AI in Healthcare Billing: The Critical Gap Between Promise and Liability 

Why Providers Must Rethink Trusting AI Without Human Verification 

The promise is seductive: Artificial Intelligence can process medical billing codes faster, with fewer errors, and at a fraction of the cost. Healthcare systems are spending $122 billion annually on manual billing processes, with nearly 15% of claims initially denied due to coding errors. For an industry drowning in administrative overhead, AI seems like a lifeline. 

But here’s the problem nobody’s talking about clearly enough: AI doesn’t understand context the way humans do. It aggregates data from global sources, applies probabilistic patterns, and generates answers that sound authoritative—even when they’re wrong. And in healthcare billing, especially in specialized areas like workers’ compensation audits and state-specific insurance guidelines, those hallucinations aren’t just embarrassing mistakes. They’re compliance landmines. 

The Hallucination Problem: Where AI Fails Catastrophically