CMS pilots AI in Medicare prior authorizations

The Centers for Medicare & Medicaid Services (CMS) is launching a significant pilot program to integrate artificial intelligence (AI) into prior authorization processes within Original Medicare. This new effort is part of the Wasteful and Inappropriate Service Reduction Model (WISeR), set to begin January 1, 2026, running through the end of 2031. The pilot will operate across six states: New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington.

WISeR’s approach targets a predefined list of services deemed prone to waste, fraud, or misuse. These include procedures such as skin and tissue substitute applications, nerve stimulator implants, knee arthroscopies, and select spinal and pain management treatments. Providers must submit prior-authorization requests for these services, introducing a substantial shift for Original Medicare, which traditionally has required minimal prior approvals.

AI technology will assist in speeding up and refining the review process, but CMS emphasizes that final authorization decisions will be made by licensed clinicians. The selected external vendors, contracted by CMS to handle these reviews, will be evaluated based on their capacity to reduce unnecessary service utilization. Their oversight and accountability have become focal points for stakeholders monitoring the pilot’s progress.

Challenges and stakeholder concerns

Despite potential benefits, WISeR has met criticism reminiscent of prior authorization challenges in Medicare Advantage plans. Concerns center around possible care delays, denials of medically necessary services, and heightened administrative burdens for providers. There is particular unease regarding reliance on AI and vendor-managed decisions potentially leading to overly restrictive denials or inconsistent approval practices.

Transparency in decision criteria and adequate clinical oversight remain critical issues. Some policymakers and provider groups have responded by proposing legislation to halt WISeR’s rollout, reflecting the ongoing debate over balancing cost control with care access and quality.

Implications for Medicaid and IDD care providers

The pilot’s outcomes could influence broader prior authorization practices beyond Medicare. For agencies serving individuals with intellectual and developmental disabilities (IDD) and Medicaid/HCBS providers, the introduction of AI-supported review processes signals potential changes in service approval, documentation standards, billing, and compliance expectations. As CMS evaluates WISeR’s effectiveness and patient impact, these providers should monitor developments closely. Decisions on expanding the model to other states or services may affect operational practices and regulatory requirements across the care continuum.

Looking ahead, transparency, clinician oversight, and swift resolution processes will be essential for ensuring that efficiency gains do not compromise access to necessary care.