The quiet billing shift driving up health costs
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Hospitals are increasingly billing health plans for more complex care than they actually provide, according to a new analysis of Blue Cross Blue Shield claims from 2022 to 2025.
Why it matters: The so-called coding intensity balloons health care spending, and it corresponds with an increase in hospital use of AI to help document patient visits.
- While automated coding can boost productivity, newly billed diagnoses still have to reflect what's actually happening with a patient, according to the analysis from Blue Health Intelligence, an independent licensee of BCBS.
What they found: The top 10% percent of hospitals in the study sample drove most of the increases that were detected, with almost 60% of inpatient admissions that could be coded as complex done so at those facilities by the end of March 2025.
- That's up from about 47% in April 2022.
- The remaining 90% of hospitals saw about a 4-percentage point increase in complex cases over the same period.
Case in point: Coding intensity contributed to about $22 million additional spending in maternity care over the study period, BHI says.
- Admissions for postpartum anemia following sudden blood loss grew more than 8 percentage points among hospitals with high coding intensity growth.
- The condition is often treated with a transfusion. But there was virtually no change in transfusion claim rates in the hospitals with the largest increases in postpartum anemia claims, BHI found.
What they're saying: The American Hospital Association noted that the increasing complexity of inpatient admissions is partly because less intense care is moving to outpatient and office settings, though the organization hasn't yet reviewed BHI's analysis.
- "This is a positive development for patients, but an impact of this shift is that the care that is still provided in inpatient and outpatient settings is naturally higher acuity," said Aaron Wesolowski, AHA's vice president of research strategy and policy communications.
Reality check: Health insurers have come under fire themselves for using AI to evaluate claims submitted by hospitals and other health providers.
- UnitedHealth Group and Cigna are both facing lawsuits over their alleged use of algorithms to deny patients' medical claims.
The bottom line: "If this dynamic extends more broadly, it will further accelerate hospital spending and erode affordability for employers, families and health plans," the analysis says.
