A quiet yet powerful shift in healthcare billing practices is quietly driving up costs, and it's all about the numbers. The use of AI in hospitals is raising eyebrows and sparking controversy.
According to a recent analysis by Blue Cross Blue Shield, hospitals are billing for more complex care than what's actually provided. This so-called 'coding intensity' is ballooning healthcare spending, and it's closely tied to the increasing use of AI in patient documentation.
But here's where it gets controversial: while automated coding can enhance productivity, the billed diagnoses must accurately reflect the patient's condition. And this is where the issue arises. An analysis by Blue Health Intelligence, an independent licensee of BCBS, reveals that the top 10% of hospitals in their study sample are responsible for most of the increase in complex care billing.
By the end of March 2025, almost 60% of inpatient admissions that could be coded as complex were done so at these facilities. This is a significant jump from the 47% recorded in April 2022. The remaining 90% of hospitals saw a more modest increase of around 4 percentage points over the same period.
Take maternity care, for example. Coding intensity contributed to an additional $22 million in spending over the study period, according to BHI. Admissions for postpartum anemia following sudden blood loss saw an increase of over 8 percentage points in hospitals with high coding intensity growth. However, there was virtually no change in transfusion claim rates at these hospitals, which is often the treatment for this condition.
The American Hospital Association (AHA) acknowledges that the increasing complexity of inpatient admissions is partly due to less intense care moving to outpatient and office settings. Aaron Wesolowski, AHA's vice president of research strategy and policy communications, said, "This is a positive development for patients, but it means the care provided in inpatient and outpatient settings is naturally of higher acuity."
But it's not just hospitals under scrutiny. Health insurers are facing their own AI-related controversies. UnitedHealth Group and Cigna are facing lawsuits over their alleged use of algorithms to deny patients' medical claims. This raises questions about the fairness and transparency of healthcare billing practices.
The analysis concludes that if this dynamic continues, it will accelerate hospital spending and further erode affordability for employers, families, and health plans. So, what do you think? Is this a necessary evolution in healthcare or a concerning trend? The floor is open for discussion.
