AI is identifying more billable conditions, not sicker patients

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Texas Attorney General Ken Paxton announced Monday that his office has launched an investigation into Blue Cross Blue Shield of Texas over allegations that the insurer denied or delayed urgent and medically necessary care, as a separate national debate intensifies over the use of artificial intelligence by both hospitals and insurance companies.

According to the Texas Attorney General’s Office, the investigation covers Blue Cross Blue Shield of Texas, its parent company Health Care Service Corporation, and related entities. Investigators are examining the companies’ claim-review procedures and prior-authorization requirements.

Paxton’s office said it had received reports alleging that medically necessary or urgent procedures were delayed or denied.

Healthcare industry reporting indicates that insurers are also deploying artificial intelligence to scrutinize medical charts and challenge claims.

McLaren Health Care’s chief financial officer recently said insurers use AI to scan records for claims they can deny while hospitals examine those same records to maximize reimbursement.

“All the insurers are using A.I. to scan our charts to look for claims to deny. For the same reason, we’re looking at the same charts today,” Dave Mazurkiewicz, the CFO of McLaren Health Care, told the NY Times.

That developing technological arms race has created a striking dynamic: hospitals can deploy algorithms to identify diagnoses that generate higher reimbursement, while insurers can use their own automated tools to challenge whether those claims should be paid.

Hedgie Markets summarized the controversy on X, arguing that patients ultimately bear the financial consequences through premiums and other healthcare costs.

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