discrimination in credit conditions. In fact, in an attempt to grant smaller loans to as many clients as possible, credit rationing could potentially damage women, moving MFIs away from their mission of improving the condition of women and promoting their rights. Although gender discrimination cannot be treated as a marginal issue in microfinance (Mayoux, 2010), there are few studies on the topic and evidence ispuzzling, to say the least. For example, Storey (2002) does not find any denial rate divergence between men and women, as well as Corsi and De Angelis (2017) who find no evidence of gender discrimination against women borrowers in loan size. Agier and Szafarz (2013) document that women are discriminated in the size of loan, while Sagamba et al. (2013) observe a slight preference for female applicants.Our paper provides a perspective with the potential for accommodating the divergences found in the literature. We investigate the discrimination suffered by women borrowers, looking at the effect enhanced by women lenders in mitigating the phenomenon. The main idea is straightforward and fairly intuitive. We expect that the percentage of women employed in the MFIs shrinks the effect of smaller loans granted to women on the demand side for a sort of solidarity in sharing the same traits. The failure to consider this aspect could be the reason for the mixed findings documented so far. To investigate this issue, we discriminate MFIs based on the roles of women inside the organization: top roles (CEO or board members) and operational roles (managers, officers, and staff). As we will show, a study which abstains from considering this distinction would be missing any robust explanatory power. …

Indicators of Collateral Misreporting

Automated valuation models (AVMs) are widely used in the valuation of pools of residential mortgages. In this paper, we provide evidence that high pricing errors in human and automated valuation models as well as rejection of loans with relatively low appraisals may generate the appearance of appraisal bias even when the original appraisals are unbiased. We also present evidence that the estimated frequency of appraisal overstatement is quite sensitive to assumptions about loan denial rates due to low appraisals as well as the size of and the correlation between AVM and original appraisal pricing errors. This paper was accepted by Amit Seru, finance.

Climate change denial, political beliefs, and cities: evidence from Copenhagen and Houston

Using data from surveys of Copenhagen and Houston, this article examines climate change denial in two cities with dramatically different environmental traditions. Previous research on climate change beliefs conceptualizes political views along a spectrum, from right-wing party members to moderates to left-wing party members or along a left-right ideological scale. Findings indicate that conventional assumptions about political identification and climate change beliefs vary in the two cities. In Copenhagen, respondents in right-wing parties have higher rates of climate change denial compared to the politically unaffiliated, but those on the left do not have lower rates. While left-leaning respondents in Houston have lower odds of climate change denial than moderates, right-leaning respondents do not have higher rates of denial. These results suggest that individual-level political beliefs do not always have a continuous effect on climate change attitudes. The findings in these two divergent cities – one a green capital, the other an oil and gas hub – suggest the need for greater interest in examining climate change beliefs in cities.

Insurance Coverage Decisions for Pediatric Proton Therapy

A growing body of literature supports benefits of proton therapy over photon therapy for normal tissue sparing in pediatric patients; however, high-level comparative clinical evidence is lacking. As such, proton therapy is not described as medically necessary for pediatric cancers within the coverage policies of several major US insurance companies. Other policies allow protons only for specific types of pediatric tumors or employ arbitrary age cutoffs. We examined real-world coverage decisions at a proton facility with a busy pediatric practice. We reviewed the billing office records of patients judged medically appropriate for protons by our institutional Pediatric Proton Triage Committee from 2010-2015. We included all patients ≤ 18 years old or those aged 19-30 with a pediatric primary tumor. We excluded international patients, cases without complete billing records, or patients who did not ultimately receive treatment at our institution for reasons unrelated to insurance. We tested the null hypothesis that insurance decision was unrelated to age or tumor category using Fisher’s exact test. There were 377 eligible patients with CNS malignancies (60%), non-CNS solid tumors (28%), or non-CNS lymphomas (12%). Twelve percent were over age 18, and nearly all cases (98%) were treated with curative intent. From the total cohort, 287 patients (76%) were required by their insurance companies to receive proton preauthorization or were issued an upfront predetermination/precertification. That initial decision—rendered in a median 4 days (IQR 1-7)—was approval for protons in 255 cases (89%), and denial in 32 cases (11%). The denial rate was 5% for CNS tumors, 15% for non-CNS solid tumors, and 29% for non-CNS lymphomas (P < 0.001). The denial rate was 9% for patients ≤ 18 years old versus 26% for patients aged 19-30 (P= 0.008). Of 32 cases originally denied, 31 (97%) were ultimately overturned via appeal. The appeal process required a median 7 additional days (IQR 3-15) and involved letters (13%), peer-to-peer phone calls (61%) or both (26%). Ultimately, >99% of cases were approved for protons. The single case exhausting all appeals and ultimately denied was an 18 year old with stage IIIB Hodgkin lymphoma. Insurance coverage of proton therapy was initially denied for ∼10% of pediatric patients, and this was significantly more common for non-CNS tumors and patients over 18 years old. The appeal process added an additional week of delay and nearly all denials were overturned. Despite unfavorable language in many insurance coverage policies, real-world decisions were eventual approval in > 99% of cases. Insurance companies appear to have largely accepted the current level of evidence for protons in pediatric patients, but significant time and resources are spent on appeal processes.

