Medicare Launches AI-Driven Prior Authorization Program Amidst Concerns Over Access

WASHINGTON – The Centers for Medicare & Medicaid Innovation (CMMI) launched the Wasteful and Inappropriate Service Reduction (WISeR) Model on January 1, 2026, initiating a new prior authorization process for select medical services in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. The program, designed to leverage artificial intelligence (AI) and machine learning (ML) to review the appropriateness of care, comes as scrutiny of prior authorization practices intensifies across the healthcare industry.

The WISeR model represents a significant shift for traditional Medicare, which historically has rarely required prior authorization. Currently, such requirements are commonplace in Medicare Advantage plans and private insurance. CMMI has partnered with private health technology companies – Cohere Health, Genzeon Corporation, Humata Health, Innovaccer Inc., Virtix Health, and Zyter Inc. – to administer the reviews, with the companies eligible to receive shared savings based on denied service requests. The selected services include skin substitutes, orthopedic pain management procedures, electrical nerve stimulator implants, incontinence control devices, and treatments for impotence.

The rollout of WISeR follows a voluntary effort announced by the Trump administration in July 2025, where dozens of private insurers pledged to streamline prior authorization processes. Despite this, concerns remain about the potential impact on patient access and provider workloads. An amendment to block funding for the WISeR model was approved by the House Appropriations Committee in September 2025, but was ultimately not included in the Consolidated Appropriations Act of 2026, signed into law in February 2026, allowing the program to proceed.

An analysis of Medicare data from 2019 to 2024 reveals that WISeR-targeted services accounted for 5.3% ($12.3 billion) of all Part B spending in traditional Medicare in 2024, a substantial increase from 1.1% ($2.4 billion) in 2019. However, the vast majority of this spending – 83% ($10.3 billion) in 2024 – is attributed to skin substitutes. Spending on skin substitutes has increased dramatically, rising over 20 times from $509.6 million in 2019 to $10.3 billion in 2024.

This surge in skin substitute spending is largely driven by a steep increase in the average price per service, which rose 820% from $2,300 in 2019 to $21,200 in 2024. In response, CMMI has implemented nationwide changes to payment policy, reclassifying skin substitutes and establishing a fixed reimbursement rate of $127.28 per square centimeter, effective January 1, 2026. CMS estimates this change will reduce Medicare spending on skin substitutes by nearly 90% in 2026, potentially eclipsing any savings generated by the prior authorization requirements within the WISeR model itself.

Approximately 1.1 million traditional Medicare beneficiaries nationwide received at least one WISeR service in 2024, with the majority (86%, or 908,000) receiving orthopedic pain management services. Only 9.3% (98,000) received skin substitutes. Of those utilizing WISeR services, 207,500 (19.7%) were located in the six WISeR model states.

Per capita spending on WISeR services varied significantly among the six states, ranging from $202 in Ohio to $748 in Oklahoma. This variation was largely attributable to differences in per capita spending on skin substitutes, which ranged from $143 in Ohio to $674 in Oklahoma.

The rollout of the WISeR model occurs at a time when a majority of U.S. Adults with health insurance (69%) report that prior authorization is a burden, with 34% identifying it as their single biggest healthcare burden, exceeding even cost concerns. Concerns have been raised about potential delays and denials of medically necessary care, as well as increased administrative burdens for healthcare providers, mirroring issues experienced in Medicare Advantage plans. Several large insurers have faced congressional investigation and lawsuits related to inappropriate coverage denials based on artificial intelligence tools.

While CMS has stated the WISeR model may be expanded to include additional services and states in future years, the initial scope is limited. Two services – deep brain stimulation and percutaneous image-guided lumbar decompression for spinal stenosis – originally scheduled for inclusion in 2026 have been delayed, representing less than 1% of total spending on WISeR services.