Transforming Medicare: AI-Driven Prior Authorization Model Launches in 2026

Medicare Brings AI Into Prior Authorization, and Insurers Are Paying Attention

The Centers for Medicare and Medicaid Services is preparing to test a new way of managing prior authorization, and it is one that blends artificial intelligence with traditional clinical oversight. Beginning in 2026, CMS will roll out the Wasteful and Inappropriate Service Reduction Model, or WISeR, a program designed to reduce unnecessary spending while improving operational efficiency across Original Medicare.

For insurers, administrators, and healthcare finance leaders, WISeR offers a preview of how AI may increasingly shape utilization management in the years ahead.

“This model is about using modern tools to ensure Medicare pays for the right care, at the right time, for the right patients.”
CMS official statement, Centers for Medicare and Medicaid Services

Why CMS Is Rethinking Prior Authorization

The scale of prior authorization in Medicare Advantage has grown dramatically. In 2023 alone, Medicare Advantage plans processed nearly 50 million prior authorization determinations. By contrast, fee for service Medicare handled roughly 400,000. That imbalance has raised concerns about both overuse and under oversight in certain parts of the system.

WISeR is CMS’s attempt to narrow that gap without importing the full administrative burden associated with Medicare Advantage. The focus is on services that historically show higher rates of questionable utilization, including some pain management injections and nerve stimulation devices.

Rather than applying prior authorization broadly, the model concentrates on targeted services where CMS believes AI can flag patterns of waste or fraud more efficiently than traditional reviews.

How the WISeR Model Works

Under WISeR, CMS will rely on private contractors that specialize in data analytics and machine learning to conduct reviews. Firms such as Cohere Health and Innovaccer have been selected to help operationalize the program, bringing experience from claims management, underwriting, and clinical decision support.

These contractors will use AI models to assess whether proposed services meet existing Medicare coverage rules. Providers can either seek approval before delivering care or submit to a post service medical review. In both cases, payment eligibility is tied to compliance with established guidelines.

One of the most notable operational shifts is speed. CMS expects determinations to be completed within 72 hours, a timeline that is far shorter than many current industry benchmarks.

“Faster decisions benefit everyone, including patients, providers, and payers.”
Executive leadership, Innovaccer

States and Timeline

The model will launch in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. WISeR is scheduled to run from 2026 through 2031 and will apply to all providers and suppliers offering designated services to Original Medicare beneficiaries in those markets.

If successful, CMS has signaled that the model could expand both in scope and geography.

Incentives, Accountability, and Human Oversight

Financial incentives are built into the program for contractors that successfully identify non essential care. At the same time, penalties apply if denial rates are found to be inaccurate or inconsistent with Medicare rules. This structure is meant to discourage overly aggressive utilization management while still rewarding efficiency.

Despite the use of AI, CMS has emphasized that human clinicians remain central to the process. Any denial that results from an AI driven review must be evaluated by a qualified clinician, preserving medical judgment as a final checkpoint.

“Artificial intelligence supports decision making, but it does not replace clinical responsibility.”
CMS program guidance

Providers also retain access to existing Medicare appeals pathways, ensuring continuity with current beneficiary protections.

What This Means for the Insurance Industry

For insurers and managed care organizations, WISeR is less about Medicare alone and more about direction of travel. CMS is signaling that AI driven utilization management can coexist with regulatory rigor, provided transparency and accountability are built in.

Key implications include:

• AI is moving from analytics support into front line coverage determinations

• Speed and consistency are becoming regulatory expectations, not competitive differentiators

• Human clinical oversight remains non negotiable, even in advanced automation models

Looking Ahead

WISeR represents a careful but meaningful step toward modernizing Medicare oversight. For the insurance industry, it offers a real world test case for blending automation, compliance, and clinical review at scale.

If the model delivers on its promise, it may influence how payers across both public and private markets rethink prior authorization, risk management, and operational efficiency. The next few years will show whether AI can truly reduce friction without sacrificing trust in coverage decisions.