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Why AI Still Isn’t Fixing Patient Referrals—And How It Could

By NAHEEM NOAH

A Call from the Black Hole

Three months into building Carenector’s facility-to-facility platform, I got a call that crystallized everything wrong with healthcare referrals. A hospital social worker, who was already using our individual patient platform to help families find care, had been trying to coordinate an institutional placement for an 82-year-old stroke patient for six days. She’d made 23 phone calls. Sent 14 faxes. The patient was medically cleared but stuck in an acute bed costing $2,000 per day because no one could confirm which skilled nursing facilities had open beds, accepted her Medicaid plan, and had stroke rehabilitation capacity.

“I love what you built for patients,” she told me, “but when I need to do a facility-to-facility transfer, I’m back to faxing. Can’t you fix this workflow, too?”

She wasn’t wrong. We’re in 2025, and despite billions poured into health IT and breathless AI promises, referring a patient often feels like stepping back into 1995. Earlier this year, THCB’s own editor Matthew Holt documented his attempt to navigate specialist referrals through Blue Shield of California. The echocardiogram referral his doctor sent never arrived at the imaging center. When he needed a dermatologist, his medical group referred him to a provider who turned out not to be covered by his HMO plan at all. “There is a huge opportunity here,” Holt concluded after his odyssey through disconnected systems, “even though we’ve got now a lot of the data…to integrate it and make it useful for patients.”

Clinicians make over 100 million specialty referrals annually in the U.S., yet research shows that as many as half are never completed.

Here’s what we’ve learned after a year of operation: we built a consumer-facing platform that helps individuals and families find care providers matching their needs, insurance, and location—it now serves over 100 daily users, including patients, social workers, and discharge planners. But solving individual care searches is only half the battle. The institutional referral workflow—hospital to skilled nursing facility, SNF to rehab center, clinic to specialist—remains trapped in fax machines and phone tag because no one redesigned the actual coordination process.

That’s what we’re building now. And the question haunting us isn’t why we don’t have better tools? It’s why billions in AI investment left the institutional referral workflow virtually unchanged?

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Brown and Toland weighs in on the $34.94 Labcorp test. (Part 6)

By MATTHEW HOLT

I know you all care, so I am giving a 6th update on the telenovela about my Labcorp bill for $34.95.

The very TL:DR summary of where we are so far is that in May 2025 I had a lab test to go with the free preventative visit that the ACA guarantees, but I was charged for the lab tests and I was trying to find out why, because according to CMS I should not have been.

For those of you who have missed it so far the entire 5 part series is on The Health Care Blog (1, 2, 3, 4 & 5). Feel free to back and read up.

When we left the scene on Sept 9, Blue Shield of California had finished their 30 day investigation and their rep read me the letter they sent me (that I couldn’t open due to their secure email not working). The letter told me that Brown & Toland Physicians, the IPA that manages my HMO, was going to investigate. Today I got a text from Blue Shield alerting me to a secure email and I got all excited, but it was nothing to do with this. And of course I should have heard from Brown and Toland in October or November.

So I decide to pick it all up again, and I called Brown & Toland Physicians or actually Altais which is the holding company that owns them and Blue Shield. I got through the phone tree and eventually got, “leave your number and get a call back” which actually happened not too long later.

The very nice rep tried to figure out my case and told me this:

On 8/14/2025 Mike at Blue Shield called Brown and Toland and asked for the original claim to be reviewed (1430201). I am pretty sure Mike is the nice man from the Executive Admin office at Blue Shield we met in part 2 (or was it part 3?).

On 8/29/2025 the benefits department at Brown and Toland finished their review and reported that the original lab test wasn’t coded as preventative lab services by One Medical, so that the co-pay of $34.95 was correct. ($34.95 was the total agreed payment for all the tests, charged at a total of $322.28. And as it was less than my $50 copay, LabCorp only charges the patient for the total, not the $50!)

Meanwhile, that 30 day Blue Shield investigation was still going on. It ended up with them asking Brown and Toland to investigate. Presumably as a direct result of that, on 9/9/2025 Kelly from Blue Shield called Brown and Toland and sent them the $34.94 claim asking them to review it. (Again, as it turns out, as they just had reviewed it on 8/29/2025).

