CMS chief warns AI may initially raise healthcare costs

CMS Administrator Dr. Mehmet Oz warned Wednesday that artificial intelligence could drive up healthcare costs in the short term by making billing systems more effective.

A study released by insurer group Blue Cross Blue Shield Association on Thursday found increased billing added nearly $1 billion in healthcare costs between 2023 and 2025. The association said the study raises concerns that AI tools are contributing to higher spending. Providers say AI coding helps them bill more accurately for care, while insurers say doctors use it to charge more without an increase in medical care. CMS has launched initiatives to boost accountable care organization participation, which it claims saves billions for Medicare and drives down spending.