Blue Cross ties hospital AI coding to $942 million in extra costs

Most of the extra cost comes from secondary diagnoses: conditions recorded on top of the main reason for a stay. They can move a claim into a higher-paying billing category. About 70 per cent of the increase, more than $650 million, is tied to them, BCBSA says.

Some of those diagnoses rest on a single lab value. That is the kind of detail AI tools find when they read lab reports and doctors’ notes.

The association found no matching change in the care patients received. Its example is anaemia after major bowel surgery, where diagnoses rose without a rise in transfusions. “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.

The study uses de-identified claims from Blue Cross and Blue Shield companies, which cover about one in three Americans, and BCBSA says the extra spending ends up in premiums and out-of-pocket costs. On the vendor side, Abridge founder Shiv Rao told TechCrunch that AI on both sides of billing risks bots fighting bots, though it could also cut costs.