Heterogeneous Effects of Bank Consolidations in Local Markets: Evidence from Branch Level Data

This paper investigates the efficiency and competition effects of bank mergers and acquisitions on deposits growth and mortgage loan lending, using a sample of bank M&As between 1997 and 2014. I exploit the within-bank cross-branch variation in whether there is a merging opponent branch nearby, as a variation in changes in lo- cal competition condition at branch level. I find that deposits growth increases for all branches involved in M&As on average, but branches with merging counterpart branches nearby actually see drop in deposits growth. Regions affected by M&As on average experience increase in mortgage loan denial rates, with especially large increase among the regions with opponent branches located closely. Subsample analyses reveal the increase in denial rates generally comes from low-income applicant, especially for M&As with government assistance, suggesting an additional social cost the government should consider in assessing assisted bank mergers.

Credit and Collateral: Rising Denial Rates on Home Purchase Mortgage Applications, 2001-2011

Using a sample of purchase mortgage applications reported in HMDA between 2001 and 2011, this paper estimates how the likelihood that an application is denied by the lender has changed over time after accounting for characteristics of loan applicants. Contrary to the observed decline in the gross denial rate since 2007, this paper finds the odds of being denied in 2011 were twice what they were a decade earlier. More than 60 percent of the increase in the likelihood of denial between 2007 and 2009 is attributable to concerns about the value of the property used to secure the mortgage.

Trends in firearm background check applications and denials

There is little previous research on firearm background check applications and denials despite the potential for such research to significantly benefit policy and practice. The U.S. firearm background check system is complex with federal, state, and local laws creating a patchwork system intended to increase public safety and reduce mortality. State characteristics may play an important role in changes in application and denial rates. We examined the relationship between application and denial rates and state characteristics such as poverty, race, gender, existing firearm ownership, and population density. Multi‐level longitudinal modeling was used in an ecological study design with the state as the unit of analysis spanning a time period between 2005 and 2010, inclusive. Results indicated that application and denial rates significantly increased over time. Population density and poverty level were negatively related to application and denial rates. Firearm ownership, male population size, and percent of residents that were white were positively related to application and denial rates. Percent of African–American residents was negatively related to application rate. The importance of understanding the factors that predict firearm prevalence and the need for additional research on the denial of firearms is discussed. Copyright © 2016 John Wiley &amp; Sons, Ltd.

Insurance Coverage of Biologics for Moderate-to-Severe Psoriasis: A Retrospective, Observational 5-Year Chart Review.

