Medicare's AI Experiment Causes Concern Among Doctors and Lawmakers

Medicare, the government health insurance program for older Americans, is testing a new initiative that uses artificial intelligence to manage prior authorizations for certain medical services, sparking concerns among doctors and lawmakers over potential delays and denials of care.

Beginning in January, the Centers for Medicare & Medicaid Services (CMS) will implement the Wasteful and Inappropriate Services Reduction (WISeR) Model in six states Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. The program, scheduled to run until 2031, will allow private companies to review requests for selected treatments and receive payments for denying services deemed unnecessary.

The WISeR Model introduces the controversial prior authorization process, long used in private insurance, into traditional Medicare. Prior authorization requires physicians and patients to obtain approval from insurers before certain procedures or medications are provided. While Medicare Advantage plans already use prior authorization, traditional Medicare generally does not, leaving older patients unfamiliar with this barrier.

AI-driven prior authorization has faced criticism in Medicare Advantage and private insurance, with links to poorer health outcomes, regulatory scrutiny, and legal challenges. Efforts to limit unnecessary hurdles have included state legislation and federal commitments to simplify the process. Yet, the new WISeR program targets services CMS identifies as high-risk for misuse or low-value, such as knee arthroscopy, nerve stimulation treatments, skin substitutes, and incontinence devices. Companies will earn money based on the cost savings from denying such services.

Many physicians fear this system will create administrative burdens and hinder patient care. Jeb Shepard, policy director for the Washington State Medical Association, noted that prior authorization often causes delays, denials, and lengthy appeals that distract doctors from treating patients. Dr. Bindu Nayak, an endocrinologist in Wenatchee, Washington, echoed concerns that older Medicare recipients could face new barriers for care they previously accessed without prior authorization.

CMS maintains that final decisions will be made by licensed clinicians and that companies will be incentivized to make timely and accurate determinations. Abe Sutton, director of the CMS Innovation Center, emphasized that the program aims to reduce low-value services that provide little benefit and can increase patient costs.

Physicians nationwide report that prior authorizations have sometimes led to serious harm, including hospitalization or permanent damage. Investigations have found that a notable portion of denials in Medicare Advantage were for requests that met program criteria. While supporters of WISeR argue that cost reduction is necessary, critics stress that adding prior authorization to traditional Medicare may create significant delays and stress for patients.

Legislative pushback has emerged. Representatives from Ohio, Washington, and other states introduced a bill to repeal the WISeR Model, citing concerns that seniors will face additional red tape to access care. Physician groups and medical associations in affected states support the repeal or temporary halt, calling for more stakeholder input before full implementation.

The programs expansion adds administrative tasks particularly in specialties such as orthopedics, urology, and neurology. Physicians warn that patients may experience longer wait times and more denials. Dr. Jayesh Shah, president of the Texas Medical Association, described prior authorization as increasing hassle for doctors and delaying care, though some physicians appreciate pre-approval for financial protection.

CMS selected six private tech companies to run the pilot, some of which are backed by venture capital with ties to major insurers. Concerns have been raised that financial incentives could lead to denials motivated by profit. CMS has indicated that performance metrics, including physician satisfaction and processing speed, will factor into compensation for these companies.

Overall, the initiative has triggered a debate over balancing cost savings with patient access and the potential risks of integrating AI-driven prior authorization into traditional Medicare.

Author: Natalie Monroe