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Friday, July 11, 2025

CMMI Model to Test Prior Authorization in Traditional Medicare

 A new model to be tested by the CMS Innovation Center applies prior authorization processes to Traditional Medicare. The Wasteful and Inappropriate Service Reduction (WISeR) model will use AI to review items and services that CMS deems vulnerable to fraud, waste and abuse.

Examples of selected services include skin and tissue substitutes, electrical nerve stimulators and knee arthroscopy for knee osteoarthritis. 

WISeR will exclude inpatient-only services, emergency services, and services that would pose a substantial risk to patients if substantially delayed. Although the model will use AI, CMS said all recommendations for non-payment will be determined by appropriately licensed clinicians who will apply standardized, transparent, and evidence-based procedures to their review.

The model is voluntary and will run for six performance years from Jan. 1, 2026, to Dec. 31, 2031. CMS also said it would test the model with a narrow range of providers and services first before considering expanding it. 

blog post by Jacob Harper and Sydney Menack of the Morgan Lewis law firm highlights some of the challenges the model may raise for provider organizations. 

The authors note that the model “introduces a shared savings structure in which contractors are compensated, at least in part, based on the cost savings that result from avoided or denied services. While this payment structure is intended to promote alignment with CMS’s goals of cost containment and Medicare program integrity, it mirrors prior arrangements used in the Recovery Audit Contractor (RAC) and, to a lesser degree, Unified Program Integrity Contractor (UPIC) programs.”

These earlier models, the Morgan Lewis authors state, have faced sustained criticism from providers due to the aggressive denial behaviors and administrative burdens those denials create. “While its role will be to ensure compliance, the WISeR Model adds a layer of oversight that may complicate the billing process for many healthcare professionals and creates risk that contractors will act as modern-day bounty hunters.”

The blog’s authors also note that from an administrative standpoint, the WISeR Model will likely require modifications to revenue cycle workflows, new training protocols for administrative and clinical staff, and heightened vigilance in tracking and responding to emerging denial trends. “The financial implications could also be significant. Providers whose service mix includes high volumes of the targeted procedures are especially exposed to payment reductions,” they write. 

https://www.hcinnovationgroup.com/policy-value-based-care/alternative-payment-models/news/55302066/cmmi-model-to-test-prior-authorization-in-traditional-medicare

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