CMS Pilot Uses AI for Medicare Prior Authorization, Faces Oversight Calls

A newly proposed pilot program seeks to halt prior authorization for select traditional fee-for-service Medicare services until an independent review board is established. This pilot, starting in January, involves six states including Ohio, New Jersey, Arizona, Oklahoma, Texas, and Washington, focusing on the Wasteful and Inappropriate Service Reduction model. The program partners with companies specializing in AI and machine learning to expedite and improve the prior authorization process, targeting services prone to fraud and waste such as skin and tissue substitutions, electrical nerve stimulator implants, and knee arthroscopy for osteoarthritis.

 These AI companies will be compensated based on the cost savings achieved by reducing payments for unnecessary or noncovered services. Congressional representatives from Ohio and New Jersey have expressed concerns about the model potentially incentivizing claim denials, which could negatively impact patient care.

They advocate for the establishment of an independent review board to address liability and patient safety issues associated with AI-driven prior authorization decisions. The initiative highlights ongoing efforts within CMS to leverage advanced technologies for enhancing healthcare compliance and reducing waste in Medicare, while balancing regulatory oversight with the need to protect patient outcomes.