rewrite this title Medicare’s New Prior Approval Pilot, Explained

Some Medicare recipients are set to experience a new “prior authorization” measure as the Centers for Medicare & Medicaid Services (CMS) trials its much-discussed “Wasteful and Inappropriate Service Reduction (WISeR)” model.

The initiative, announced by the CMS in June, will require recipients of Original Medicare to receive prior approval before obtaining access to certain medical services. The pilot is only due to run in six states.

Medicare is health insurance for people aged 65 or older. Some younger people are eligible to receive the coverage if they have a disability, End-Stage Renal Disease (ESRD), or ALS. Almost 69 million Americans depend on the federally-funded program for their health insurance needs. As such, the impact of any changes to the program would likely be felt far and wide.

Several Democrat lawmakers in early August wrote a letter to CMS Administrator Mehmet Oz—widely known as Dr. Oz—to raise concerns that the proposed prior authorization practices would “likely limit beneficiaries’ access to care” and “create perverse incentives to put profit over patients.”

As interest mounts, here’s what to know about the Medicare pilot program.

What is the Medicare prior approval pilot?

Per the CMS, the WISeR model, announced on June 27, is intended to “test ways to provide an improved and expedited prior authorization process relative to Original Medicare’s existing processes” in order to “help patients and providers avoid unnecessary or inappropriate care” while also “safeguarding federal taxpayer dollars.”

According to the Medicare Payment Advisory Commission, Medicare spent up to $5.8 billion in 2022 on “unnecessary or inappropriate services with little to no clinical benefit.”

The WISeR model reportedly is aimed to combat this and will employ private companies to test if AI can handle the prior authorization process used to determine if a recipient of Original Medicare, a plan also known as Traditional Medicare, is eligible for funding for a health service. The model will specifically look at services the CMS considers to be “particularly vulnerable to fraud, waste, and abuse.”

“These items and services include, but are not limited to, skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy for knee osteoarthritis,” the CMS notice read.

CMS has confirmed that it will exclude a series of services such as “inpatient-only services, emergency services, and services that would pose a substantial risk to patients if substantially delayed” from the WISeR pilot. 

“CMS is committed to crushing fraud, waste, and abuse, and the WISeR Model will help root out waste in Original Medicare,” said Dr. Oz.

The model is not set to impact people enrolled in Medicare Advantage, a separate plan with extra benefits and coverage compared to the baseline Original Medicare scheme, that already has a prior authorization process.

Private companies involved in the program will be paid for their participation, based on their “ability to reduce unnecessary or non- covered services,” essentially how much money they can save in healthcare spending.

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When is the Medicare pilot program set to begin?

The WISeR model is set to be launched on Jan. 1, 2026 and will “run for six performance years” to measure its effectiveness, ending on Dec. 21, 2031.

What states are set to be impacted?

The WISeR pilot will be trialed in six states across the United States, according to the CMS.

Washington, New Jersey, Oklahoma, Ohio, Texas, and Arizona are set to be impacted.

Companies selected to take part in the program and conduct AI-driven prior authorization will be assigned different geographic regions to operate in.

What are the criticisms levied at the new Medicare model?

Democrat lawmakers wrote an open letter to Dr. Oz on Aug. 27, voicing their concern that the incoming prior approval practices could result in detrimental delays that negatively impact patients.

“WISeR will likely limit beneficiaries’ access to care, increase burden on our already overburdened health care work force, and create perverse incentives to put profit over patients,” said the 17 Democrat signatories, making reference to how prior authorization has impacted clients putting in claims under Medicare Advantage.

The lawmakers argued that “many patients choose Traditional Medicare because they know their care will be determined by their doctors and not by insurance companies.”

Signed by the likes of California Rep. Ami Bera and Illinois Rep. Bradley Scott Schneider, the letter highlighted concerns over profit incentives associated with prior authorization, a process which is also used by private insurance companies that typically hire outside parties to conduct such reviews.

Democrats criticized the Trump Administration in their address to Dr. Oz, highlighting how government officials had already publicly recognized the issues with prior authorization.

On June 23, Republican lawmakers alongside Health and Human Services Secretary Robert Kennedy Jr. pledged to “fix the broken prior authorization system.”

North Carolina Congressman Greg Murphy drew on his decades-long career as a physician, saying: “I witnessed the ridiculous and ever-increasing obstructions caused by insurance companies to delay or deny care to patients.”