New data from Menlo Ventures, an early-stage venture firm, shows U.S. hospitals and insurers spent about $1.4 billion on artificial intelligence last year — roughly three times what was spent in 2024 — as both sides deploy the technology in fights over medical bills and who pays them. UnitedHealth Group says it plans to spend $1.5 billion on AI in 2026 and expects to save nearly $1 billion this year. HCA Healthcare, the country’s largest publicly traded hospital chain, says it expects to save about $400 million using AI cost‑saving initiatives. At the same time, lawsuits from patients allege insurers are using AI to wrongfully deny coverage for essential services.
How the tech is used
Most AI activity in health care today is administrative: billing and claims processing. Hospitals increasingly use algorithms to maximize billing and capture revenue; insurers use their own systems to scrutinize claims and deny or reduce payments. The result is “competing AIs” that process claims much faster — and can deny them more quickly.
Effects on patients
Faster processing can help when claims are handled correctly, but it can also speed up denials. Dr. Céline Gounder, a CBS News medical contributor, notes a troubling pattern from Medicare Advantage: about 80% of initially denied claims are later approved on appeal, which suggests many denials are driven by documentation or coding issues rather than medical need. Quick denials, even if ultimately overturned, can delay care and create barriers for patients.
Where AI is appearing in clinical work
Beyond billing, AI is being introduced in specific clinical areas: radiology (for example, mammogram reads), pathology, and other image‑heavy disciplines where algorithms can flag abnormalities for human review. But AI is not yet replacing clinicians; it’s mostly augmenting workflows.
What patients can do
There are consumer‑facing AI tools that claim to help review medical bills, explain charges, or draft appeal letters — essentially adding another “AI” layer patients can use. However, these tools can’t replace human advocacy. Patients who face denials still often need help from billing experts, patient advocates, or their clinician’s office. If a claim is denied, contact your insurer for the reason, work with your provider to supply missing documentation, and consider filing an appeal. Keep records of communications and deadlines.
Bottom line
AI is reshaping administrative fights over revenue and payouts in health care, promising cost savings for large organizations but raising concerns about faster, automated denials and potential delays in patient care. Advocacy, careful documentation, and human review remain important safeguards.