The Centers for Medicare and Medicaid Services (“CMS”) recently announced the first six states participating in the Unnecessary and Inappropriate Services Reduction (“WISeR”) model that will begin January 1, 2026: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington.(1) As a primary objective, the model aims to refine prior authorization processes for traditional fee-for-service Medicare through the use of enhanced technologies, such as artificial intelligence (“AI”), to reduce performance and payment for services considered “low value.” Model participants will receive a percentage of the savings associated with “unnecessary and inappropriate care” avoided through their assessments.
Technology and AI in prior authorization
Perhaps most importantly, the model requires participants to use “enhanced” technologies to facilitate prior authorization processes for a specific set of items and services covered by traditional Medicare (e.g., skin and tissue substitutes, knee arthroscopy for knee osteoarthritis, etc.).(2) In particular, the model requires the use of approved technologies to conduct prior authorization reviews to assess whether services are medically necessary or otherwise clinically appropriate.(3) In accessing operational technologies, CMS indicated that it would engage private parties to develop and license the tools necessary to facilitate “technology” prior authorization processes.(4)
Payment changes
Participants in the model will receive payments based on their ability to reduce the use of unnecessary services and expenses.(5) Participants will be entitled to payment of a percentage of reduced spending or savings from the Medicare program for covered items/services, provided that the reduction/savings can be directly attributed to the prior authorization review process.(6) Discounts/savings will be calculated based on unpaid claims multiplied by the average payments of historical regional claims submitted for the applicable item/service during a fixed window.(7)
Participants will only receive payments for prior authorization denials that are not resubmitted and confirmed within one hundred and twenty (120) days of the initial authorization request.(8) CMS has clarified that payments for non-affirmation will be withheld for a period of up to one (1) year if the associated authorization is resubmitted, to ensure that the non-affirmation is maintained.(9) When a provider performs and bills for an unconfirmed item/service and successfully appeals a denial, CMS has indicated that the corresponding payment associated with that claim will be recovered from the model participant.(10) Additionally, CMS indicated that payments will be subject to annual adjustments based on quality measures.(11)
Providers and suppliers will continue to be paid for covered items and services based on the applicable Medicare payment methodology or fee schedule amounts for those services. But prior to payment, providers and suppliers will have the opportunity to submit a prior authorization request directly to the model participant or their Medicare Administrative Contractor (“MAC”) for the selected items and services (who will then forward the request to the model participant). Providers and suppliers who choose not to submit a prior authorization request will be required to complete a post-service and pre-payment review during which the model participant or MAC may request additional documentation related to the medical necessity of these items and services. Providers and suppliers may submit to the MAC any prior authorization request that is not confirmed by the model participant with detailed justification, and if the prior authorization request is still not confirmed and the provider or supplier chooses to move forward with the service without authorization, the provider or supplier may optionally appeal Medicare’s denial of payment for the service through the standard Medicare claims appeals process. Providers and suppliers with demonstrated compliance records may benefit from a “gold card” exemption from the WISeR review process in the future.
Communication and data sharing
Data collection will be essential to determine whether the model results in appreciable cost reductions and increased efficiency. To conduct such data collection, CMS indicated that it will develop data sharing policies to govern data sharing among model participants, MAC, providers, and suppliers, among others. When it comes to patient information, security concerns always remain. Aware of these concerns, participants in the model will:
- Maintain access to Federal Risk Management Program and authorization workflows;
- Adhere to the regulations of the Federal Law on Information Security Management;
- Comply with the CMS Information Systems Security and Privacy Policy;
- Implement CMS acceptable risk protection measures;
- Follow the directives of the CMS operating authority; And
- Execute commercial partnership agreements with MACs.(12)
CMS has indicated that providers and suppliers will have access to certain data from model participants and MACs.(13) Additionally, CMS will require participants to collect and report certain data measures to facilitate model evaluation, including with respect to prior authorization processes.(14)
Industry response
This initiative marks a significant change as most traditional Medicare benefits (i.e., not benefits offered by Medicare Advantage plans), have historically not required prior authorization. Some industry participants are expressing concerns about the expansion of prior authorization requirements, particularly regarding the use of AI in prior authorization decisions. On the one hand, there have been a number of class action lawsuits raising allegations that plans and payers in the Medicare Advantage space used AI to inappropriately delay or deny care through prior authorization processes. On the other hand, some advocates argue that the use of prior authorization, combined with the potential effectiveness of AI, could help reduce costs and avoid medically unnecessary care. CMS has signaled that it will take steps to monitor the performance of model participants to guard against abuse of the prior authorization process.
Looking to the future
The WISeR model is currently in the pilot phase and will be implemented only in the six (6) states mentioned above from January 1, 2026 and until December 31, 2031.(15) The model’s performance, both in terms of successes and failures, will likely inform CMS’s review of future models and refine existing models.
FOOTNOTES
(1) CMS launches new model to target unnecessary and inappropriate services under Original Medicare, https://www.cms.gov/newsroom/press-releases/cms-launches-new-model-target-wasteful-inappropriate-services-original-medicare (last visit November 23, 2025).
(2) Unnecessary and Unnecessary Services Reduction (WISeR) Model, Request for Applications, June 26, 2025 (“RFA”), p. 20, available at https://www.cms.gov/files/document/wiser-model-rfa.pdf (last visit November 23, 2025).
(3) Identifier. at 3.
(4) Identifier. on pp. 7 to 9.
(5) Identifier. on p. 23.
(6) Identifier.
(7) Identifier.
(8) Identifier.
(9) Identifier.
(10) Identifier.
(11) Identifier.
(12) Identifier. on p. 24.
(13) Identifier. on pp. 24 and 25.
(14) Identifier. on pp. 25.
(15) Identifier. on p. 3.