Hospitals are quietly upping the ante with a billing tactic that's sending healthcare costs soaring. But is it a clever strategy or a controversial conundrum? The silent billing evolution is here, and it's costing us.
A recent analysis of Blue Cross Blue Shield claims from 2022 to 2025 reveals a startling trend: hospitals are billing for more intricate care than they deliver. This practice, known as 'coding intensity', is linked to the growing use of AI in documenting patient visits.
Here's the catch: while AI can streamline coding, the diagnoses billed must still align with the patient's actual condition. Yet, the study found that the top 10% of hospitals in the sample were responsible for most of the inflated billing. By March 2025, nearly 60% of inpatient admissions that could be classified as complex were coded as such in these hospitals, up from 47% in April 2022. Meanwhile, the remaining 90% of hospitals saw a more modest increase of 4 percentage points in complex cases.
And here's where it gets controversial. This coding intensity added a whopping $22 million in extra spending for maternity care during the study period. Admissions for postpartum anemia after sudden blood loss increased significantly in hospitals with high coding intensity, but surprisingly, there was little change in transfusion claims. This raises questions: are hospitals overbilling for conditions that don't require the billed treatments?
The American Hospital Association acknowledges the rising complexity of inpatient admissions, attributing it partly to the shift of less intensive care to outpatient settings. However, they haven't reviewed the analysis yet.
But wait, there's more. Health insurers are also under scrutiny for using AI to assess claims, with UnitedHealth Group and Cigna facing lawsuits for allegedly employing algorithms to reject patient claims. Is AI the hero or the villain in this story?
The analysis warns that if this billing trend continues, it will exacerbate hospital spending, making healthcare even less affordable for employers, families, and health plans. So, the big question remains: how can we ensure fair and transparent billing practices in the age of AI?
