Key Takeaways:
- Artificial intelligence (AI) is increasingly used in medical billing to suggest diagnosis codes to providers, leading to higher medical costs without a corresponding increase in patient care.
- The use of AI in medical billing can result in inflated costs, higher insurance premiums, and out-of-pocket expenses for patients.
- The growing trend of "discordant treatment" is a concern, where a diagnosis is billed but the medical record does not show treatment that would normally accompany that condition.
- Health insurers are working to ensure that payments for healthcare services are fair for both providers and members, and that technology serves patients and promotes affordability.
Introduction to the Issue
The increasing use of artificial intelligence (AI) in medical billing is a growing concern, as it can lead to higher medical costs without a corresponding increase in patient care. As Dr. J.B. Sobel, vice president of enterprise risk adjustment, quality & affordability for BlueCross BlueShield of Tennessee, notes, "If you’ve ever opened a medical bill and wondered why the charges seem higher than expected, you’re not alone. Health care costs keep going up. Many factors cause this, but one driver happening behind the scenes is the growing use of artificial intelligence (AI) in medical billing and coding." This trend is particularly concerning, as it can result in inflated costs, higher insurance premiums, and out-of-pocket expenses for patients.
The Role of AI in Medical Billing
AI tools are being used by large hospitals and provider groups to manage their revenue cycles, reading clinical notes and suggesting diagnoses and codes that could be submitted on a claim. While these tools can improve efficiency and accuracy, they can also drive costs higher without improving patient care. As Dr. Sobel explains, "These AI tools read clinical notes and suggest to the provider or the coder other diagnoses and codes that could be submitted on a claim. Used appropriately, this technology can improve efficiency and accuracy. But it can also drive costs higher, without improving patient care." This is particularly concerning, as it can lead to a phenomenon known as "discordant treatment," where a diagnosis is billed but the medical record does not show treatment that would normally accompany that condition.
The Problem of Discordant Treatment
The growing trend of "discordant treatment" is a concern, as it can lead to higher costs without a corresponding increase in patient care. For example, at BlueCross BlueShield of Tennessee, costs for a specific blood problem among new mothers increased by more than $2.6 million between 2021 and 2024, yet treatments expected for this blood problem remained relatively flat. As Dr. Sobel notes, "This means more money was paid for the diagnosis, even though the treatments typically expected for that condition did not increase." This is not an isolated example, as similar patterns are emerging with sepsis, a serious and life-threatening condition. More patients are being coded with sepsis at billing, which triggers higher payments, but many of these patients did not receive treatment consistent with that diagnosis and often had shorter hospital stays.
The Impact on Patients and Insurers
The use of AI in medical billing can have a significant impact on patients and insurers, leading to higher costs and out-of-pocket expenses. As Dr. Sobel explains, "Health insurance works by spreading costs across members. When diagnostic coding gets more intense without more care, those added costs don’t disappear. They show up in higher premiums for employers and individuals. Depending on health coverage, patients may also face higher out-of-pocket costs that don’t reflect the care they actually received." To address this issue, health insurers are working to ensure that payments for healthcare services are fair for both providers and members. For example, BlueCross BlueShield of Tennessee reviews claims that are submitted with more complicated or intensive codes to ensure that the submitted diagnoses and treatment levels are aligned.
Ensuring Fairness and Affordability
To ensure fairness and affordability, health insurers are working to make sure that technology serves patients and promotes affordability, rather than quietly inflating costs. As Dr. Sobel notes, "Technology should serve patients and affordability — not quietly inflate costs. By recognizing how advanced billing tools can contribute to rising expenses, and by working together on thoughtful safeguards, we can ensure innovation improves care without making it less affordable for everyone." This includes providing price transparency tools to help members estimate expected costs before receiving care, as well as education and support to help members understand their bills and speak up when something doesn’t look right.
Conclusion
In conclusion, the use of AI in medical billing is a growing concern, as it can lead to higher medical costs without a corresponding increase in patient care. The growing trend of "discordant treatment" is particularly concerning, as it can lead to higher costs without a corresponding increase in patient care. Health insurers are working to ensure that payments for healthcare services are fair for both providers and members, and that technology serves patients and promotes affordability. As Dr. Sobel notes, "As a health insurer, our responsibility is to strike a careful balance: ensuring providers are paid fairly for the care they deliver, while protecting our members from unnecessary costs." By working together, we can ensure that innovation improves care without making it less affordable for everyone.
https://www.tennessean.com/story/opinion/contributors/2026/01/12/artificial-intelligence-health-care-costs-bigger-bills/88136646007/