The federal government is set to launch a six-year pilot program on January 1 that will use artificial intelligence to determine coverage eligibility for certain medical procedures for Medicare enrollees. The program, known as WISeR, will begin in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington, sparking debate among medical professionals and lawmakers over its potential impact on patient care.
Key Takeaways
- A new Medicare pilot program, WISeR, will use AI for prior authorization in six states starting January 1.
- The stated goal is to reduce wasteful spending and unnecessary procedures in traditional Medicare.
- Critics, including doctors and lawmakers, raise concerns about potential privatization, care denials, and the role of AI in healthcare decisions.
- Third-party companies running the AI will be paid a share of the savings, creating a potential financial incentive to deny claims.
- Participation is voluntary for physicians, but the program marks a significant shift for traditional Medicare, which has rarely required prior authorization.
Details of the New AI-Powered Program
The U.S. Centers for Medicare and Medicaid Services (CMS) has initiated the program, officially named the Wasteful and Inappropriate Services Reduction (WISeR) model. It is designed to run for six years and will apply to beneficiaries enrolled in traditional Medicare, which covers approximately half of Washington's 1.6 million Medicare recipients.
Under the pilot, third-party companies will use artificial intelligence systems to review requests for specific outpatient procedures. These companies will decide if the requested care is medically necessary and therefore eligible for Medicare coverage. According to CMS, any denial made by an AI system must be reviewed by a human healthcare professional.
Targeted Procedures
The program will initially focus on procedures that the government considers to have high costs relative to their medical benefits. These include:
- Skin and tissue substitutes
- Impotence treatments
- Deep brain stimulation
- Cervical fusion
- Knee arthroscopy for osteoarthritis
A CMS spokesperson stated the objective “is to help patients avoid unnecessary, inappropriate procedures across a narrow set of services.” The agency selected Washington for the pilot to test the model in a diverse practice environment, ensuring the results are reliable and valid.
Concerns from Medical Professionals and Lawmakers
The introduction of AI-driven prior authorization has been met with significant criticism from patient advocates, physicians, and hospitals. Many worry that it introduces a new barrier to necessary medical care.
Dr. Matt Hollon of the Washington State Medical Association expressed surprise and disappointment with the news. “Patients expect their care to be guided by doctors, not insurance companies or automated systems,” he stated. This sentiment highlights a core fear that algorithms could override the clinical judgment of a patient's own physician.
The financial structure of the program is another major point of contention. The third-party contractors will be compensated with a share of the money saved by denying procedures. Critics argue this creates a direct financial incentive to deny care, regardless of medical necessity.
“The use of AI is looking at this sort of aggregation of data, right? That doesn’t apply to individual patients and may not recognize an individual circumstance, and then they get paid to deny care. It’s antithetical to health care.”
- Dr. Matt Hollon, Washington State Medical Association
In response, a CMS spokesperson said the companies will face penalties for wrongful denials and for decisions that are not made in a timely manner.
Fears of Medicare Privatization
Some lawmakers view the WISeR program as a move toward privatizing Medicare. Senator Patty Murray of Washington described it as a “backdoor move by Republicans to privatize Medicare and let AI decide who deserves health care.” She has pledged to oppose the initiative in the Senate.
This concern stems from the program's similarity to the prior authorization systems already used by private Medicare Advantage plans. Those systems have been widely criticized for creating delays and wrongfully denying care. Data shows that most denials under Medicare Advantage are overturned when appealed, but many beneficiaries are unaware of the appeals process and may abandon treatment.
Traditional Medicare vs. Medicare Advantage
Historically, a key difference between traditional Medicare and private Medicare Advantage plans has been the requirement for prior authorization. Traditional Medicare has rarely required pre-approval for services, while it is a standard and often frustrating component of Medicare Advantage plans managed by private insurers.
Jeb Shepard, policy director for the Washington State Medical Association, called the pilot the “first foray” into prior authorization for traditional Medicare, suggesting it could become mandatory in the future.
Impact on Hospitals and Daily Medical Practice
Hospitals and physicians are already familiar with the administrative burdens of prior authorization from private insurance. Taya Briley, general legal counsel at the Washington State Hospital Association, noted that while hospitals support ensuring care is necessary, they are concerned about “cumbersome processes that essentially just slow the system down.”
Dr. Bindu Nayak, an endocrinologist in Wenatchee, explained that managing prior authorizations is a significant part of a physician's daily work. “It adds a lot of time,” she said, time that could be better spent on direct patient care.
While participation in the WISeR pilot is voluntary for doctors, there is a catch. If physicians choose not to submit a prior authorization request, their claims will undergo a traditional pre-payment review after the service is provided. This means they risk not being paid for the procedure. The incentive to participate is gaining certainty that Medicare will cover the cost upfront.
Potential Positives and Ongoing Scrutiny
Not all feedback on the program is negative. Tim Smolen, a program manager at Washington’s Office of the Insurance Commissioner, suggested WISeR could be a “net positive” if it works as intended. “We’ll have a more definitive yes or no (if) Medicare is going to pay for it faster,” he said. “So there should be fewer surprises for providers and for beneficiaries.”
Meanwhile, the program is drawing scrutiny from federal lawmakers. U.S. Representative Suzan DelBene led a group of over a dozen colleagues in a letter to CMS Administrator Mehmet Oz, seeking more details about the pilot's design and goals. “This should be a bipartisan issue,” DelBene said, emphasizing the need for clarity on how the model will work.
AARP, a key advocacy group for older Americans, is also monitoring the situation. A spokesperson said the organization is “watching carefully,” balancing the need to address fraud and abuse with the priority of ensuring older Americans are not “denied legitimate treatments they need.”
