Artificial intelligence is becoming both a hospital revenue tool and an insurer cost-control tool, and Blue Cross Blue Shield Association says the collision is already carrying a substantial price tag.
A BCBSA study released estimated that increasing coding intensity added $942 million to Blue Cross and Blue Shield companies’ inpatient costs during 2024 and 2025 compared with 2023. About $653 million of that increase was associated with providers billing more secondary conditions, according to Reuters.
The mechanism is straightforward. AI systems can scan electronic medical records, physician notes, and laboratory results for diagnoses that might otherwise go undocumented. Ambient AI scribes can also listen during patient encounters and generate clinical notes. When additional conditions are recorded, an inpatient case can qualify for a higher-severity reimbursement category.
Sponsored · Cambria Gold Mines
BCBSA argues that the increase in documented complexity is not being matched by an equivalent increase in treatment.
Among patients undergoing major bowel surgeries, diagnoses involving partial intestinal blockages increased 55% between Q1 2023 and Q4 2025, while diagnoses involving excess acid in the body increased 33%, according to the study. BCBSA said treatment patterns did not rise comparably. Anemia diagnoses also increased without a corresponding increase in blood transfusions.
“If patients are truly sicker, we’d expect to see more treatment,” Luke Chalker, BCBSA’s senior vice president of product and data science, told Reuters.
The findings extend an argument Blue Cross has been building throughout 2026. A March analysis of commercial claims estimated that roughly $663 million in inpatient spending and at least $1.67 billion in outpatient spending could be connected to more aggressive AI-enabled coding. That research found coding complexity increasing faster than documented treatment at some facilities.
Hospitals dispute the insurer interpretation. The American Hospital Association said in August that increased coding intensity can also reflect patients becoming older and sicker, as well as hospitals documenting existing conditions more accurately. The group said hospital case-mix severity increased about 5% from 2019 through 2024.
The dispute is developing alongside an AI spending race. Reuters reported in March that US healthcare AI spending reached $1.4 billion in 2025, with health systems accounting for roughly $1 billion and payers about $50 million. UnitedHealth Group said AI could save it nearly $1 billion in 2026, while HCA Healthcare projected about $400 million in AI-related savings this year.
