Medicare launches AI review tool for prior authorization in six states starting January 1

5 Things for Doctors to Know About Medicare's 'Wasteful and Inappropriate Service Reduction' (WISeR) Model

Medicare will significantly expand the use of prior authorization (PA) and post-service review for select services beginning next year, and private contractors will be permitted to use artificial intelligence (AI) and machine learning to make coverage determinations, according to the Centers for Medicare & Medicaid Services (CMS). The change stems from the agency's new Wasteful and Inappropriate Service Reduction (WISeR) Model, a pilot program designed to curb fraud, waste, and abuse associated with certain "low-value services," such as nerve stimulators and steroid injections for pain management. PA requirements have long been routine in Medicare Advantage, with nearly 50 million determinations in 2023, according to KFF. In contrast, Medicare had about 400,000 determinations that same year, reflecting the more limited role utilization review has historically held in fee-for-service (FFS) Medicare. The WISeR rollout fits within a broader federal push to rein in healthcare spending. CMS has already finalized a 2.5% "efficiency" cut to physician payments, and lawmakers are scrutinizing other reimbursement mechanisms, including the American Medical Association's (AMA's) role in managing Current Procedural Terminology codes. Together, these moves signal a growing willingness by policymakers to use utilization measures and payment restructuring to curb spending. Here's what doctors need to know about the new model. 1. WISeR Will Roll Out in 6 States WISeR will launch in six states, namely, New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington, beginning January 1, 2026. It is scheduled to run through 2031 and applies to all providers and suppliers in those states who furnish certain items or services to Original Medicare beneficiaries. CMS describes WISeR as a voluntary model, but participation is not optional. Instead, providers and suppliers can choose between two pathways: Submit a PA request in advance for the required services, or proceed without a PA and have the claim routed through a post-service, prepayment medical review. Providers who submit PA requests will benefit from knowing in advance whether a service is eligible for payment, and those with demonstrated records of compliance may receive a "gold card" exempting them from the full WISeR review process, a program fact sheet explained. CMS said the model does not alter Medicare coverage policy and that payment rates for covered services will not change. WISeR is a pilot program through the CMS Innovation Center. Although the initial rollout is limited, the outcomes could inform Medicare policy decisions and determine whether the new process expands to additional states or providers nationwide. 2. WISeR Applies Only to Certain Items and Services Not all Medicare claims will be subject to the new process. CMS has limited the model to a specific set of high-risk items and services outlined below: * Electrical nerve stimulators * Sacral nerve stimulation for urinary incontinence * Phrenic nerve stimulator * Vagus nerve stimulation * Induced lesions of nerve tracts * Epidural steroid injections for pain management * Percutaneous vertebral augmentation for vertebral compression fracture * Cervical fusion * Arthroscopic lavage and arthroscopic debridement for the osteoarthritic knee * Hypoglossal nerve stimulation for obstructive sleep apnea * Incontinence control devices * Diagnosis and treatment of impotence * Percutaneous image-guided lumbar decompression for spinal stenosis * Skin and tissue substitutes, including application of bioengineered skin substitutes to lower extremity chronic nonhealing wounds and application of cellular and/or tissue-based products to lower-extremity wounds CMS claims that these services have little to no clinical benefit or may impose physical, financial, or emotional harm on patients. In addition, the agency's Federal Register notice earlier this year stated that WISeR may counteract Medicare's FFS payment structure, which may provide "an inherent incentive...for fraudulent actors to bill higher volumes of services, including those that are unnecessary or inappropriate." Common service locations will include hospital outpatient departments, ambulatory surgery centers, physician practices, and home care. Inpatient-only services, emergency services, and services that would pose a substantial risk if delayed are excluded from the model. 3. AI Will Expedite Authorizations, Says CMS CMS has contracted with private technology companies to administer WISeR reviews in participating states. The companies include Cohere Health, Genzeon, Humata Health, Innovaccer, Virtix Health, and Zyter. Each company will cover a participating state. The contractors will use AI and machine learning to expedite PA reviews, ensure compliance with existing coverage regulations, and deliver responses within 72 hours or less, according to agency documents. The contractors were chosen because they have "demonstrated success in managing prior authorization processes with enhanced technology for other payers [and] health plans," a provider fact sheet noted. Model participants will receive a percentage of the savings from "averted wasteful, inappropriate care" found during their reviews, with payments adjusted on metrics such as timeliness, determination accuracy, and provider experience. CMS will also penalize contractors for inappropriate denials. In the June announcement, CMS Administrator Mehmet Oz, MD, said the model would help eliminate waste and modernize Medicare oversight. "Combining the speed of technology and the experienced clinicians, this new model helps bring Medicare into the 21st century by testing a streamlined prior authorization process, while protecting Medicare beneficiaries from being given unnecessary and often costly procedures," he said. Although AI technology is central to the model, contractors must ensure that "appropriate clinical expertise" is incorporated into the preapproval and medical review processes. Human clinicians employed by the contractors must review denied requests, CMS documents explained, reflecting ongoing debates over the role AI should play in clinical and administrative decision-making. Still, a non-affirmed PA request does not prevent a provider from furnishing a service or submitting a claim. Providers may resubmit requests multiple times by sending supporting documentation to the WISeR contractor for their region or through their Medicare Administrative Contractor. Denied claims will continue to follow Medicare's existing administrative appeals process. 4. RFK Jr Has Pledged Widespread PA Reform Health and Human Services Secretary Robert F. Kennedy Jr pledged in June to streamline PAs across Medicare Advantage, Medicaid Managed Care, marketplace, and commercial plans. The announcement did not mention Medicare at the time; however, WISeR documentation indicates that the model reflects a similar approach to find the "right balance for review" and aligns with the pledge's goals to improve transparency around authorization decisions, expedite reviews using real-time responses for most requests by 2027, and ensure that healthcare professionals review clinical denials. 5. Physicians and Policymakers Are Split A recent AMA survey found that 88% of physicians reported that PAs led to higher utilization of healthcare resources, including additional office visits and ineffective initial treatment. Despite widespread frustration with existing authorization processes, lawmakers and the medical community remain divided over whether an AI-supported model like WISeR will meaningfully improve care delivery or simply incentivize denials. Representative Greg Murphy, MD, co-chair of the House GOP Doctors Caucus, said in a press release that streamlined PA processes could eliminate the "ridiculous and ever-increasing obstructions" that delay or deny care and force practices to hire additional staff to navigate the requirements. Representatives Ami Bera, MD, and John Joyce, MD, have supported PA reforms in Medicare Advantage but oppose WISeR. In a recent statement, Bera warned that extending the requirements to Medicare FFS could put profit over patients' health. "These decisions should be made by doctors, not by algorithms designed to cut costs...not [by] layering on more red tape that threatens access to timely, high-quality care," he said. Steph Weber is an award-winning freelance journalist specializing in healthcare and law.