“So what happened?” I asked today.

My rep told me that whomever at Brown and Toland spoke to Kelly on 9/9/2025 didn’t get or didn’t put in correctly the claim reference number, and so when they passed it on to the adjuster in the benefits department it couldn’t be worked on, and so nothing happened since then. So much for their 30 day investigation!

However my nice rep today told me the results of the 8/29/2025 benefits analysis which as previously mentioned was that when Labcorp got this claim submitted it was NOT coded as preventative. So the solution is that One Medical needs to change the diagnosis or CPT codes and resubmit the corrected order at Labcorp so that Labcorp can bill Brown and Toland for these as preventative services, and presumably get its $34.95 directly from them. As of now, that’s it.

I am of course girding my loins and preparing to ask One Medical to re-submit that lab claim with the preventative codes.

Meanwhile, I mentioned to my nice rep that I had two subsequent tests that I was not billed for. One was a Fit test in which One Medical sent me home with a kit to scoop my poop. That seems definitely to be preventative as it was to test for colon cancer. The other was a set of tests for low iron ordered during my preventative care visit because my iron levels looked a little low. My guess is that doesn’t fit the preventative category and I should have paid for that.

You may recall that iron test was billed at $0 and neither me nor the Labcorp rep who was working the case with me quite understood why.

Turns out Brown and Toland think that I should have paid a co-pay for both of those tests. The Fit test billed on 5/18/25 was $15.60 (1537124). By the way, Brown and Toland is getting a good deal as the cash price Labcorp charges consumers for that is about $90! The iron test was billed at $60.79.

You’ll recall my lab copay is $50, so Labcorp should have been charged me the lower of the copay or the actual total. Which is $15.60 for the Fit test and $50 for the iron test.

I got no charge for either.

By the way, I would like to show you the EOB from Blue Shield, but as they cancelled and reinstated my insurance last month, their online site has wiped all my EOBs!

So I agreed with the Brown and Toland rep when she suggested that they investigate the $15.60 bill for the Fit test to see if there should be a co pay, and I may hear from them in 30-45 business days.

And just to square the circle I will (probably) ask One Medical to resubmit the claim!

And yes this is all totally ridiculous and it all indicates why health care is so overly complex and why no consumer can figure out what is going on.

CODA: Meanwhile I was contacted by a journalist asking about ChatGPT being used to to sort out and protest medical bills. So I went down that rabbit hole a little too.

Matthew Holt is the founder and publisher of THCB

Travis Rush & Kala Weeks, Reperio

Reperio Health is trying to really boost the delivery of at home health testing, including not only weight and blood pressure but also cholesterol, obesity and blood sugar. Having use the kit and done an at home demo, I’m pretty interested to see if this can be a front-end telehealth service to get the average middle aged adult into a preventative health checkup. (Here was my experience)

I spent some time at the HLTH conference back in October talking with Travis Rush, CEO and Kala Weeks, VP Marketing to discuss how it works, who they are targeting and what their metrics are. And how they think this will roll out — Matthew Holt

Let’s get moving on AI-discovered treatments

By STEVEN ZECOLA

Recursion Pharmaceuticals announced results today for one its AI-discovered treatments. I was pleased to see the large, sustained reduction in polyps attributable to its treatment for Familial Adenomatous Polyposis.  Recursions’ oral medication will be viewed by the traditional scientific and regulatory community as “promising”.

On the other hand, I was disappointed not to see/hear any reference to the savings of the cost to society from this treatment and a vague reference to working with the FDA in 1H2026.  Quite frankly, the urgency seemed to be lacking.

Currently, treating FAP is an expensive, lifelong endeavor for the 50,000+ survivors. Early detection strategies cost $10k+ and late detection $37k+. The cost to treating metastatic colorectal cancer (for which FAP predisposes) can be extremely high, up to $300,000.  Overall, the cost to society from FAP easily exceeds $1 billion per year, or more than $15 billion on a present value basis.

