AI-assisted hospital coding adds $942 million in costs, Blue Cross finds

October 1, 2026 at 05:34 PM2 min

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AI-assisted medical coding in U.S. hospitals contributed to $942 million in additional costs for Blue Cross Blue Shield health plans between 2023 and 2025. Much of the increase came from secondary diagnoses that moved patients into higher-paying reimbursement categories without changes in care. The finding comes as 60% of hospital systems began using AI coding tools.

Key Facts

Blue Cross Blue Shield Association estimated that AI-assisted medical coding added $942 million in costs to its health plans between 2023 and 2025.
Roughly 70%, or $653 million, of the additional billing was tied to diagnoses that did not change patient care, according to BCBSA senior vice president Luke Chalker.
The growth in complex coding occurred while 60% of hospital systems began using AI coding tools, BCBSA reported.
Brown University health economist Christopher Whaley said AI is accelerating existing billing incentives in the healthcare system.

The Blue Cross Findings

BCBSA wrote that the growth in complex coding came during a period when 60% of hospital systems began using AI coding tools. The insurer's report stated there is a clear disconnect between coding and treatment. Luke Chalker, BCBSA's senior vice president of product and data science, said roughly 70%, or $653 million, of the identified billing was tied to additional diagnoses without a change in care. Chalker said multiple factors contribute to coding intensity, but the findings suggest AI-enabled coding and documentation tools are playing a role.

Impact on Patients

Chalker said consumers have reason to be concerned because more complex coding can lead to higher reimbursement without more care. Those costs can eventually show up in the form of higher premiums and out-of-pocket costs, he added. Christopher Whaley, a health economist at Brown University, said AI appears to be accelerating existing billing incentives in the system. Whaley noted that in many cases the diagnoses are legitimate and were not previously captured, but some conditions do not influence patient care while still allowing another billing code.