The Trump Administration has announced a significant change to Traditional Medicare that will require patients to get advance approval for many medical services—a process known as prior authorization. Beginning in 2026, the government will contract with private firms that employ artificial intelligence to review whether treatments actually are needed before Medicare pays for them.
The Wasteful and Inappropriate Service Reduction (WISeR) Model is the name the new program goes by, and it will operate through 2031 with the goal of decreasing wasteful medical expenditures. Taxpayers paid $5.8 billion in 2022 for low-value care, treatments that have minimal amounts of clinical benefit or where the drawbacks are greater than the advantages, the Centers for Medicare and Medicaid Services stated.
Trump Administration to Implement AI-Powered Prior Authorization for Medicare
Classic Medicare now requires prior authorization for only a limited number of services. But WISeR will dramatically expand these requirements, bringing a system that’s already common in Medicare Advantage plans and private insurance to the broader Medicare program.
Under the new model, CMS will contract with companies that specialize in medical reviews and use AI technology to help make decisions. These companies will receive a percentage of the money saved from denied treatments as payment, essentially rewarding them for saying “no” to medical care.
While AI will help screen requests, human clinicians will still make the final decisions about whether treatments are medically necessary. The companies chosen for these contracts will need experience with prior authorization systems, particularly those used in Medicare Advantage plans.
The expansion raises concerns based on how prior authorization already works in other parts of the healthcare system. Beginning in 2026, the government will contract with private firms that employ artificial intelligence to review whether treatments actually are needed before Medicare pays for them.
The Wasteful and Inappropriate Service Reduction (WISeR) Model is the name the new program goes by, and it will operate through 2031 with the goal of decreasing wasteful medical expenditures. Taxpayers paid $5.8 billion in 2022 for low-value care treatments that have minimal amounts of clinical benefit or where the drawbacks are greater than the advantages, the Centers for Medicare and Medicaid Services stated.
Medicare’s AI-Driven Prior Authorization: Cost Savings or Care Restrictions?
Classic Medicare now requires prior authorization for only a limited number of services. Adding prior authorization requirements will likely increase these administrative costs for both providers and taxpayers.
The reliance on AI for healthcare decisions raises additional red flags. A recent Senate investigation found that major insurance companies like United Healthcare, Humana, and CVS used AI systems specifically designed to deny more care, particularly for post-acute treatments. Internal documents showed these companies viewed reducing approvals as a way to improve their financial performance.
The WISeR model creates similar incentives by paying contracted companies based on how much money they save through denials. Critics argue this creates a conflict of interest where companies profit more by denying care rather than ensuring patients get appropriate treatment.
While addressing $5.8 billion in wasteful spending is important, critics point out that the government is ignoring much larger sources of waste. Medicare Advantage overpayments are estimated to cost taxpayers $84 billion annually, more than 14 times the amount targeted by the new prior authorization system.
The Trump Administration’s approach focuses on restricting patient care rather than addressing these larger systemic issues, raising questions about whether the cure might be worse than the disease.
