Program details

The Wasteful and Inappropriate Service Reduction (WISeR) program will affect Medicare patients and the providers who care for them from Jan. 1, 2026, through 2031. The program will start in six states: Arizona, Ohio, Oklahoma, New Jersey, Texas, and Washington.

The program will test the use of an AI algorithm to make prior authorization decisions for some Medicare services, including skin and tissue substitutions, electrical nerve stimulator implants, and knee arthroscopy.

According to CMS, these procedures are especially vulnerable to "fraud, waste, and abuse." CMS spokesperson Alexx Pons said the aim of the program is to protect "patients and Medicare dollars."

Abe Sutton, director of the Center for Medicare and Medicaid Innovation, said the pilot program will examine practices that are particularly expensive or potentially harmful to patients. "This is what prior authorization should be," Sutton said.

Other procedures could be added to the list for the WISeR program, but services that are inpatient-only, emergency, or those that "would pose a substantial risk to patients if significantly delayed" wouldn't be subjected to the AI model's assessment, according to CMS.

Pons noted that no Medicare request will be denied before being reviewed by a "qualified human clinician," adding that the AI companies overseeing the program "are prohibited from compensation arrangements tied to denial rates." While CMS said the AI companies will be rewarded for the Medicare savings they generate, Pons said that multiple safeguards will "remove any incentive to deny medically appropriate care."

Pons added that the use of AI in the program will be "subject to strict oversight to ensure transparency, accountability, and alignment with Medicare rules and patient protection."

Experts and politicians express concern

The announcement of the pilot program has been met with some skepticism from both healthcare experts and politicians.

Traditional Medicare, which covers adults ages 65 and older, along with some people with disabilities, has generally shied away from using prior authorization. However, the practice is widely used by private insurers, especially in the Medicare Advantage market, with insurers arguing that prior authorization reduces fraud and wasteful spending while also preventing potential harm.

"While prior authorizations have always been a burden, these requirements have become untenable for many of our provider client partners in the last three to five years in particular, with both increasing commercial and Medicare Advantage prior authorization requirements. Consider traditional Medicare being thrown into the mix, and the ability for providers to manage an ever-growing influx of prior authorization requirements is headed for a breaking point," said Samantha Wyld, a senior director at Optum Advisory*.

Experts have agreed that AI could theoretically expedite the prior authorization process, which is often cumbersome and marked by delays and denials that can harm patients. Insurers have argued that AI eliminates human error and bias and saves the healthcare system money, insisting that humans, rather than computers, are ultimately reviewing coverage decisions.

However, some experts are skeptical that's what's actually happening.

"Many provider leaders I'm working with are hopeful regarding the promise of automation to help streamline prior authorization processes from the provider lens regarding accurately identifying which patients need prior authorization and helping to compile the required documentation to submit for a prior authorization request in a wholly or mostly automated fashion. But many leaders grapple with whether a bot should make the determination of whether a prior authorization should be approved or denied on the payer side," Wyld said.

Rathi added that the program would recreate some of the same obstacles that exist in Medicare Advantage. "It's basically the same set of financial incentives that has created issues in Medicare Advantage and drawn so much scrutiny," he said. "It directly puts them at odds with the clinicians."

If the algorithm used in the WISeR program proves to save the government money, Rathi said he's concerned CMS would feel justified in broadening the program to include services that aren't such "low-hanging fruit."

"You're kind of left to wonder, well, where does this lead next?" he said. "You could be running into a slippery slope."

During a hearing of the House Energy and Commerce Committee, Michelle Mello, a health law professor at Stanford University, said it's possible that prior authorization could help contain costs, but it's unclear whether AI will be proficient at handling the process.

"We have pretty good evidence that prior authorization as a process itself is fraught," Mello said, adding that AI's ability to improve the process for patients has yet to be proven. "We don't know, because there's no publicly available information that would enable someone like me to be able to tell you, 'Does using AI make prior authorization better for patients or worse?' Because I think both outcomes are very possible," she said.

A number of politicians have expressed concerns about the program as well. A group of House Democrats sent a letter to government officials in late July that said giving for-profit companies a "veto" over care "opens the door to further erosion of our Medicare system."

"I'm concerned that this AI model will result in denials of lifesaving care and incentivize companies to restrict care," said Rep. Frank Pallone (D-N.J.), the ranking Democrat on the House Energy and Commerce Committee.

"So long as misaligned incentives (or the perception thereof) continue to challenge ability to generate mutual trust between payers and providers in the prior authorization process, I suspect we'll continue to see widespread pushback regarding programs like WISeR and few states or organizations raising their hand to participate voluntarily," Wyld said.

Rep. Greg Murphy (R-N.C.), a urologist and cochair of the House GOP Doctors Caucus, acknowledged that many physicians are concerned the program could overreach into their practice of medicine if the algorithm denies doctor-recommended care.

Murphy added that while AI in healthcare is here to stay, it remains to be seen whether the WISeR program will save Medicare money or contribute to problems already posed by prior authorization.

"This is a pilot, and I'm open to see what's going to happen with this, but I will always, always err on the side that doctors know what's best for their patients," Murphy said.

*Advisory Board is a subsidiary of Optum. All Advisory Board research, expert perspectives, and recommendations remain independent.