AI tools expand in US medical debt collection as insurance gaps widen

Companies like Cedar, backed by Andreessen Horowitz and JP Morgan, use machine learning to predict patient payment propensity and deploy AI agents to manage billing inquiries. While industry leaders view these as efficient solutions, the American Hospital Association disputes claims that AI drives inappropriate spending. Conversely, the Blue Cross Blue Shield Association reports that AI coding has increased healthcare costs by $1bn annually, citing instances where scribes suggested enhanced billing for procedures like blood transfusions.

Critics argue that AI is also used by insurers to delay or deny care through opaque algorithms. Medicare recently launched a program using AI for prior authorization, mirroring private insurer tactics. As the number of uninsured individuals grows, the reliance on AI for both generating and collecting medical debt is set to intensify, raising concerns about fairness and transparency in healthcare finance.