Medicare to Pilot AI-Powered Prior Authorization in Six States
The Centers for Medicare & Medicaid Services (CMS) has selected six technology companies to administer a new artificial intelligence (AI)-powered prior authorization program for Medicare, aiming to reduce wasteful spending within the program.
The pilot, officially named the Wasteful and Inappropriate Services Reduction (WISeR) model, will launch in January and continue through 2031 across New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington. This initiative comes as Medicare spent over a trillion dollars in 2024, prompting a search for more efficient ways to manage costs. Prior authorization is a process requiring approval from an insurance company before certain medical procedures or medications are covered – a frequent source of frustration for patients and providers.
CMS’s decision to utilize AI for prior authorizations occurs amid increasing scrutiny of similar practices by private insurers like UnitedHealthcare and Humana, which are currently facing lawsuits and congressional investigations regarding their use of AI in Medicare Advantage decisions. Concerns center around potential biases and inaccuracies in AI algorithms impacting patient care. Yesterday, a congressional representative from Washington state announced plans to introduce legislation to block the Department of Health and Human Services from implementing the WISeR program, citing concerns about patient access to care. You can learn more about prior authorization on the CMS website.
Officials stated the program will be closely monitored for effectiveness and potential unintended consequences. The implementation of AI in healthcare has the potential to streamline processes, but also raises important ethical and logistical questions, as explored by the Office of the National Coordinator for Health Information Technology.
CMS officials have indicated they will continue to evaluate the program’s performance and address any concerns raised by stakeholders throughout the seven-year pilot period.
