The Centers for Medicare & Medicaid Innovation (CMMI) is set to launch a six-year demonstration project in 2026, known as the Wasteful and Inappropriate Service Reduction (WISeR) Model. This initiative will introduce artificial intelligence (AI) into the prior authorization process for traditional Medicare beneficiaries, marking a significant shift towards automated healthcare oversight.
The Expansion of Prior Authorization
Currently, prior authorization is heavily utilized in Medicare Advantage plans, where roughly 54% of seniors and disabled individuals are enrolled. These plans routinely restrict access to procedures and technologies through pre-approval requirements. Traditional Medicare, in contrast, uses prior authorization sparingly, covering only 52 outpatient services, specific medical equipment, and non-emergency ambulance transport.
The WISeR model seeks to expand this practice by allowing for-profit contractors to use AI tools to determine treatment protocols for Medicare enrollees. This mirrors the existing approach in Medicare Advantage, where insurers deny coverage unless procedures are deemed “medically necessary.” In the case of prescription drugs, prior authorization often applies to brand-name medications with generic alternatives or high-cost therapeutics.
How the WISeR Model Will Function
CMMI claims the WISeR model will “protect taxpayers” by “streamlining” prior authorization using machine learning and human review. The project will launch in six states – New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington – with vendors receiving financial incentives based on “averted expenditures,” meaning they profit from denied care.
Critics, such as Wendell Potter, a former Cigna executive and health insurance payment reform advocate, argue that this could lead to delays in care and unwarranted denials. Six Democratic lawmakers have already proposed the Seniors Deserve SMARTER Care Act to block the program before its scheduled start in January 2026.
The Rise of AI in Healthcare Denial
Medicare Advantage plans are increasingly adopting AI to assess the necessity of care, leading to millions of annual denials based on prior authorization. While patients can appeal, the process is often complex and time-consuming. NBC News reported instances where patients are “stuck in prior authorization purgatory,” while an Office of Inspector General memorandum found that Medicare Advantage plans incorrectly denied services despite meeting coverage rules.
Health insurers have pledged to improve pre-approval protocols for diagnostic tests, medications, and hospital procedures, promising to reduce denials and resolve 90% of requests in real time by 2027. They also hope that AI will facilitate “patient-friendly” decision-making, but skepticism remains high.
The Debate Over Prior Authorization
Historically, prior authorization was intended to ensure appropriate medication use and patient safety, particularly for drugs with potential risks. Ideally, the policy could optimize healthcare spending by nudging doctors towards cost-effective alternatives. However, critics argue that imposing such restrictions can increase administrative burdens, delay care, and ultimately worsen health outcomes.
The success of the WISeR model hinges on whether AI can efficiently reduce wasteful spending without compromising patient access to necessary treatments. If implemented poorly, the program could further exacerbate the existing challenges of prior authorization, leading to unnecessary delays and denials.
Ultimately, the WISeR model represents a bold experiment in healthcare cost control. Its success or failure will depend on whether AI can strike a balance between financial efficiency and patient care.
