What's Happening?
Artificial intelligence (AI) is increasingly being used in medical billing and coding, which is contributing to rising healthcare costs. AI tools are employed by large hospitals and provider groups to manage
revenue cycles by reading clinical notes and suggesting additional diagnoses and codes for claims. While this technology can enhance efficiency and accuracy, it also has the potential to inflate costs without improving patient care. A pattern known as 'discordant treatment' has emerged, where diagnoses are billed without corresponding treatments, leading to higher payments. For instance, BlueCross BlueShield of Tennessee observed a $2.6 million increase in costs for a specific blood problem among new mothers from 2021 to 2024, despite stable treatment levels. Similar trends are seen nationally with conditions like sepsis, where billing codes trigger higher payments without consistent treatment.
Why It's Important?
The use of AI in medical billing has significant implications for healthcare costs, affecting insurance premiums and out-of-pocket expenses for patients. As diagnostic coding becomes more intense without additional care, these costs are passed on to employers and individuals through higher premiums. This raises concerns about whether the increased costs are due to sicker patients or AI-driven billing practices. Ensuring that technology serves patients and promotes affordability is crucial. Health insurers like BlueCross BlueShield of Tennessee are working to ensure fair payments for healthcare services by reviewing claims with complex codes and providing price transparency tools to help patients understand their bills.
What's Next?
To address these issues, healthcare providers and insurers need to collaborate on implementing safeguards that prevent unnecessary cost inflation while ensuring that AI tools are used appropriately. This includes reviewing claims with complex codes to ensure alignment with actual diagnoses and treatments. Additionally, providing education and support to patients about their bills and encouraging them to question discrepancies can help mitigate the impact of inflated costs. The ongoing challenge is to balance innovation in billing practices with the need to maintain affordable healthcare for all stakeholders.
