A new report by the Blue Cross Blue Shield Association has raised concerns that the use of artificial intelligence (AI) in healthcare billing is contributing to rising costs for patients. The report estimates that healthcare costs for Blue Cross companies increased by $653 million between 2024 and 2025. This increase is linked to more complex billing codes used in 2024 and 2025 compared to 2023, even when patients received similar treatments. Hospitals are using AI tools to collect more detailed information about patients and submit larger claims, which can lead to higher costs for patients. AI tools are capable of adding more conditions to patients' claims, such as low sodium or anemia, which can increase the cost of treatment. According to the report, hospitals were paid, on average, nearly $12,000 more per case due to the way AI tools are sending codes. An example provided in the report shows that billing codes for individuals undergoing bowel surgery, which include secondary conditions like partial blockages in the intestines or an increase in acid, increased by 55 percent and 33 percent, respectively, between the first quarter of 2023 and the fourth quarter of 2025. While insurers are blaming hospitals for driving up costs, hospitals are countering that insurers are using AI to reject their patients' claims. Dave Mazurkiewicz, the chief financial officer for McLaren Health Care in Michigan, told The New York Times that all the insurers are using AI to scan their charts to look for claims to deny. He stated that AI tools can help doctors better record their patients’ conditions and make suggestions for procuring higher payments from insurance companies. In theory, the use of AI should streamline the billing and payout process and produce more accurate results, potentially lowering healthcare costs for patients. However, some doctors fear the "battle of the bots" could have the opposite effect. Dr. Shiv Rao, who founded an AI patient care records company called Abridge, warned that the danger lies in "bots fighting bots, agents fighting agents," creating a dystopian future nobody wants. Some experts described a tug of war between AI systems that prioritize company profits over patient well-being. Luke Chalker, representing Blue Cross, called the struggle "not a war" but a "completely one-sided bloodbath," adding that Blue Cross uses AI to guard against inappropriate billing. Basys.ai, owned by Amber Nigam, provides advisement to private insurers and Medicare on reviewing and flagging potential abuses of the billing system. He expressed concern about AI systems that are "optimizing for revenue."