CMS to implement prior authorization model starting in 2026
The Centers for Medicare & Medicaid Services (CMS) recently announced the Wasteful and Inappropriate Services Reduction (WISeR) Model, which will establish technology-enabled prior authorization and pre-payment review processes for some Medicare services in 6 states beginning January 1, 2026.
The WISeR Model will apply to 17 categories of items and services (such as skin and tissue substitutes, nerve stimulators and stimulation, epidural steroid injections, cervical fusion, knee arthroscopy, and incontinence control devices) within MAC jurisdictions JL in New Jersey, J15 in Ohio, JH in Oklahoma and Texas, and JF in Arizona and Washington. CMS selected the services based on evidence of potential fraud waste and abuse, patient safety concerns, availability of National Coverage Determinations and Local Coverage Determinations, and cost saving opportunities.
Prior authorization and pre-payment review will be performed by technology companies (model participants) that leverage enhanced technologies and will be compensated based on a share of averted expenditures. Model participants will use a technology-assisted prior authorization process to help ensure that all relevant clinical and medical documentation requirements are met before services are provided and claims are submitted and to help navigate patients to alternatives when appropriate. CMS expects participants to have expertise providing recommendations on medical necessity using enhanced technology like AI and to have clinicians with expertise to conduct medical reviews. CMS has stated that all recommendations for non-payment will be determined by appropriately licensed clinicians who will apply standardized, transparent and evidence-based procedures.
Applications by technology companies to participate in the WISeR Model are due by July 25, 2025. The Request for Applications is available here.
Medicare providers and suppliers will have the opportunity to submit a request for prior authorization, along with related documentation, to either the MAC or the model participant. Submission of a prior authorization request would be voluntary, but if a request is not submitted the claim would be subject to pre-payment medical review. CMS is exploring the possibility of implementing a process to exempt providers and suppliers who achieve a prior authorization threshold of 90% during a periodic assessment.
This announcement of expanded use of technology (e.g., AI) for prior authorizations and pre-payment review seems to contrast with the trend of limitations on the use of AI for prior authorization and the recent pledge from payors to improve and reduce the burdens of prior authorization.
The WISeR Model will provide potential opportunities for companies that have the technology and expertise for prior authorization and pre-payment review (keeping in mid the July 25 application deadline). This program will also generate concerns from healthcare providers about administrative burdens and delays, as well as financial incentives to deny prior authorization and payment, particularly if and when similar processes extend to other services and geographic areas. Healthcare providers may wish to consider ways to update their policies and procedures to proactively address potential issues such as prior authorization, prepayment review and payor audits.
For more information on prior authorization or related issues please contact attorney Rick Hindmand or any other member of the McDonald Hopkins healthcare team.
