# Insurers say hospital AI coding added $942 million in costs

> The Blue Cross Blue Shield Association says hospitals’ use of AI tools to prepare insurance claims was linked to $942 million in extra healthcare spending over two years. Its analysis found more patients coded as having complex conditions, without evidence of matching changes in care.

Oossa · 2026-09-29 · https://oossa.com/en/insurers-say-hospital-ai-coding-added-942-million-in-costs

Hospitals’ use of AI tools to prepare insurance claims was associated with an estimated $942 million in additional healthcare spending over two years, according to an analysis by the Blue Cross Blue Shield Association (BCBSA), which represents health insurers.

The association says it found a sharp rise in patients being recorded as having complex conditions. But it also reported a gap between those medical codes and the treatment patients received, with “no evidence of corresponding change in care delivered.” The figures point to a dispute over whether more detailed or complex coding reflects patients’ needs—or is increasing what insurers pay.

The analysis is the insurers’ account of the issue. The source report does not give details on how the $942 million estimate was calculated, so it is not possible to assess its methods from the information provided.

## AI is entering a longstanding dispute

Hospitals and insurers have long argued over which treatments should be covered and how much they should cost. The New York Times described the BCBSA analysis as a new sign that AI may be adding to those tensions. The report also says AI is being used on both sides, though it does not specify which insurer tools or actions contributed to the dispute.

Dr. Shiv Rao, founder of healthcare AI company Abridge, warned that the technology could lead to “bots fighting bots, agents fighting agents.” He also said it could instead ease tensions and lower costs. The difference may depend on how the tools are used: automating paperwork could help, while systems that intensify claim disputes could add work and expense.

BCBSA senior vice president Luke Chalker rejected describing the situation as a battle, saying insurers were on the losing side. His comment reflects the association’s position; the analysis does not settle whether AI-driven coding is causing the spending increase or how much of it is justified.

## The facts

- The Blue Cross Blue Shield Association estimated $942 million in additional spending over a two-year period.
- The analysis found a sharp increase in patients documented as having complex conditions.
- BCBSA said it found no corresponding change in care delivered.
- Abridge founder Dr. Shiv Rao said AI could either intensify disputes or help reduce tensions and costs.

## Why it matters

For patients, more expensive claims could eventually affect premiums or healthcare bills, though the report does not quantify any effect on individual costs. The key unresolved question is whether AI is helping document care more accurately or encouraging coding that raises payments without changing treatment.

## Sources & references

1. [Insurers claim AI is already increasing healthcare costs](https://techcrunch.com/2026/09/26/insurers-claim-ai-is-already-increasing-healthcare-costs/) – TechCrunch, 2026-09-26

Last updated: 2026-09-29