The news: Healthcare AI startup Ambience Healthcare created an AI model that’s 27% more accurate than physicians in coding medical diagnoses for billing purposes, according to the company.

How it works: Ambience’s new AI model, which was trained using OpenAI technology, helps physicians generate complete clinical notes.

• The model identifies which ICD-10 codes should be used for billing based on the patient visit. For context, there are ~70,000 ICD-10 codes for different conditions and diseases that are used for medical billing.
• Ambience’s AI scribe records patient visits in real time and integrates with the startup’s new AI model to create a draft clinical note with suggested diagnosis codes.
• Clinicians review and confirm the AI-produced documentation before it’s included in the patient’s medical record.

Why it matters: Accurate medical coding can significantly impact a hospital’s bottom line by lessening the likelihood of claims denials and delayed payments for services rendered. Many organizations are looking for AI-powered tech that captures the most pertinent details needed for billing and coding.

• Ambience says its new AI tools could help eliminate up to 25% of the coding errors that even the most experienced clinicians make.
• 57% of health system CFOs said they plan to use AI for coding purposes in the next year, compared with 39% who are currently using the tech for this reason, per a February 2025 BDO survey.