CMS launches 6-year model to curb wasteful Medicare spending with AI-driven reviews

Editor's Note

The Centers for Medicare & Medicaid Services (CMS) announced the launch of a new model using artificial intelligence (AI) to target unnecessary Medicare spending, the agency reported in an October 17 update. The voluntary model will run from January 1, 2026, through December 31, 2031, and aims to cut wasteful and inappropriate care while maintaining patient access to necessary services.

The fact sheet reports that up to 25% of US healthcare spending is waste, with Medicare paying an estimated $5.8 billion in 2022 for services that offered little or no clinical benefit. The WISeR model seeks to address this by using AI and machine learning tools to streamline medical reviews for items and services prone to fraud, waste, or abuse.

Model participants will be companies experienced in managing prior authorization for commercial payers and capable of applying advanced technology to Medicare reviews. These participants must employ licensed clinicians to validate determinations and will operate in assigned states. They will focus on specific services that present patient safety risks if misused, have clear coverage criteria, or show a history of improper billing. Examples include skin and tissue substitutes, electrical nerve stimulators, and knee arthroscopy for osteoarthritis.

Providers caring for Original Medicare beneficiaries in selected regions can choose to submit prior authorization requests through the model or undergo post-service reviews. Those who opt for prior authorization may submit directly to the WISeR participant or via their Medicare Administrative Contractor. Inpatient-only and emergency services are excluded from the model to prevent delays in urgent care.

CMS said the WISeR model does not alter Medicare coverage or payment policies. Beneficiaries retain the freedom to choose their providers, and payment rates for covered services will remain unchanged. The model does not apply to Medicare Advantage plans. Despite this, experts have voiced concerns over how additional documentation, delayed reimbursements, and prolonged authorizations could reduce efficiency and potentially affect staffing levels.

Participants’ payments will be tied to measurable reductions in unnecessary services. Performance will be evaluated across three domains: process quality, provider and beneficiary experience, and clinical outcomes. Metrics include timeliness, clarity of review decisions, and evidence of appropriate alternative care.