PwC Report Says AI Is Pushing Medical Bills Higher
Artificial intelligence was supposed to help make healthcare cheaper. A new PwC report suggests one of its first major effects may be the opposite: helping providers document more billable complexity and pushing medical costs higher.
The latest warning comes from PwC’s Health Behind the Numbers 2027 report, which projects U.S. commercial medical cost trend at 9% for the group market and 8.5% for the individual market in 2027. According to PwC, AI-enabled documentation and coding tools are now among the factors health plans say are raising paid amounts per claim.
The finding is drawing attention because AI is often marketed as a way to reduce administrative waste. In healthcare, the same tools can also help hospitals and practices capture more detailed billing codes under a system that still rewards higher reimbursable complexity.
PwC Report Points to AI Billing Tools as a New Cost Pressure
The procedural trigger is PwC’s annual medical cost trend analysis, published June 11, which surveyed health plans on the drivers behind projected 2027 spending.
Becker’s Hospital Review reported that PwC expects the group market medical cost trend to hit 9% in 2027, its highest level in nearly two decades. The firm also revised its 2026 forecast upward, lifting the group market estimate from 8.5% to 9% and the individual market estimate from 7.5% to 8.5%.
A key reason is not simply that patients are receiving more care. PwC’s concern is that AI tools may increase “coded severity” and case complexity, allowing providers to document visits in ways that produce higher reimbursement.
Fierce Healthcare reported that 70% of health plans surveyed by PwC ranked AI-enabled documentation and coding tools among their top three cost drivers.
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AI Is Changing the Medical Billing Layer First
The most important shift is happening inside the documentation system.
AI scribes and coding tools can capture more details from a patient encounter, structure notes more cleanly and identify additional diagnosis or severity indicators. In some cases, that may improve record quality. In others, it can make the same visit appear more complex for billing purposes.
Axios reported that PwC’s analysis found the financial impact comes from changes in coded severity, case mix and paid amount per claim, rather than only from higher utilization.
Fortune reported that AI note-taking tools can document more granular diagnoses and medical complications that a rushed clinician might otherwise group under broader codes. Those details can support higher-paying billing categories even when the care delivered does not meaningfully change.
That is the unusual twist in the AI healthcare story: the first clear financial winner may not be the patient or the insurer, but the revenue cycle.
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A Blue Cross Analysis Shows How Coding Intensity Can Raise Costs
The concern is not theoretical.
Axios previously reported on a Blue Cross Blue Shield analysis showing that some hospitals sharply increased coding for acute posthemorrhagic anemia in maternity admissions between 2022 and 2025, even though transfusion rates barely changed.
Fortune reported that the billing code rose from 4% to 12.3% of maternity admissions at some hospitals, while an audit of the hospital system with the steepest increase found fewer than 20% of cases met clinical criteria. The same analysis found coding intensity added about $22 million to maternity spending at the hospitals studied.
The broader implication is uncomfortable for payers and employers. AI may help providers locate every reimbursable detail inside a clinical record, but insurers are the ones absorbing the claims — and those costs can later show up in premiums, deductibles and employer benefit decisions.
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Healthcare Costs Are Rising for More Than One Reason
AI is not the only force pushing medical bills higher.
PwC also points to provider reimbursement pressure, prescription drug spending, behavioral health utilization and out-of-network payment disputes. Becker’s reported that pharmacy spending remains a major cost driver, while behavioral health claims utilization rose 62.6% between 2018 and 2024 and increased another 10% from 2023 to 2024.
The No Surprises Act dispute process is also adding pressure. Becker’s reported that providers won 88% of reimbursement disputes with health plans in 2025, involving about 2.6 million arbitration cases.
AI stands out because it changes the cost equation without necessarily changing the patient experience.
A hospital does not have to build a new wing or prescribe a new drug for costs to rise. If documentation tools increase the reimbursable severity of existing encounters, the billing layer itself becomes a source of inflation.
What Happens Next for Patients, Employers and Insurers
The next fight will likely be over how insurers audit AI-assisted documentation and how much of the resulting cost pressure gets passed to employers and consumers.
Health plans may respond with stronger payment integrity programs, more targeted claims audits and closer monitoring of provider-level severity drift. Employers may reassess benefit designs if premiums continue rising faster than wage growth.
Providers will argue that better documentation reflects more accurate care complexity. Insurers will argue that coding intensity can become a revenue strategy when it raises paid amounts without matching increases in clinical severity.
The unresolved question is whether AI eventually reduces costs by improving care coordination and administrative efficiency, or whether it first strengthens the parts of the healthcare system already designed to maximize reimbursement.
Key Takeaways
- PwC projects U.S. commercial medical cost trend at 9% for the group market and 8.5% for the individual market in 2027.
- AI-enabled documentation and coding tools are now a major new cost pressure.
- 70% of surveyed health plans ranked provider AI tools among their top three cost drivers.
- The cost increase is tied partly to coded severity, case mix and paid amount per claim.
- Patients may eventually feel the impact through premiums, deductibles and employer benefit changes.
Sources
- PwC — Health Behind the Numbers 2027
- Becker’s Hospital Review — Healthcare costs projected to jump 9% in 2027
- Fierce Healthcare — Health plans blame AI adoption and drug prices for 2027 cost jump
- Axios — How AI is making health care even less affordable
- Fortune — AI was supposed to cut health care costs. One of its first jobs was charging you more
- Axios — The quiet billing shift driving up health costs
