AI Walked Into a Hospital. It Became an Accountant
85% of healthcare executives say AI is boosting revenue. The gains are coming from billing, not breakthroughs
Eight out of ten healthcare executives say AI is generating revenue gains for their organizations, according to NVIDIA's 2026 State of AI in Healthcare survey. The gains are showing up in an unexpected place: accounts receivable.
Hospitals have spent years absorbing financial losses hiding in plain sight: missed rebates, contract discrepancies and underpayments from insurers that went undetected for years. AI is now being deployed specifically to find that money.
The same Nvidia survey states 39% of payers and providers cite administrative tasks and workflow optimization as their primary area of ROI, ahead of any clinical application.
Where the Money Is Going
Hospitals absorbed $130 billion in underpayments from Medicare and Medicaid in 2023 alone, with those shortfalls growing an average of 14% annually between 2019 and 2023, according to an April 2025 American Hospital Association report.
The problem extends beyond government payers. Commercial contracts carry their own layer of discrepancies - missed rebates, pricing errors, and underpayments that accumulate quietly across thousands of claims.
Part of what makes this problem so persistent is where the money hides. Many underpayments sit inside accounts hospitals have already marked as paid and closed. These accounts appear clean inside billing systems, but analysis of nationwide client data by Aspirion found 54% of recoveries from closed accounts originate from undetected denials.
A Midwest health system that deployed AI specifically on those accounts recovered more than $20 million in underpayments, including $6 million disputed on contract language for implants alone.
Dayne Hoffman, Revenue Cycle Solutions Lead at Notable Health, said: "Historically, breakthroughs in healthcare have come from the clinical side: new therapies, diagnostics, and devices. But AI's first real proving ground won't be in the exam room, it'll be in the revenue cycle."
The Players Moving First
Mount Sinai is the most recent major health system to act. The New York hospital group announced March 17 that it has partnered with Midstream Health, deploying an AI platform that scans financial and contract data for missed payments and billing discrepancies.
Read: Mount Sinai Health Applies AI to Uncover Hidden Costs in Supply Chain
The announcement came 13 days after Mount Sinai's hospitals formally dropped out of Anthem Blue Cross Blue Shield's network, meaning Anthem patients could no longer see Mount Sinai physicians or use its facilities at in-network rates. Mount Sinai says Anthem owes it more than $450 million for care already delivered, a dispute that began when roughly 9,000 Mount Sinai physicians lost their Anthem contracts on January 1.
Mount Sinai projects a fivefold return on investment on the Midstream deployment. The health system purchases and tracks supplies, equipment, and services in excess of $1 billion annually, a scale at which small contract discrepancies accumulate into large financial losses.
Mount Sinai is the first New York City health system to deploy the platform, starting within supply chain operations.
CFO Vincent Tammaro said: "Receiving the full contract value of our rebates is an important component of managing supply expenses and mitigating the impact of rising inflation that contributes to health care unaffordability for our patients and communities."
CommonSpirit Health deployed the same platform in February 2026. Daniel Barchi, CommonSpirit's chief information officer, said the AI agents delivered measurable financial gains within days of going live.
HCA Healthcare, the largest publicly traded U.S. hospital chain, confirmed at the Raymond James Conference in March 2026 that its billing AI uses machine learning to analyze claims and reduce denials, with results expected between 2026 and 2028.
A Problem Years in the Making
Coding-related denials have increased 126% over the past three years, according to MDaudit data cited by HFMA. Hospital margins have not recovered to pre-pandemic levels, making those losses harder to absorb. The median operating margin sat at 1.5% in 2024, up from 0.5% the year prior, according to Chartis.
The consequences are showing up on the ground. MetroHealth in Ohio lost $50 million in 2024 and laid off 125 employees in July 2025. CEO Christine Alexander-Rager told staff: "Despite your hard work and steady growth in our volumes, MetroHealth's expenses continue to outpace revenues. And that gap is growing."
Drug expenses rose 12% year over year from March 2024 to March 2025, while supply costs grew 11% over the same period. Nearly 9% of hospital revenue is lost to documentation errors alone, per a December 2025 HFMA survey of 519 CFOs and revenue cycle leaders. For health systems already operating on margins under 2%, those are significant errors.
The volume of payment data involved has outgrown what billing teams can manage manually. Among hospitals that have deployed AI in the claims process, 69% report it has reduced denials or increased successful resubmissions, according to Experian Health's 2025 State of Claims survey.
Insurers are paying attention. Andrew Asher, Centene's chief financial officer, acknowledged at the Deutsche Bank Healthcare Summit that hospitals have pulled ahead. "It does seem like the hospitals have gotten better organized around the application of AI for coding than payers," Asher said. "But we're going to catch up to that."