Medicare Pilot Introduces AI-Driven Prior Authorization in Six States

The Wasteful and Inappropriate Services Reduction (WISeR) Model is a new Medicare pilot program starting after January 1, 2026, in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. This initiative introduces an AI-driven prior authorization process within traditional Medicare, requiring private companies to approve or deny medical care requested by members using artificial intelligence tools. The payment model for these companies is tied to the amount of money saved by denying approvals, raising concerns about financial incentives potentially leading to increased care denials. The WISeR model may disproportionately affect rural populations in the participating states, as these communities generally have older and sicker demographics compared to urban and suburban counterparts. Prior authorization processes are known to generate administrative burdens for healthcare providers and delays for patients, often requiring extensive coordination and justification for treatments. This can ultimately create access barriers, impacting clinical decisions and potentially leading to suboptimal health outcomes. Artificial intelligence use in prior authorization has been implemented in some Medicare Advantage and private insurance plans but has faced significant criticism. The practice has been subject to federal investigations and multiple class-action lawsuits, with dozens of states passing legislation to regulate or limit AI use in medical care approvals. Concerns focus on AI-driven inaccuracies and negative patient impacts, driving legislative efforts to address these challenges. The WISeR pilot model has drawn opposition from medical practitioners and patient advocates within the affected states. The practical implications include increased administrative work for physicians, delayed treatment approvals, and a risk of forgoing necessary care due to anticipated denials. In response, congressional representatives from several states have introduced a bill aimed at repealing the WISeR model, though it remains under committee review. Set to operate from 2026 through 2031, the WISeR model underscores ongoing tensions in the intersection of healthcare delivery, AI technology, insurance incentives, and regulatory oversight. Its outcomes will likely influence future policies regarding AI applications in health insurance prior authorization and Medicare operations, especially concerning rural healthcare access and provider workload.