BCBSA links AI hospital coding to $942Mn in added costs
- BCBSA estimates complex coding added $942 million in costs from 2023 to 2025.
- The share of cases billed as complex rose from about 37% to about 40%.
- Secondary diagnoses drove about 70%, or more than $650 million, of the added costs.
- More than 60% of hospital systems now use AI coding tools, BCBSA said.
ILLINOIS, UNITED STATES — Hospitals are billing more inpatient stays as medically complex with no evidence of a matching change in the care patients receive, a shift a new payer analysis estimates added $942 million in costs for Blue Cross and Blue Shield (BCBS) companies between 2023 and 2025.
The share of cases billed as complex rose from roughly 37% in early 2023 to about 40% by late 2025, as more than 60% of hospital systems began using artificial intelligence (AI) coding tools.
Secondary diagnoses drive most of the added cost
The analysis comes from the Blue Cross Blue Shield Association (BCBSA), a national federation of independent BCBS companies that together cover one in three Americans.
Researchers found that secondary diagnoses, conditions identified in addition to a patient’s main reason for care, accounted for about 70%, or more than $650 million, of the added costs.
Many of those diagnoses, such as anemia or low sodium, can be derived from a single lab value, making them particularly well suited to detection by AI tools, the association said.
The analysis covered more than 55,000 excess complex cases from the first quarter of 2023 through the fourth quarter of 2025, using de-identified BCBS claims data.
In major bowel procedures, the category the paper examined most closely, the most complex claims rose from 20.2% to 22.7% while non-complex cases fell from 36.6% to 32.8%.
BCBSA points to a gap between coding and care
“If patients are truly sicker, we’d expect to see more treatment,” said Luke Chalker, BCBSA’s senior vice president of product and data science.
Hospitals with the highest coding growth diagnosed anemia 38% more often than peer hospitals, yet transfused fewer of those patients, at 16.9% compared with 19.3%.
“The disconnect between diagnoses and treatment suggests that AI is identifying more billable conditions, not sicker patients,” Chalker said.
The paper is payer research that measures costs to the Blue System, and Chalker is among its listed authors.
The association said the findings build on its earlier research showing that AI-enabled billing tools may contribute to higher healthcare costs.
“As families face higher healthcare costs, this research underscores the urgent need to better understand these AI tools and the role they may play in exacerbating the affordability crisis,” said David Merritt, BCBSA’s senior vice president of external affairs.
For hospital revenue cycle leaders, payer scrutiny of AI-assisted coding puts documentation accuracy at the center of medical coding and medical billing work.
Health systems reviewing their coding workflows can compare in-house teams with specialists among the top U.S. healthcare outsourcing companies as payers study how complex claims are coded.
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Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
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