A new federal pilot program will use artificial intelligence to help decide on coverage for certain medical procedures for Medicare recipients in six states, including Washington. The program, which begins January 1, aims to reduce unnecessary medical services but has drawn criticism from doctors and lawmakers over the use of AI and its potential impact on patient care.
Key Takeaways
- A six-year Medicare pilot program called WISeR will use AI for prior authorization starting January 1.
- The program will operate in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington.
- It targets traditional Medicare and focuses on specific outpatient procedures deemed potentially wasteful.
- Critics express concerns about AI influencing medical decisions, potential privatization, and financial incentives to deny care.
New AI-Powered Review for Medicare Services
The U.S. Centers for Medicare and Medicaid Services (CMS) is launching a six-year pilot initiative known as the Wasteful and Inappropriate Services Reduction (WISeR) model. The program is scheduled to begin on January 1 and will affect traditional Medicare enrollees in six states.
The stated goal of the WISeR program is to identify and prevent fraud, waste, and abuse within the Medicare system. It will employ third-party companies that use artificial intelligence to review requests for specific outpatient procedures before they are performed. This process is commonly known as prior authorization.
Participation for physicians will be voluntary. Doctors can choose to submit prior authorization requests to receive upfront confirmation that a procedure will be covered. If they opt out, their claims will undergo a standard pre-payment review after the service has been provided.
Procedures Under Scrutiny
The program will initially focus on a select group of procedures that federal officials have identified as having high costs relative to their medical benefits. These services include:
- Skin and tissue substitutes
- Impotence treatments
- Deep brain stimulation
- Cervical fusion
- Knee arthroscopy for osteoarthritis
A spokesperson for CMS stated that the objective is to "help patients avoid unnecessary, inappropriate procedures across a narrow set of services." For example, spending on expensive skin substitutes has increased significantly in recent years, despite questions about their clinical effectiveness in some cases.
Background on Prior Authorization
Prior authorization is a common practice in private health insurance and Medicare Advantage plans, which are administered by private insurers. However, it has been used infrequently in traditional Medicare. This new pilot marks a significant shift by introducing this review process into the traditional government-run program.
Concerns from Medical Professionals and Lawmakers
The introduction of AI into medical decision-making has been met with significant resistance from patient advocates, physicians, and some elected officials. They raise concerns about transparency, patient autonomy, and the potential for profit-driven denials of care.
Dr. Matt Hollon of the Washington State Medical Association voiced his disapproval. "Patients expect their care to be guided by doctors, not insurance companies or automated systems," he said. The concern is that AI algorithms, which rely on aggregated data, may not account for the unique circumstances of individual patients.
Washington State Impact
Washington has approximately 1.6 million Medicare beneficiaries. About half are enrolled in traditional Medicare and will be subject to the new pilot program, while the other half are in Medicare Advantage plans that already use prior authorization.
Financial Incentives and Privatization Fears
A major point of contention is the program's payment structure. The third-party companies managing the AI reviews will be compensated with a share of the savings they generate for Medicare. Critics argue this creates a direct financial incentive to deny care, regardless of medical necessity.
"The use of AI is looking at this sort of aggregation of data, right? That doesn’t apply to individual patients and may not recognize an individual circumstance, and then they get paid to deny care. It’s antithetical to health care."
Some lawmakers see the program as a step toward privatizing Medicare. Senator Patty Murray of Washington described it as a "backdoor move by Republicans to privatize Medicare and let AI decide who deserves health care." She has pledged to oppose the initiative in the Senate.
CMS has responded to these concerns by stating that companies will face penalties for wrongful denials and slow decisions. Additionally, any denial recommended by the AI system must be reviewed by a human health care professional before it is finalized.
Unanswered Questions and a Push for Transparency
The rapid rollout of the WISeR model has left many stakeholders with unanswered questions. It remains unclear why the six specific states were chosen for the pilot. A CMS spokesperson offered a general explanation, stating the selection reflects the agency’s "goal of testing across diverse practice environments to ensure a reliable and valid model test."
In response to the lack of clarity, U.S. Representative Suzan DelBene of Washington led a group of over a dozen colleagues in sending a letter to the CMS administrator with a list of questions about the program's design and objectives. As of this reporting, a response has not been received.
"This should be a bipartisan issue," Rep. DelBene said. "There should be concern about making sure that people have access to care in all these states and understand exactly how the models work, why it’s set up this way, what their goals are."
Mixed Reactions to Potential Outcomes
While many are critical, some see potential benefits if the program operates as intended. Tim Smolen, a program manager at Washington’s Office of the Insurance Commissioner, suggested WISeR could be a "net positive."
"We’ll have a more definitive yes or no [if] Medicare is going to pay for it faster if the pilot works the way that it’s supposed to," Smolen noted. This could lead to "fewer surprises for providers and for beneficiaries" regarding unexpected medical bills.
Patient advocacy groups like AARP are monitoring the situation closely. An AARP spokesperson acknowledged the need to address fraud but emphasized that patient health must be the top priority. "The health care of older Americans must always come first, and nobody should be denied legitimate treatments they need," the spokesperson said.