The voluntary model will kick off on January 1, 2026, in six states to test whether enhanced technologies like artificial intelligence (AI) can speed up the prior authorization process for services considered vulnerable to fraud, waste, and abuse.
The Centers for Medicare & Medicaid Services (CMS) recently announced it will launch the Wasteful and Inappropriate Service Reduction (WISeR) Model for Original Medicare.
The innovation center model calls for CMS to partner with companies that specialize in enhanced technologies like AI and machine learning to test ways to improve and streamline prior authorization within Original Medicare’s existing processes.
The announcement comes in the wake of CMS’ support of a pledge by 50 insurers to improve and simplify the prior authorization process. Patients and providers have complained that Medicare Advantage plans have delayed or denied members access to services via prior authorization even when requests met Medicare coverage rules. Physicians also complain that the paperwork involved with prior authorization has become a burden and in some cases has led to serious adverse events for their patients.
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CMS said the pilot program will test prior authorization within Medicare for items and services that include, but are not limited to, skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy for knee osteoarthritis.
The model, which is meant to help patients and providers avoid unnecessary or inappropriate care while safeguarding federal tax dollars, will exclude inpatient-only services, emergency services, and services that would pose a substantial risk to patients if significantly delayed.
CMS said in a fact sheet that that companies selected for the pilot program will have expertise managing the prior authorization process for other payers using enhanced technology like AI and machine learning. Participating companies must have clinicians with the expertise to conduct medical reviews to validate determinations.
Furthermore, CMS said that while technology will support the review process, licensed clinicians, not machines, will make final decisions about whether a request for one of the selected services doesn’t meet Medicare coverage requirements.
Model participants will receive payments based on their ability to reduce unnecessary or non-covered services (inappropriate utilization) and lower spending in Original Medicare. Participants’ payments will be adjusted based on their performance against established quality and process measures that measure the model participants’ ability to support faster decision-making for providers and suppliers and improve provider, supplier, and beneficiary experience with the prior authorization process.
“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,” said CMS Administrator Dr. Mehmet Oz in the announcement.
The agency said waste in health care represents up to 25 percent of health care spending in the United States. Indeed, the Medicare Payment Advisory Commission estimates that up to $5.8 billion in Medicare spending in 2022 alone was spent on services with minimal benefit.
“Low-value services, such as those of focus in WISeR, offer patients minimal benefit and, in some cases, can result in physical harm and psychological stress,” said Abe Sutton, director of the CMS Innovation Center, in the announcement. “They also increase patient costs while inflating health care spending.”
CMS said the new model—which, according to the Federal Register, will be tested in New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington—will not change Medicare coverage or payment criteria. Health care coverage for Original Medicare beneficiaries will remain the same, and beneficiaries retain the freedom to seek care from their provider or supplier of choice.
The voluntary model will go through the prior approval process from January 1, 2026, to December 31, 2031. Applications to participate in the WISeR Model are due by July 25. Potential model participants are required to apply through the application portal.
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The Medical Group Management Association (MGMA) expressed concern about the pilot program. MGMA said in a statement that it supports tackling waste, fraud, and abuse in Medicare fee-for-service, but prior authorization “continually ranks as the number one administrative burden facing medical groups, and one of the hallmarks of traditional Medicare has been the ability for physicians, not government, to determine what’s clinically appropriate for their patients.” The CMS announcement contradicts recent commitments to ease the burden of prior authorization, MGMA said. “We look forward to working with CMMI and the administration on efforts to reduce waste and ensure they do not come at the cost of greater administrative burdens and interference with clinical decision-making."