This medication should not be subject to any further regulatory delay.  There is enough information now on efficacy and safety to have Recursion more forward with a broad application of this treatment, while continuing test dosage levels and stratifying the patient population.  The alternative is more needless cost and suffering.

Steve Zecola sold his web application and hosting business when he was diagnosed with Parkinson’s disease twenty three years ago.  Since then, he has run a consulting practice, taught in graduate business school, and exercised extensively

Health Insurance Cancel Culture

By MATTHEW HOLT

Strap in for a dramatic tale in which our hero battles bureaucracy and logic to try to get his health insurance back.

About 20 years ago lots of Americans, especially Californians who bought health insurance from Blue Shield of California, found that their coverage was cancelled without them knowing about it. That practice called “recission” got lots of attention during the run up to the ACA, and was banned by it. Now if you want to buy insurance and you pay for it, the insurance company has to sell it to you and can’t cancel it after the fact.

Or so I thought.

Post ACA most people who don’t get their insurance through an employer, or Medicare or Medicaid, now buy it via a very regulated “individual market” on a state-based or Federal exchange. Generally, the insurance they buy is heavily standardized (with bronze, silver or gold levels) and what they pay for insurance is heavily subsidized based on income. It’s those subsidies that were increased in the pandemic and extended in the Inflation Reduction Act (IRA) during the Biden administration. The subsidies were the topic–still unresolved–of the latest government shutdown. (Yes, yes, I know the shutdown is over—for now).

It’s pretty much impossible to buy individual insurance outside the exchange, although if you have Scott Galloway levels of wealth you can avoid buying insurance altogether and pay cash and you might be better off, or you can join some quasi-religious health share organization and take your chance. But for most people you are way better off buying on the exchange because that’s the only way you can get those subsidies.

I live in California and remain an under-employed blogger, and a few times in my recent life I have not been married to someone with health insurance provided by their employer. It happened in 2016-17 and again two years ago. No, not what you’re thinking. I didn’t get kicked to the curb by my wife, but in 2022 she got laid off by her employer and decided not to get another job. For the first year of that period (2023) we did not buy via the exchange, but used COBRA. That means we bought into her previous company’s insurance using our own money because it was cheaper than buying on the exchange. Two reasons for this. First, she got a severance package that made our combined incomes too high to get a subsidy and secondly, the ACA plans charge by age, whereas employers pay a flat fee for all employees. That made the exchange plan more expensive than the employer plan. (No prizes for guessing who in our family is old and expensive!)

But COBRA only lasts a year, and then it was time to head back to Covered California.

This starts a process where you try to figure out which plan offered is the cheapest, yet includes your and your family’s doctors, and which one has the lowest associated fees for the stuff you use the most (usually pediatric visits in our case). Turns out that in our case is the Blue Shield Trio 73 HMO. My inability to understand why it’s called Trio 73 reveals why no one calls me a marketing genius.

The other thing you have to figure out is what level of subsidy you get. As mentioned, the IRA passed in 2022 extended the pandemic emergency increase in subsidies for people with higher incomes. But then again, you have to figure out what your income will be when you sign up. Like the audience laughing at an obvious punch line a comedian hasn’t gotten to yet, those of you running ahead of me will have worked out a slight problem here.

I was signing up for a 2024 health plan in 2023. But I had to guess what my 2024 taxable income would be. Like many self-employed people with extremely variable income I had no idea what that final income would be until I filed my 2024 taxes in October 2025 (given I take the IRS extension). In other words, almost two years after I chose the plan. It turns out that in California, the people who track your income are not your health plan, nor the exchange but instead your local county health department. So in November 2023 I guessed my 2024 income and had to tell the local county what that guess is via some affidavit. The county health department actually called me to check that my estimate was correct. Or at least was what I told them it was.  Remember this for later.

Meanwhile I sign up on what I regard to be a very complex web site run by Covered California, and select the aforementioned Blue Shield HMO. It covers One Medical and UCSF theoretically via the Brown & Toland IPA, and leads to lots of fun and games in terms generating much content for me on this blog and Linkedin.

