The federal government is moving to adopt artificial intelligence (AI) algorithms to make prior authorization decisions within the traditional Medicare system, a move previously favored primarily by private health insurers, according to NBC News.
The Trump administration is launching a pilot program next year, running through 2031, designed to test how much money an AI algorithm could save the government by denying “low-value” services to Medicare patients.
Denials from AI directed processes in private insurance have led to widespread criticism and in response AI ‘challengers’ have sprung up to allow patients to use the same technology to respond to denials.
Now the same issues could be coming to Medicare.
The program, named WISeR (Wasteful and Inappropriate Service Reduction), expands prior authorization—a process requiring approval before certain medical procedures or prescriptions—to Medicare patients in Arizona, Ohio, Oklahoma, New Jersey, Texas, and Washington, starting Jan. 1.
The initiative, which focuses initially on services like knee arthroscopy and skin and tissue substitutes, has generated significant political backlash and concern among policy experts. Historically, traditional Medicare, which covers seniors and some disabled people, has mostly “eschewed prior authorization”.
The timing of the announcement raised eyebrows, coming just days after the administration unveiled a voluntary effort urging private insurers to reduce their use of prior authorization, which CMS administrator Dr. Mehmet Oz acknowledged causes care to be “significantly delayed”. Oz told the media, “It erodes public trust in the health care system… It’s something that we can’t tolerate in this administration”.
Critics argue the administration is sending mixed messages. Rep. Suzan DelBene (D-WA) stated, administration officials are “talking out of both sides of their mouth… It’s hugely concerning”. Rep. Greg Murphy (R-NC), a urologist, also voiced sharp criticism of the practice: “Insurance companies have put it in their mantra that they will take patients’ money and then do their darnedest to deny giving it to the people who deliver care”.
CMS spokesperson Alexx Pons defended the expansion, saying both the pilot and the push for private reform “serve the same goal of protecting patients and Medicare dollars”. Pons also told KFF Health News that vendors involved in the WISeR program “are prohibited from compensation arrangements tied to denial rates” and that no Medicare request will be denied before being reviewed by a “qualified human clinician”. Pons added, “CMS remains committed to ensuring that automated tools support, not replace, clinically sound decision-making”.
However, experts remain skeptical, noting that “Shared savings arrangements mean that vendors financially benefit when less care is delivered,” creating a powerful incentive to deny necessary care.
Furthermore, a recent American Medical Association survey found that 61% of physicians believe AI is “increasing prior authorization denials, exacerbating avoidable patient harms and escalating unnecessary waste now and into the future”.
Rep. Murphy acknowledged that many physicians are concerned the WISeR pilot could deny doctor-recommended care, though he remains open to the concept, stating, “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”.