6 events in Passaic County with a date

Insurers, hospitals turn to AI for age-old battle

Both invest in tech for changes, payments

By: Sriparna Roy
and Sneha S K
Reuters

..... Artificial Intelligence is being deployed on both sides of the tug-of-war between U.S. health care systems that want to be paid more for medical procedures and insurers who want proof the services were necessary, and experts are having a hard time predicting a winner.
..... Centene, an insurer focused on the Medicaid program for low-income people, recently raised the issue, saying hospitals were aggressively or even improperly using revenue software to trigger reimbursement.
..... "There have been some of these pockets where folks coming into the emergency department with a fever, all of a sudden all have sepsis," Centene CEO Sarah Lindon said at a September [2025] investor conference, referring to a life-threatening condition that triggers a host of medical interventions.
..... A Blue Cross Blue shield analysis of its commercial hospital claims found that roughly $663 million in inpatient spending at least $1.67 billion in outpatient spending may be tied to more aggressive,AI-enabled coding practices nationwide.
..... "We are seeing more AI tools used at different points in the care and billing process, and when those tools operate independently, they can unintentionally lead to friction," said Razia Hashmi, vice president of clinical affairs at Blue Cross Blue Shield Association.

Aim to drive down costs

..... In recent months, some health insurers have increased reliance on AI to help catch treatments and bills they say are unwarranted, even as hospital use AI tools to document those medical services with codes that boost reimbursement, a review of company statements and interviews with a dozen experts and analysts found.
..... The United States spends more on health care than any other nation at about 18%of the gross domestic product.
..... Both sides hope AI will drive down costs. Consultancy firm McKinsey estimates that for every $10 billion in revenue, AI could save insurers $970 million through claims management, medical prior authorization requests and by guideline clinical care.
..... AI tools are already leading to hospital care savings and they could amount to as much as $900 billion by 2050,Morgan Stanley said in a September [2025] research note.
..... "The idea of [AI] bot versus bot is intrinsically a situation where no one's going to win," said christian Silcox, research director of digital health at Duke-Margolis Institute for Health Policy.

Companies plan savings

..... Several analysts, including TD Cowen's Ryan Langston and Whit Mayo of Leerink Partners, said insurers and hospitals could save money by using AI, but they did not provide estimates. Companies are also using AI widely for administrative tasks.
..... So far, hospitals have spent more, according to Menlo Ventures, an early-stage venture capital firm that invests in AI and health care technology.
..... Health care AI spending reached $1.4 billion in 2025, nearly triple 2024 levels, Menlo said, based on its survey of 700 industry executives. Of that, health systems accounted for roughly $1 billion, or 75% of that total, and outpatient providers shelled out another $280 million, while payers contributed about $50 million.
..... UnitedHealth Group has said AI could save it nearly $1 billion in 2026.
..... The company said it hopes to invest nearly $1.5 billion in AI this year [2026] and at least as much in 2027. Its UnitedHealthcare insurance unit has primarily focused its AI spending on the consumer experience, including guiding patients to higher quality care, executives have said.
..... Smaller rival Humana recently estimated its AI investments will generate more than $100 million in savings over a few years. The company declined to comment on specifics.
..... A spokesperson for CVS Health said its Aetna health insurance business is investing in AI that can help improve clinical care and that it was partnering with providers to ensure patient get appropriate care.
..... Cigna and Elevance did not respond to questions about AI strategy between hospitals and payers.

The AI battle over payment

..... While Insurers say hospital coding and billing practices are contributing to rising medical costs and squeezing profit margins, hospitals say they need AI to fight back against insurers.
..... HCA Healthcare, the largest publicly trade U.S. hospital chain, said in January [2026] it expects about $400 million in 2026 cost savings form AI initiatives. The company has been using AI to automate revenue management and for doctors' clinical paperwork. It did not respond to a request for comment.
..... HCA Chief Financial Officer Michael Marks had previously described its use of AI tools as a response "to the growing denial and underpayment activities from the payers."
..... AI tools are helping to accurately represent medical services rendered, allowing more precise reimbursement from payers, said Providence, a chain of 51 hospitals located across seven states, including California and Texas.
..... Providence Chief Health Information Officer Maulin Shah said both sides will need to adapt to the changes artificial intelligence is already causing.
..... "It's going to require adjustments in the relationship between the payers and the provides to understand this new reality," Shah said. "Unfortunately, what we're seeing is AI fighting AI."

HOME