Doctors on edge over Medicare's new AI review tool

Why it matters: While the change covers only 17 treatments or procedures in a handful of states, it marks a major shift for a program that's historically required very little prior authorization. * The reviews have generated huge controversy in privately run Medicare Advantage plans and drawn backlash from patients and physicians in commercial plans, who contend the process causes administrative headaches and delays care. State of play: The American Medical Association told Axios that some basic information -- like how to actually submit a prior authorization request -- is still unclear to providers with just a few days to go before the effective date. * AMA also said it's having discussions with the administration that "seem to be making progress." How it works: Starting Jan. 1, doctors in New Jersey, Ohio, Oklahoma, Texas, Arizona and Washington will have to get extra approval before Medicare pays them for certain outpatient services and procedures. * The change will apply to skin substitutes, deep brain stimulation for Parkinson's disease, impotence treatment, arthroscopy for knee osteoarthritis and a dozen other items and services, Centers for Medicare and Medicaid Services says. * CMS chose six AI tech vendors that will each process prior authorization requests in one of the selected states. * Providers can decide whether or not to submit an authorization request before delivering a service. If they don't, they'll be subject to post-claim review and risk not getting paid. Flashback: Medicare's innovation center announced the new reviews in June, saying they would focus on items or services that previous reports linked to fraud, waste and abuse or that were already subject to prior authorization in Medicare Advantage. * The focus on wasteful spending comes with Medicare projected to run short of money to pay for seniors' health care by 2033, and evidence shows that the program may have spent as much as $5.8 billion on low-value health care in 2022. Providers have urged CMS to delay the pilot, and Democrats in Congress introduced bills that would force administrators to stop the program. * "[T]he prior authorization pilot risks creating barriers to care, undermining patient outcomes, and imposing unsustainable administrative demands on practices," medical association presidents in the six states wrote to CMS in November. But CMS isn't slowing down, and doctors are preparing for the reviews. * The Washington State Medical Association is encouraging physicians to share feedback on their experiences so the organization can "press for accountability and reform," it said on its website. * The AMA last month vowed to work with CMS on prior authorization demonstration projects to ensure they protect patients and include "robust guardrails." * The American Hospital Association is still pressing for a delay, saying many of its member facilities haven't had enough time to understand and test out the new procedures, said Terrence Cunningham, senior director of administrative simplification policy. AHA in October asked for a delay of at least six months. Between the lines: One of providers' chief concerns is that the tech vendors managing the prior authorizations will get paid a percentage of the money saved by preventing unnecessary medical care. * "The more you deny, the more you get reimbursed," David Introcaso, a longtime health policy consultant, told Stat last month. "I mean, a third grader could see how that's a problem." The other side: CMS is putting the vendors through a rigorous audit process to evaluate what's getting approved and rejected, said Jeremy Friese, CEO of Humata, one of the companies chosen to participate in the pilot. * A CMS fact sheet says vendor participants will be "financially penalized" if they inappropriately deny claims. * Notably, claim denials will have to be reviewed by human clinicians, per CMS. * "The current [prior authorization] process frankly doesn't work for anybody, not providers or payers, and it just needs to be done differently," said Friese, a doctor. "This is the first step in that direction." The bottom line: Worries about the model are valid, but they're also not a reason to avoid trying something new, according to Liz Fowler, who directed the Medicare Innovation Center in the Biden administration.