CMS Launches AI-Driven Prior Authorization Pilot, Concern Mounts
New program draws bipartisan criticism and concern from patients and doctors.
Shrewd labs will keep an eye on the latest Centers for Medicare & Medicaid Services (CMS) prior authorization pilot that leans on artificial intelligence (AI) to determine treatment options for Medicare patients. While the Wasteful and Inappropriate Service Reduction Model pilot (WISeR) doesn’t directly mention lab tests, staying on the pulse of this growing trend will keep labs thinking ahead on how to minimize impact on bottom line, paperwork, and workflows when these pilots infiltrate lab testing.
An article from POLITICO reported that CMS will start a pilot version of the program as early as January 2026 in six states including Ohio, Texas, Oklahoma, Ariz., N.J., and Wash. Private AI companies will assist and focus on “services that have been vulnerable to fraud, waste and abuse in the past,” the article noted. The voluntary model is slated to span six years through December 31, 2031, according to the Centers for Disease Control and Prevention (CDC).
Among the types of procedures encumbered by the pilot program are knee arthroscopy for osteoarthritis, skin and tissue substitutions, and electrical nerve stimulator implants, CMS noted. All outpatient and emergency services would currently be excluded, they added, as well as “services that would pose a substantial risk to patients if substantially delayed.”
“All recommendations for non-payment will be determined by appropriately licensed clinicians who will apply standardized, transparent, and evidence-based procedures to their review,” CMS added.
The premise of the pilot is to eliminate wasteful spending, with CMS citing 25% of US healthcare spending falling in this category. “According to the Medicare Payment Advisory Commission Medicare spent up to $5.8 billion in 2022 on unnecessary or inappropriate services with little to no clinical benefit,” their website noted.
A Sour Reception
The pilot program is receiving a less-than-warm welcome from both parties—doctors, and patients alike, Politico noted. “It’s been referred to as the AI death panel. You get more money if you’re that AI tech company if you deny more claims. That is going to lead to people getting hurt,” Greg Landsman (D-Ohio) said during the committee hearing.
Landsman noted in the article from POLITICO that a bipartisan desire to put a halt to the program exists among growing concerns about patient harm coming from the program. Landsman “called for the program to be shut down until an independent review board could be erected to review the liability questions and ensure the AI prior authorization pilot doesn’t harm patients.”
“I’m concerned that this AI model will result in denials of lifesaving care and incentivize companies to restrict care,” Frank Pallone (D-N.J.) and House Energy and Commerce Committee ranking member said at the subcommittee meeting on the use of AI in health care held on Sept. 3.
“We have pretty good evidence that prior authorization as a process itself is fraught, adding that AI’s ability to improve the process for patients remains unproven,” Michelle Mello, Stanford University health law professor and witness at the hearing, said.
Looking Ahead
The involvement of AI in healthcare will only continue, and learning what aspects positively impact healthcare versus cause damage will continue to evolve.
Worth noting, there are already two unrelated lawsuits, against UnitedHealthcare and Cigna, that challenge the safety of AI use to deny patient care, POLITICO noted in the article.
Laboratory leaders should keep their eyes open and their ears to the ground on not only the pilot but all AI healthcare trends.
—Kristin Althea O’Connor
