CMS Launches WISeR Model to Enhance AI-Driven Prior Authorization in Medicare

The Centers for Medicare and Medicaid Services (CMS) has introduced the Wasteful and Inappropriate Service Reduction (WISeR) Model, set to launch in six states—Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington—beginning January 1, 2026. This initiative aims to refine prior authorization procedures for traditional fee-for-service Medicare by integrating advanced technologies, including artificial intelligence (AI), to minimize unnecessary and low-value medical services. By leveraging AI and other approved technologies, participating entities can more efficiently conduct prior authorization reviews, ensuring clinical appropriateness and medical necessity for specific Medicare-covered services such as knee arthroscopy and skin substitutes. Participants in the WISeR Model will be financially incentivized based on their ability to reduce unnecessary Medicare spending. Payments to participants will be calculated as a share of savings from avoided unnecessary services, determined by comparing denied service requests against historical regional payment data. Importantly, payments depend on the upheld denial of prior authorization requests without subsequent affirmation on resubmission within 120 days. In cases where denials are overturned on appeal, CMS may claw back payments from participants. Moreover, participant compensation will be adjusted annually to reflect quality metric outcomes. The Model delineates a process for providers and suppliers wherein they may submit prior authorization requests directly to Model participants or via Medicare Administrative Contractors (MACs). A failure to submit for prior authorization will trigger post-service review procedures requiring documentation to justify medical necessity. To streamline this complexity, CMS may institute “gold card” exemptions for providers with strong compliance histories, exempting them from certain review requirements. Data collection and sharing will be pivotal to monitoring the Model’s efficacy. CMS intends to implement comprehensive data-sharing policies among participants, MACs, providers, and suppliers, ensuring secure handling of patient information. Participants must collect and report prior authorization metrics to facilitate ongoing evaluation and refinement of the Model. The expansion of prior authorization in traditional Medicare represents a significant policy shift, eliciting mixed industry reactions. Some stakeholders express concern about potential delays or denials arising from AI-driven prior authorization decisions, referencing past litigation within the Medicare Advantage space. Conversely, proponents argue that technology-enabled prior authorization could enhance cost control and clinical appropriateness. CMS has committed to monitoring participant performance closely to prevent procedural abuses. Currently a pilot program limited to the six participating states, the WISeR Model will operate through December 31, 2031. Its outcomes will provide critical insights for CMS to assess the feasibility and impact of broader prior authorization reforms within traditional Medicare, potentially influencing both future models and adjustments to existing payment and utilization management frameworks.