September 25, 2025
KFF Health News: AI Will Soon Have a Say in Approving or Denying Medicare Treatments
In a significant shift, the Trump administration is set to implement a pilot program next year that will utilize artificial intelligence (AI) to determine the cost-effectiveness of denying care to Medicare patients. This initiative mirrors practices already seen in the private insurance sector.
The program aims to identify and eliminate wasteful, “low-value” services, effectively expanding the controversial prior authorization process. This requirement mandates that patients or their healthcare providers obtain insurance approval before undergoing certain procedures, tests, or prescriptions. The pilot will impact Medicare patients and their healthcare providers in states including Arizona, Ohio, Oklahoma, New Jersey, Texas, and Washington, starting January 1 and continuing through 2031.
This move has sparked concern among politicians and policy experts alike. Traditionally, Medicare has avoided the prior authorization process, which is prevalent among private insurers, particularly in the Medicare Advantage market. The announcement of this pilot program came shortly after the Trump administration revealed a voluntary initiative for private insurers to reform their own prior authorization practices, which have been criticized for causing significant delays in patient care.
Mehmet Oz, the administrator of the Centers for Medicare & Medicaid Services, emphasized the need for reform, stating that prior authorization can erode public trust in the healthcare system. However, critics like Dr. Vinay Rathi from Ohio State University argue that the administration is sending mixed signals by adopting cost-cutting measures from private insurance while simultaneously criticizing them.
Concerns have also been raised about the potential for delay-or-deny tactics, which can hinder access to necessary care and even lead to severe health consequences. Representative Greg Murphy, a Republican and practicing urologist, voiced frustration over insurance companies prioritizing profit over patient care.
Despite insurers claiming that prior authorization helps reduce fraud and unnecessary spending, public sentiment is largely against the practice. A recent poll indicated that nearly three-quarters of respondents viewed prior authorization as a significant issue in healthcare.
The pilot program, known as WISeR (Wasteful and Inappropriate Service Reduction), will test an AI algorithm’s effectiveness in making prior authorization decisions for specific Medicare services, including skin and tissue substitutes and knee arthroscopy. While the government asserts that these procedures are particularly susceptible to fraud and waste, the initiative has raised questions about its implementation and oversight.
CMS spokesperson Alexx Pons assured that no Medicare request would be denied without a review by a qualified human clinician, and vendors would not be compensated based on denial rates. However, critics warn that shared savings arrangements could create incentives to deny necessary care.
Experts have expressed skepticism about the plan’s design, noting that it relies on subjective measures and may not effectively assess its impact on patient care. Concerns about the potential for AI to exacerbate existing issues in prior authorization processes remain prevalent.
As the healthcare landscape evolves, the WISeR pilot program highlights the complexities and challenges of integrating AI into Medicare. While proponents argue that AI could streamline the prior authorization process, many remain cautious about its implications for patient care and the potential for increased denials of necessary treatments.
By Lauren Sausser and Darius Tahir
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