As it turns out, I was sent for an echocardiogram by my primary care doctor this past summer to check if I had a heart. While many of you were surprised at the answer (yes, I do), apparently it’s got a congenital disorder that needs a little help.

This gets us to November 2025 (last month!) with your brave hero going back onto the Covered California exchange trying to figure out whether the cardiologist recommended by my primary care doc is covered by the 2026 version of the Blue Shield plan I am on, or whether I need to switch. I could now digress and tell you the late Ian Morrison’s formula for choosing a health plan but I will hold that for the next telenovela article as of course that process is a fricking mess too!

In order to try to do that I login to the Covered California site and see I have a notice that I am not eligible for health insurance. I am confused.

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Why Patients – And Many Innovative Doctors – Are Pursuing Health Outside the System

By DAVID SHAYWITZ

Our current system of delivering care is awful from the perspective of seemingly every stakeholder. It frustrates, enrages, saddens, and depletes patients and physicians alike. No one designed it this way. It evolved through a series of choices and contingencies that perhaps made sense at the time but now seem to have led us down an evolutionary dead end.

While there’s no shortage of examples, I was especially struck by an anecdote I heard in Dr. Lisa Rosenbaum’s brilliant “Not Otherwise Specified” podcast series for the NEJM. Her focus this season is primary care, and in one episode she speaks with a Denver family physician named Larry Green.

“I practiced in the oldest family practice in Denver, for years,” Green explains. “I was the chair of that department, I directed that residency, and I’m now a patient in that practice. I cannot call it. It’s impossible. Because when I call the practice, I get diverted to a call center…”

From the perspective of what he calls the “medical-industrial complex,” he says, longitudinal relationships are “totally unimportant in healthcare.”

Yet these relationships – developed with care over time – tend to be what many patients crave and what effective doctoring typically requires.

Green’s experience won’t surprise anyone who has tried to get care lately. In November 2023, Mass General Brigham announced it would not be accepting new primary care patients. At hospitals everywhere, it’s not unusual for patients to spend hours on gurneys in emergency-department hallways, waiting for an inpatient bed.

I don’t know many physicians who haven’t struggled to get care for themselves or a loved one – often at the very institutions where they trained and to which they’ve devoted years of their lives. If even insiders can’t reliably access timely, compassionate care, what chance does anyone else have?

The miserableness of the system has been well documented, and physician burnout has sadly become a dog-bites-man story.

Applicants Are Still Flocking to Medical Schools

What’s perhaps more surprising is how many people are still desperate to enter the system and become physicians, fueling an application process that, as Drs. Rochelle and Loren Walensky have documented in The New England Journal of Medicine (NEJM), has become increasingly competitive, expensive, and time-consuming. Premed students routinely take an extra year (or more) to tick all the expected boxes and jump through the hoops that are perceived as mandatory.

This highlights something that’s easy to forget: the ideal of medicine remains deeply attractive. I wrote about this almost thirty years ago in a New York Times op-ed, and it’s still true today.

The notion of doctoring – of being trusted at the intersection of science and human stories – retains a powerful hold on young people. If only the actual experience could live up to the hope of these applicants, the well-worn quotes from Osler and Peabody, the promise of the profession, and the expectations of patients.

Searching For A Better Alternative

The idea that there must be a better alternative is at once familiar and evergreen.

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If You Could read My Mind – Wait, You Can?

By KIM BELLARD

Over the years, one area of tech/health tech I have avoided writing about are brain-computer interfaces (B.C.I.). In part, it was because I thought they were kind of creepy, and, in larger part, because I was increasing finding Elon Musk, whose Neuralink is one of the leaders in the field, even more creepy. But an article in The New York Times Magazine by Linda Kinstler rang alarm bells in my head – and I sure hope no one is listening to them.

Her article, Big Tech Wants Direct Access to Our Brains, doesn’t just discuss some of the technological advances in the field, which are, admittedly, quite impressive. No, what caught my attention was her larger point that it’s time – it’s past time – that we started taking the issue of the privacy of what goes on inside our heads very seriously.

Because we are at the point, or fast approaching it, when those private thoughts of ours are no longer private.

