Analysis from the Blue Cross Blue Shield Association (BCBSA) reveals that hospitals used artificial intelligence (AI) tools to hike healthcare spending by nearly a billion dollars over a two-year-period.
The Daily Caller reports that a new study from BCBSA shows that a major rise in patients being documented as having complex conditions led to $942 million in additional medical care costs for Blue Cross and Blue Shield (BCBS) companies between 2023 and 2025.
Insurers and consumer advocates warn that these AI-fueled billing practices will ultimately push up insurance premiums and out-of-pocket expenses for families and employers.
Hospital AI found more diagnoses to bill. Insurer AI learned to deny them. Nearly $1B moved, treatment didn’t rise, and patients fund both systems through higher premiums. The machines got smarter. The patient just got a bigger bill. pic.twitter.com/3Uq0jpwLSS
— Migo (@ReiteConMig0) September 27, 2026
The BCBSA’s report “raises concerns” that the widespread adoption of AI coding tools is driving higher healthcare spending in the U.S., according to the Daily Caller.
BCBSA Senior Vice President of Product and Data Science Luke Chalker said in a statement:
If patients are truly sicker, we’d expect to see more treatment. For example, we’re seeing significantly more anemia diagnoses at these hospitals without a corresponding increase in transfusions. The disconnect between diagnoses and treatment suggests that AI is identifying more billable conditions, not sicker patients.
The Daily Caller reports that the research shows roughly $650 million of the increased costs for BCBS companies from 2023 to 2025 can be traced to secondary diagnoses that shifted claims into a higher-reimbursement category.
BCBSA Senior Vice President of External Affairs David Merritt said, “We know families are frustrated by the rising cost of healthcare, and we are committed to tackling the root causes of these higher prices.”
Meanwhile, hospitals and groups like the American Hospital Association are accusing insurance companies of fighting dirty by using their own algorithmic “insurer AI” to automatically deny or downcode legitimate claims without human review, according to the New York Times.
The Daily Caller reports that rising healthcare costs could affect the outcome of November’s midterm elections with a NBC News survey released in September finding that U.S. voters trust Democrats over Republicans on healthcare by 22 percentage points.
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