CMS Administrator Dr. Mehmet Oz warned at Oracle's health and life sciences summit that artificial intelligence will make healthcare more costly before it delivers savings. He said AI would strengthen current billing mechanisms, making them more effective and, in turn, more inflationary for now. Even so, he argued the technology is indispensable, saying lives would be lost if AI were not used in daily clinical work.
Industry observers have raised concerns about AI's role in coding and billing. A study from the Blue Cross Blue Shield Association estimated that AI-assisted coding has added nearly $1 billion in healthcare spending between 2023 and 2025. Insurers say providers are using the tools to charge more without delivering additional care, while providers contend the technology improves billing accuracy.
Oz pointed to accountable care organizations as the key to long-term savings. By moving away from fee-for-service payments toward outcome-based models, CMS hopes providers will use AI to improve clinical efficiency rather than to inflate bills. Critics caution that ACOs can carry financial risk and extra bureaucracy for providers, but the administration is pressing ahead with initiatives to expand participation.