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Medical coding, GLP-1s push BCBSMA spending up 12%

Blue Cross Blue Shield of Massachusetts documents a rapid growth in healthcare spending after COVID-19 in a new study, which points to rises in medical and GLP-1 utilization.

Jacqueline LaPointe
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Published: 08 Oct 2026

Healthcare spending has accelerated since the COVID-19 pandemic for Blue Cross Blue Shield of Massachusetts, increasing to nearly 12% by mid-2025, according to a study in Health Affairs.

The Boston-based insurer covers about 40% of commercial membership in Massachusetts, representing 2 million medical coverage enrollees and 1.4 million prescription drug enrollees.

BCBSMA faced relatively stable spending growth before the pandemic. However, the latest study, written in partnership with researchers from Harvard University, shows larger recent surges in expenditures by mid-2022, culminating in 11.8% growth in the 2025 fiscal year.

Greater medical spending accounted for about two-thirds of cost growth last year, researchers reported, followed by prescription drug spending.

"The sudden rise in healthcare spending after COVID is putting enormous pressure on a system that was already struggling," stated study co-author Michael Guerriere, senior vice president and chief actuary at BCBSMA, in a press release. "When we dig deeper into the numbers, we can see a major shift in how money is being spent -- which tells us that both doctors and patients are behaving differently than before."

How patients, clinicians impacted BCBSMA's spending

According to the study, the single largest driver of post-pandemic spending on BCBSMA's commercial members was a shift in "service mix," which can encompass changes in patient demographics, what medical services they received and where they go for care, as well as how providers bill for that care.

Although the study did not specify in what ways utilization changed, it found that a surge in the number of medical services accounted for the majority of growth in the medical spending category.

Before the COVID-19 pandemic, service mix had been keeping BCBSA's spending growth low, researchers explained. By FY 2025, that was no longer the case, they said.

Utilization also notably increased much faster than prices, despite industry experts blaming prices as the greatest contributor to the U.S.' exorbitant healthcare costs.

Medical coding and billing also came into play for the BCBSA. The study identified higher coding intensity across septicemia admissions, office visits and emergency department visits. However, researchers did not put figures on just how much these coding changes contributed to increased insurer spending.

Still, this comes on the heels of a Blue Cross Blue Shield Association analysis, which found a $942 million increase in spending driven by AI-powered medical coding and billing solutions used by providers.

These providers and the companies developing the technology push back against claims of widespread upcoding to maximize revenue -- and the study could not say with certainty that providers aren't merely documenting more and therefore earning more.

However, Guerriere stated that changes in how providers use technology to document patient care are "a material driver of these rising costs" and warrant more research.

GLP-1s inflate insurer drug spending

While medical spending is generally the bulk of most insurers' spending growth, the study identified a significant increase in retail prescription drug spending after the pandemic.

BCBSMA's inflation-adjusted prescription spending growth neared 19% by FY 2025, up from a low of 1.7% the year before the pandemic. Nearly all of that was driven by higher GLP-1 costs, which increased by a whopping 83.7% versus 9.6% for all other retail drugs.

GLP-1s are wildly popular despite growing coverage restrictions enacted by payers to slow rapid spending increases. The drugs are expected to continue to drive up costs for payers into next year, when employee health benefits are predicted to increase by 9.5%, according to professional services firm Aon.

However, sustained GLP-1 use, especially for obesity, could eventually tamp down overall utilization -- the top driver of payer spending growth.

Research from Milliman already linked GLP-1s to fewer ED visits and inpatient admissions over four years. But coverage policies, eligibility rules and clinical documentation requirements will affect whether payers realize savings from more widespread use of the drugs, they said.

BCBSMA and Harvard researchers added that limiting the use of new and expensive drugs to high-value use cases will be a challenge. The group said stakeholders must find ways to cut prices for new products without discouraging innovation.

Still, understanding what has driven post-pandemic healthcare spending is key to creating reforms that meaningfully reduce costs, they said.

Jacqueline LaPointe is an Executive Editor at Xtelligent Healthcare Media, covering revenue cycle management, healthcare payers, health policy, and health IT since 2016. 

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