Blue Cross Blue Shield Says AI Coding Added $942 Million in Costs as 60% of Hospitals Adopted Tools
Updated
Updated · CNBC · Oct 1
Blue Cross Blue Shield Says AI Coding Added $942 Million in Costs as 60% of Hospitals Adopted Tools
3 articles · Updated · CNBC · Oct 1
Summary
$942 million in added costs hit Blue Cross Blue Shield health plans from 2023 to 2025, which the insurer linked partly to hospitals' AI-assisted coding that pushed patients into higher-paying reimbursement categories.
About 70% of that billing increase—$653 million—came from added diagnoses that did not change patient care, BCBSA said, arguing AI is making it easier to capture billable conditions from data such as single lab values.
Hospital groups disputed the analysis, saying patients are older and more complex and that AI helps document real conditions, while also accusing insurers of using automated downcoding and denials that add their own administrative waste.
Brown economist Christopher Whaley said the technology risks an administrative arms race, with providers and insurers deploying costly AI tools against each other rather than improving care.
Those costs could flow to consumers through higher premiums and out-of-pocket bills, with Marsh forecasting employer health coverage costs will rise 8.2% in 2027, the biggest increase since 2003.