AI billing tools may be driving up hospital costs, insurers say

Hospitals are increasingly using AI systems to handle medical billing and coding, a process that determines how much insurers pay for care. Insurers now say these AI tools may be contributing to rising costs across the health care system rather than reducing them.

Blue Cross Blue Shield has estimated that AI-driven billing practices could be adding close to $1 billion in extra costs. The concern is that AI coding systems may be optimizing claims in ways that inflate charges, even as hospitals say the technology improves efficiency and accuracy.

The dispute highlights a broader tension as AI moves into critical financial infrastructure within health care, with patients potentially bearing some of the resulting cost increases through premiums or billing disputes.