Blue Cross Blue Shield of Vermont: coding intensity, utilization and unit‑cost increases drive higher health spending

Ella Sodal, product owner for Provider Financials and Performance at Blue Cross Blue Shield of Vermont, told a legislative committee that the insurer’s analysis separates health‑care spending growth into three components: unit cost, utilization and coding intensity.

"When we look at health care costs, we try to break it down into 3 different elements," Sodal said. "So there's unit cost... utilization... and intensity." She said intensity — which captures the relative complexity or severity of services provided — is the hardest component to measure.

Sodal presented several findings from Blue Cross’ internal data covering 2019–2024 commercial claims (excluding Medicare primary and Medicare Advantage). At the inpatient level, she said case‑mix indices rose at the UVM Medical Center (UVMMC) by about 13% from 2021 to 2024 and rose about 10% at Dartmouth‑Hitchcock Medical Center (Mary Hitchcock was cited in the presentation as the Dartmouth affiliate). By contrast, she said combined data for other Vermont hospitals showed a roughly 7% decrease in inpatient intensity over the same period. Sodal said staff are "digging into" whether patient transfers to academic centers are driving those differences.

On office visits, Sodal described a shift in evaluation‑and‑management (E&M) coding toward higher‑complexity codes (for example, 99213 → 99214 → 99215). She noted a change in federal coding guidance in recent years that places greater weight on medical decision‑making rather than visit time, and reminded the committee that some documentation‑automation tools could alter how time‑based elements are recorded.

Blue Cross analysts estimated that, using 2019 as a baseline, the average office visit cost rose about 57% by 2024. In the presenter’s illustrative decomposition, roughly $52 of that $57 increase was attributable to unit‑cost changes (price), while about $5 was attributable to increased coding intensity. Sodal emphasized that utilization growth remains large and amplifies the effect of the other two factors.

Sodal also showed a case study of cardiac monitoring devices using 2022 commercial claims. The analysis bundled device, professional read and related codes to compare average total episode costs. Results the presenter cited: Holter monitor in an office averaged about $141; Holter in a facility averaged about $1,200; a 2–7 day ZeoPatch averaged roughly $660. Blue Cross spent "a little over a million dollars" on these services in 2022, she said, and the presenter concluded that place of service (office vs. facility) drove most of the cost differences rather than the device technology itself.

Committee members asked whether Blue Cross has audited coding changes and whether artificial‑intelligence documentation tools could be shifting how visits are coded. Sodal said audit results and detailed clinical correlation would require work with Blue Cross’ audit and clinical analytics teams and that some of those follow‑ups are under consideration. She confirmed the claims dataset presented excludes Medicare primary and Medicare Advantage, meaning the analysis covered commercial members roughly age 0–64 only.

Several committee members raised questions the presenter did not have ready answers for, including whether increased device or imaging utilization led to more downstream procedures (for example, pacemaker placement) and whether changes in population health or decreases in preventive care are contributing to higher acuity. Sodal said those were important clinical questions that would require additional review with clinical teams and vendors.

The presentation concluded with Sodal reiterating that utilization, unit cost and coding intensity together shape system spending, and with staff indicating they would pursue additional analysis requested by committee members.