With the variability in health insurance coverage for psoriasis systemic therapies, recent changes in coverage for biologics have yet to be evaluated. To determine changes in insurance coverage of biologics for moderate-to-severe psoriasis between 2009 and 2014, with a focus on insurance policies as stated in prior authorization (PA) forms, coverage denials, and time course of approval process. A retrospective chart review was performed on patients with a diagnosis of psoriasis (International Classification of Diseases [ICD], Ninth Edition, code ICD 696.1) seen at the Department of Dermatology, Medical Faculty Associates, George Washington University between January 1, 2009 and December 31, 2014. Exclusion criteria included <9% body surface area, loss to follow-up, lack of biologic treatment, biologic treatment via a clinical trial, and lack of health insurance. For all other patients, metrics collected included age, sex, body surface area, health insurance plan, prior therapies, prescribed biologic, PA necessity, time in days between PA submission and coverage decision, and denial justifications. Eight hundred and sixty-four patients with a diagnosis of psoriasis within the time period were identified, 114 of who met the inclusion criteria. PA requirement increased from 16% of patients prescribed a biologic in 2009 to 75% of patients prescribed a biologic in 2014. The mean duration in days between PA submission and coverage decision from the insurance company increased from 3.7days in 2009 to 6.7days in 2014. PA denial rates increased from 0% in 2009 to 19% in 2014. The most common reason for coverage denial was failure to attempt alternative therapies prior to requesting biologics. Insurance coverage of biologics for moderate-to-severe plaque psoriasis has become increasingly regulated between 2009 and 2014. Given both the cost burden and potential benefits of these therapies, further examination of healthcare coverage and treatment accessibility is warranted for optimal patient outcomes.

Secondary Interpretation of CT Examinations: Frequency and Payment in the Medicare Fee-for-Service Population

PurposeSecondary interpretation of diagnostic imaging examinations (providing a second formal interpretation for imaging performed at another institution) may reduce repeat imaging after transfer of care. Recently, CMS requested information to guide payment policy. We aimed to study historic trends in submitted claims and payments for secondary interpretation services in the Medicare fee-for-service population. MethodsApplying current procedural terminology codes by body part to Medicare Part B aggregate claims files, we identified all CT interpretation services rendered between 1999 and 2012. Secondary interpretation services were identified using combined code modifiers 26 and 77, in accordance with CMS billing guidelines. The frequencies of billed and denied services were extracted for primary and secondary CT interpretation services. Primary versus secondary interpretation denial rates were calculated and compared. ResultsOf all 227 million Medicare Part B claims for CT services, 299,468 (0.13%) were for secondary interpretation services. From 1999 to 2012, growth in secondary interpretation claims outpaced that in primary interpretation claims (+811% versus +56%; compound annual growth rate 17% versus 3.2%). As a percentage of all services, secondary interpretations increased from 0.05% in 1999 to 0.30% in 2012. Denial rates for second interpretations decreased from 1999 to 2012 (12.7% to 7.0%), and now approach those for primary interpretations (5.4% in 2012). ConclusionsMedicare claims for secondary interpretation of CT examinations are growing but account for less than 1% of all billed CT interpretation services. Denial rates are similar to those of primary interpretation services.

Compliance with the legal age limits for alcohol, tobacco and gambling – A comparative study on test purchasing in retail outlets

Aim: To assess whether retail outlets comply with the minimum legal age of 18 for the purchase of alcohol and tobacco and for gambling on slot machines in Finland. Methods: A test-purchase research in 117 retail outlets selling alcohol, tobacco and supplying slot machines in two towns. Five-hundred fifty-seven purchase attempts were made for alcohol (n = 173), tobacco (n = 177) and gambling on slot machines (n = 170) in private outlets and 37 attempts in government alcohol retail monopoly outlets. The differences in denial rates and factors of potential significance for denials were tested using logistic regression. Findings: The denial rate for gambling on slot machines was 4%. The odds that an alcohol or a tobacco purchase was denied were 25- and 20-fold, respectively, compared to gambling. The odds of denial of an alcohol purchase were 12-fold in alcohol monopoly stores compared to private outlets. Conclusion: The low compliance with the age limit for gambling is a challenge in a gambling policy system where slot machines are decentralized in private retail outlets and are widely available. The high denial rate in government alcohol retail monopoly outlets indicates that monopoly outlets are more capable of enforcing legal age limits effectively compared to private outlets.

Reassessing medicare trends in diagnostic CT colonography after achieving CPT code category I status.

