Get the facts: How is providers’ use of AI for medical coding affecting healthcare costs?

• AI appears to be playing a role in driving up healthcare costs, which could be because of a new trend in how healthcare providers bill insurers.
• As more insurers have observed an increase in claims severity, it’s sparked speculation across the healthcare industry that providers’ use of AI could be increasing the amount of money they’re paid. 
• A growing number of studies and reports suggest that an uptick in claims coded for complex care is playing a meaningful role in increasing healthcare costs and, in turn, the premiums people pay for their health plan.

Artificial intelligence has impacted all sectors of our economy, and healthcare is no exception. There are countless examples of AI addressing real problems in the healthcare system, namely by enabling care providers to work more efficiently and reducing administrative burden for clinicians. But for all the good it’s doing, AI also appears to be playing a role in driving up healthcare costs. And that could be because of a new trend in how healthcare providers bill insurers.

After hospitals or doctors provide care for patients, they file claims with health insurers. Every claim includes a series of healthcare codes, with each code signifying the type and complexity of care that was provided to the patient. Insurers evaluate those codes to determine how much to pay the hospital or doctor. 

• Starting in 2025, many health insurers reported seeing an increase in claims severity when compared to the claims submitted in 2024, meaning more of the claims they processed were coded to reflect that the patient received a complex level of care. 
• This, in turn, resulted in higher payments to care providers. 

As more insurers have observed this trend in their claims data, it’s sparked speculation across the healthcare industry that providers’ use of AI, specifically through technology known as ambient AI, could be behind this increase in claims severity. 

• Some health systems have begun using what’s known as ambient AI to record conversations between physicians and patients. 
• In a matter of seconds, the technology can fully transcribe the entire conversation and then develop a summary for the physician. 
• Those summaries are important tools for providers when developing their claims. 
• Because the AI-developed summary is likely more comprehensive than what the doctor or nurse could have developed manually, it’s possible care providers are in turn including far more codes in their claims than they otherwise would have. This, in turn, would enable the provider to file — and get paid for — a more expensive claim.

A growing number of studies and reports suggest that this uptick in claims coded for complex care is playing a meaningful role in increasing healthcare costs and, in turn, the premiums people pay for their health plan.

• In a June 2026 report on the factors driving up healthcare costs for employer-sponsored health plans, PwC noted that 70% of surveyed health plans ranked AI-enabled tools that capture more provider revenue as a top three inflator of healthcare costs.¹ 
• The Peterson-KFF Health System Tracker acknowledged this trend as one of the primary drivers of higher healthcare costs in a July 2026 report: “Whether driven by genuine increases in patient complexity or shifts in billing practices — such as using  AI to maximize billable services — this trend toward higher-severity claims translates directly into higher costs for insurers and, ultimately, higher premiums.”²  
• Providers’ use of AI was also cited in an August 2026 report from Aon: “Additional cost pressure is emerging as providers adopt technologies, including AI, that support more detailed clinical documentation and coding, contributing to higher billed charges in some instances.”³ 

More research is needed to confirm if there is indeed a connection between providers’ use of AI for medical coding and the cost of healthcare, but in the meantime, it is possible to save money on the care you and your family need. Check out this article for tips that can help you avoid paying a higher premium or find ways to save money on healthcare throughout the year.

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