Healthcare Is Fighting the Wrong AI War

Health Policy Oct 7, 2026• By KIM BELLARD The Blue Cross Blue Shield Association is crying wolf about AI. Its new analysis claims that “hospital systems are increasingly billing patient hospital stays as more medically complex,” and that these upcodings cost BCBS plans almost $1b from 2023 to 2025. That’s just claims from hospital systems, just to BCBS plans, so the total number could be much higher. Well, you might say, a billion here, a billion there – that’s just healthcare these days. Everything is going up. But BCBSA is less sanguine; it thinks the coding is part of a strategy, and it thinks AI is driving that strategy. “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. “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 analysis indicated that most (70%) of the increased costs came from secondary diagnoses that shifted payment into higher reimbursement categories, so the hypot...