Compare national trends in utilization and coverage of diagnostic (non-screening) computed tomography colonography (CTC) in the Medicare population before and after achieving Current Procedural Terminology(®) (CPT) Category I code status in 2010. Claims by provider type and location for diagnostic CTC were identified between 2005 and 2013 using Medicare Physician Supplier Procedure Summary Master Files. Frequencies of billed and denied services were used to calculate denial rates for CTC and abdominal computed tomography (CT). PubMed search for articles with "CT colonography" in abstract or title during 1997-2013 was performed. Publications were recorded yearly and matched to CTC denial rates. Annual Medicare claims for diagnostic CTC increased 212% during 2005-2009 in Category III status and increased 27.4% during 2009-2013 after implementation of Category I codes. Claims for abdominal CT rose 13.4% over the same overall period. Denial rates decreased from 70% to 32.8% between 2005 and 2009, and fluctuated between 24.7 and 30.6% thereafter. Denial rates for abdominal CT remained constant (4.1%-4.6%). From 2005 to 2013, services grew most in the private office (1678-7293) and hospital outpatient (1644-6449) settings with radiologists performing 93.3% of CTC. 1037 CTC publications were identified which increased 3567% between 1997 (3) and 2008 (107), plateaued until 2010 (114) and declined thereafter (75 in 2013). Diagnostic CTC grew dramatically from 2005 to 2009, but slowed thereafter; even after achieving CPT Category I code status in 2010. Medicare denial rates declined during early years but later stabilized which paralleled a slowing in new peer-reviewed research. CTC continues to be performed predominately by radiologists in the outpatient setting.

The Role of Income and Location in Racial/Ethnic Differences on Loan Denial in three Mississippi Counties

The Role of Income and Location in Racial/Ethnic Differences on Loan Denial in three Mississippi Counties Okechukwu Anyamele, Gail Fulgham, Jean-Claude Assad Abstract This paper investigates the racial differences in loan denial rates in three Mississippi counties within the Jackson Metropolitan statistical area (MSA). The study examines the role of location, minority population of location, and the ratio of loan amount to income on loan denial rates. The study uses Home Mortgage Disclosure Data (HMDA) from 2007 to 2013 to capture the effects of the recent financial crisis on loan denial rates. The results show that the ratio of loan amounts to income is a significant determinant in loan denial rates. Moreover, residents in Rankin County are more likely to be denied loans than residents in Hinds and Madison counties over the study period. Residents in high minority population area are more likely to be denied loans than residents in low minority population areas. The researchers employed both logistic regression and Blinder-Oaxaca decomposition analysis. The results showed that 28.89% of the difference in loan denial rates between whites and African Americans is explained by endowments, while 64.94% is unexplained. Similarly, 12.87% of the difference in loan denial rates between Hispanics and Whites is explained by endowments, while 86.91% is unexplained. Full Text: PDF DOI: 10.15640/jeds.v5n3a1

The Real Consequences of Bank Mortgage Lending Standards

Bank loan underwriting standards are important for credit availability. We match the Federal Reserve’s Senior Loan Officer Opinion Survey with the Home Mortgage Disclosure Act and other datasets over 1990 to 2013. Tightened standards are associated with a 1 percentage point increase in application denial rates – more for banks holding more loans on balance sheet – and a 16 percent decrease in riskier loans. Markets with more exposure to banks tightening standards see mortgage delinquency rates fall by 3 percentage points two years later, and house prices, sales of newly-constructed homes, and residential construction employment decline by 2.5, 9, and 6.5 percent, respectively

Racial differences in mortgage denials over the housing cycle: Evidence from U.S. metropolitan areas

The cyclical movement of housing prices likely affects the supply of and demand for credit for home purchases, but little is known about how this process might influence differential access to credit between minority and non-minority borrowers. This paper uses data reported through the Home Mortgage Disclosure Act (HMDA) over the period 1990–2013 to estimate the relationship between annual metropolitan area-level house price inflation and the extent to which Black borrowers are denied relative to ‘comparable’ White borrowers on their loan applications. The results indicate that, on average, Black borrowers are denied more frequently than White borrowers, but this difference in denial rates decreases significantly as house prices rise more rapidly. Such results demonstrate the importance of considering local housing market conditions when using HMDA data to assess lender compliance with fair lending laws.