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Demand Drives AI Growth in Medical Billing

The AI in Medical Billing Market has emerged as one of the most transformative sectors in health care technology, reshaping how providers, insurers, and patients interact with financial processes. The market is characterized by intense competition as health care organizations prioritize efficiency, accuracy, and regulatory adherence. AI technologies are streamlining workflows by automating claim submissions, coding, eligibility verification, and payment posting—functions that were previously time-intensive and prone to human error.

The US AI in the Medical Billing Market size reached $1.29 billion in 2024 and is expected to reach $7.41 billion in 2032 at a compound annual growth rate (CAGR) of 24.46% from 2025 to 2032.

The United States remains a major hub, fueled by robust health care infrastructure, strict billing regulations, and high AI adoption rates. Hospitals and clinics continue to drive demand, while telehealth growth, regulatory compliance, and the emphasis on revenue cycle optimization provide fertile ground for further expansion.

Key players include Waystar, NextGen Healthcare, McKesson Corporation, Epic Systems Corporation, Athenahealth, eClinicalWorks LLC, GE Healthcare, Optum, RapidClaims.Ai, and Nym Health.

Segmentation Analysis by Deployment
In 2024, cloud-based solutions held 66.08% of the market share, driven by their affordability, scalability, and ability to integrate seamlessly with telehealth and EHR systems. Leading platforms like Athenahealth and Kareo have developed cloud-based AI tools that improve coding accuracy, prevent claim denials, and enable remote accessibility. The demand for real-time data collaboration and regulatory compliance further cements the cloud’s dominance.

The on-premises segment is expected to record the fastest CAGR of 26.08%. This growth is primarily fueled by large health care institutions that require greater control over infrastructure and patient data security. On-premises deployments cater to organizations bound by strict compliance requirements. Companies like AdvancedMD and eClinicalWorks are enhancing their on-premises AI tools to support claims processing and billing analytics, positioning this segment as a critical choice for data-sensitive health care providers.

Segmentation Analysis by Application
Revenue cycle management (RCM) accounted for 49.37% of the market in 2024. Health care facilities increasingly rely on AI to automate patient registration, eligibility verification, coding, and denial management, enabling faster payments and fewer administrative burdens. Companies such as Change Healthcare and R1 RCM are spearheading this trend by embedding AI into their RCM platforms.

The fraud detection segment, however, is forecast to grow at the highest CAGR of 30.85%. With regulatory scrutiny intensifying and fraudulent claims on the rise, AI’s ability to identify anomalies and detect billing fraud is becoming indispensable. Providers and insurers are ramping up investments in fraud detection solutions offered by players like Optum and SAS.

Segmentation Analysis by End-User
In 2024, hospitals and clinics dominated the AI in medical billing market, accounting for a 60.22% share, driven by high patient volumes and significant administrative workloads. AI enables these institutions to automate complex billing processes, improving accuracy and efficiency. Leading providers like Epic Systems and Cerner have integrated AI-driven billing tools into clinical and financial workflows, reinforcing hospitals’ position as the largest market contributors.

Meanwhile, health care payers are projected to grow at the fastest CAGR of 26.84%, fueled by investments in AI for claims adjudication, fraud detection, and billing error reduction. Major insurers, such as Humana and UnitedHealth Group, are leveraging AI to reduce costs, enhance efficiency, and support the transition to value-based care and predictive analytics.

Recent Developments
In April 2024, McKesson’s Ontada partnered with Microsoft to leverage Azure AI and OpenAI capabilities, analyzing more than 150 million oncology documents to enhance data extraction and insights.

In May 2025, Optum launched Optum Integrity One, an AI-enabled revenue cycle platform aimed at reducing inefficiencies and improving documentation accuracy. Early pilot studies revealed a 20% increase in coding productivity.

— Source: SNS Insider