The ostensible purpose of B.C.I.s has usually been as for assistance to people with disabilities, such as people who are paralyzed. Being able to move a cursor or even a limb could change their lives. It might even allow some to speak or even see. All are great use cases, with some track record of successes.

B.C.I.s have tended to go down one of two paths. One uses external signals, such as through electroencephalography (EEG) and electrooculography (EOG), to try to decipher what your brain is doing. The other, as Neuralink uses, is an implant directly in your brain to sense and interrupt activity. The latter approach has the advantage of more specific readings, but has the obvious drawback of requiring surgery and wires in your brain.

There’s a competition held every four years called Cybathlon, sponsored by ETH Zurich, that “acts as a platform that challenges teams from all over the world to develop assistive technologies suitable for everyday use with and for people with disabilities.” A profile of it in NYT quoted the second place finisher, who uses the external signals approach but lost to a team using implants: “We weren’t in the same league as the Pittsburgh people. They’re playing chess and we’re playing checkers.”  He’s now considering implants.  

Fine, you say. I can protect my mental privacy simply by not getting implants, right?  Not so fast.

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Katie D’Amico, Carequest–Integrating Oral Health into Medical Care

Katie D‘Amico is the VP of Innovation at Carequest, a non-profit that supports oral health–she’s a big proponent on its integration with medical care. At HLTH in October 2025 she took me on a brief tour of innovation in dental care and oral health. We had a quick look at the ability to test collagen breakdown and how to use the dental office to refer to lab tests. I also had a brief chat with Dr Ashley Lerman from Firstgrin, which is helping kids take care of their teeth, and distributing her kits and apps via health plans and hospitals–Matthew Holt

Nabla — It’s been a rocketship

I met the Nabla management team two years ago. Two years later they have ridden the wave of AI scribing to be one of the leaders in the field. At HLTH this year, I caught up with CEO Alex Lebrun and COO Delphine Groll to check in on their growth (150 customers and 100K users) what the next little bit of ambient AI scribing will look like (more specialties, more integration) and whether they’re scared of Epic (no!).–Matthew Holt

When Your Cloud Provider Doesn’t Understand HIPAA: A Cautionary Tale

By JACOB REIDER & JODI DANIEL

Jacob: I recently needed to sign a Business Associate Agreement (BAA) with one of the large hosting providers for a new health IT project. What should have been straightforward turned into a multi-week educational exercise about basic HIPAA compliance. And when I say “basic,” I mean really basic, like the definitions in the statute itself.

Here’s what happened and why you need to watch out for this if you’re building health care technology.

I’m building a system that automates clinical data extraction for research studies. Like any responsible health care tech company, I need HIPAA-compliant infrastructure. The company (I’ll call them Hosting Company or HC) is good technically, and they’re hosting our development environment, so I signed up for their enhanced support plan (which they require before they’ll even consider a BAA) and requested their standard agreement.

The Problem

HC’s BAA assumes every customer is a “Covered Entity.” That means a health plan, a health care clearinghouse, or a health care provider that transmits health information electronically.

But that’s not me. I’m not a Covered Entity. I’m a Business Associate (BA). I handle protected health information on behalf of Covered Entities. When I need cloud infrastructure, I need my vendors to sign subcontractor BAAs with me.

The Back and Forth

When I told HC that I couldn’t sign their BAA as written, they escalated to their legal department. Days later, a team lead came back with this response:

“To HC, even if you are a subcontracted or a down the line subcontracted association. It would still be an agreement between the covered entity within the agreement and HC… So even being a business associate, it would still be considered a covered entity since it is your business that is being covered.”

I had to read it twice. This is simply wrong.

Jodi: Let me chime in here with the legal perspective, because this confusion is more common than it should be.

The terms “Covered Entity” and “Business Associate” aren’t interchangeable marketing terms. They have specific legal definitions in 45 CFR § 160.103. You can’t just redefine them because it’s administratively convenient. Generally… covered entities are (most) health care providers, health plans, and health care clearinghouses; business associates are those entities that have access to protected health information to perform services on behalf of covered entities; and subcontractors are persons to whom a business associate delegates a function, activity, or service.

Here’s what the regulations actually say:

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