AI prior authorization pilot raises new concerns over Medicare care denials
CMS is testing AI-assisted reviews in six states as doctors, advocates and lawmakers warn the technology could speed up coverage denials.
By James Whitfield · Staff Writer
4 min read
The Trump administration is testing an AI-assisted prior authorization program in original Medicare, expanding a tool long associated with delays and denials in private Medicare plans. The project matters because prior authorization can determine whether patients get insurer approval for physician-recommended care before treatment begins.
Prior authorization is meant to limit unnecessary spending and steer patients away from costlier services when appropriate alternatives exist. But the American Medical Association says many physicians report that the process delays care, and a 2025 AMA survey found 61 percent of doctors worried AI would increase denials for treatments they considered necessary.
The AMA has called for insurers to explain coverage denials with detailed clinical reasoning and to provide more information about AI systems used in those decisions. Health policy analyst Camm Epstein told Undark by email that AI should make appropriate care easier to approve rather than make needed care easier to deny.
CMS tests WISeR in six states
The Centers for Medicare and Medicaid Services this year began the Wasteful and Inappropriate Service Reduction Model, known as WISeR. CMS says the model uses AI and other technologies, combined with clinical review, to reduce waste, fraud and unnecessary procedures in original Medicare.
According to CMS, the demonstration runs through December 2031 in six states. It applies to selected services the agency says may be prone to overuse, fraud or abuse, including skin and tissue substitutes, electrical nerve stimulator implants and knee arthroscopy for knee osteoarthritis.
CMS says WISeR is designed to support timely and appropriate Medicare payment. Critics see the program as an expansion of prior authorization into original Medicare, where the tool has been used far less often than in Medicare Advantage.
The HHS Office of Inspector General reported in 2022 that Medicare Advantage plans denied access to services in more than one in 10 reviewed cases even though beneficiaries appeared to meet coverage rules. KFF reported that Medicare Advantage plans overturned 81 percent of appealed prior authorization denials in 2024.
Denials remain a major patient complaint
KFF has described prior authorization as a leading health care burden for the public. Medicare Advantage now covers about 55 percent of Medicare-eligible older adults and disabled people, according to KFF, and insurers make millions of full or partial denials tied to prior authorization each year.
A Commonwealth Fund survey released in June found about one in five working-age adults with private insurance said they or a family member were denied coverage for doctor-recommended care in 2025. Among people who reported a prior authorization denial, 41 percent said their care was delayed, and more than a quarter said their health problem worsened.
Federal agencies and insurers have taken steps to reduce delays. A Biden administration rule issued in 2024 required many public-sector health plans to decide urgent prior authorization requests within 72 hours and non-urgent requests within seven calendar days; CMS said those timelines took effect for most affected plans on Jan. 1.
The Trump administration also announced an industry pledge aimed at easing prior authorization. Private insurers said they would standardize electronic requests by 2027 and reduce the number of services subject to prior authorization by 2026, including some common procedures such as colonoscopies and cataract surgeries.
Lawmakers and advocates question incentives
Vendors in the WISeR model can earn a share of what CMS calls averted expenditures, according to Reed Smith’s health policy analysis cited in reporting on the program. Critics argue that structure may reward rejected care requests.
Wendell Potter, a former Cigna executive and health insurance reform advocate, has covered political opposition to WISeR in HEALTH CARE un-covered. In the same publication, Center for Health & Democracy researcher Zena Wolf cited reporting by the Washington Post, KFF Health News and the Seattle Times suggesting the model has produced delays and denials in some cases in the six pilot states.
Several lawmakers have introduced resolutions and amendments that would block funding for WISeR, citing patient access concerns. At the same time, CMS Administrator Mehmet Oz has warned insurers to reduce prior authorization burdens or face federal regulation, telling the National News Desk: “If you don’t do it yourselves, then we’re going to do it for you.”
Insurers have said AI or algorithms are not used without clinician or practitioner review to deny prior authorization requests involving medical necessity or clinical considerations, according to an industry group survey. Jared Dashevsky, a physician and founder of Healthcare Huddle, wrote that AI could reduce administrative waste, but warned current systems risk becoming an automated race to deny and appeal faster.
This story draws on original reporting from Ars Technica.