Medicare's AI-Powered Prior Authorization Pilot Faces Backlash

A new Medicare pilot program designed to prevent fraud through AI-powered prior authorization is creating significant operational problems for patients and healthcare providers across six states, according to reports from the field.

The Wasteful and Inappropriate Service Reduction Model, or WISeR, launched in January 2025 in Oklahoma, Arizona, New Jersey, Ohio, Texas, and Washington. The program requires preapproval for 13 medical services that federal officials identified as prone to fraud or misuse, including epidural injections, spinal fracture surgeries, and skin substitutes.

Bill Curry, a 65-year-old Oklahoma cattle rancher, experienced the change firsthand. After years of quarterly epidural treatments requiring a 2½-hour drive to Oklahoma City, he suddenly needed preapproval in February. The new requirement added an extra trip for the injection itself, plus a request for a third visit just to complete paperwork—something his clinic had never required before.

A rushed implementation timeline

Healthcare professionals across pilot states describe the rollout as chaotic. WISeR was announced in June 2024 and went live in mid-January—a timeline Todd Baker, recently departed CEO of the Ohio State Medical Association, characterized as "quicker than normal" for federal programs. Doctors "just sort of had to figure it out," said Jeb Shepard of the Washington State Medical Association.

Vendors acknowledged the compressed schedule. Jeremy Friese, CEO of Humata Health, which handles Oklahoma's program, called it an "aggressive rollout." Technology executives in other states were still adding features to their platforms through the spring.

Payment delays and suspected AI errors

The program's operational challenges extend beyond confusion. The University of Washington's medical system had nearly 100 patients waiting for epidural injections due to WISeR-related delays as of April, according to a report from Senator Maria Cantwell's office.

Payment problems are widespread. James Webb, a musculoskeletal radiologist in Tulsa, said claims that should be paid within 15 days are taking six to eight weeks. Phoenix pain management doctor Jerry Sobel reported not receiving Medicare payment for nine epidurals as of May, calling the experience "horrendous."

Doctors also suspect AI is generating errors in denial decisions. One Arizona physician received a denial citing the wrong spinal region. Webb documented four times that a patient lacked numbness, yet his application was denied based on the presence of numbness—a detail that would disqualify the procedure.

While vendors claim humans make final approval decisions, the AI component appears to be introducing inaccuracies. Friese said he hasn't heard about AI hallucinations, though multiple providers report what appear to be AI-generated mistakes.

Why it matters

This pilot represents Medicare's first significant deployment of AI-driven prior authorization, a practice the program had previously avoided but which is standard in private insurance. If deemed successful in reducing fraud-related costs, the model could expand to additional procedures and states—potentially introducing the same administrative friction that plagues commercial insurance into a program serving 65 million Americans. The early struggles raise questions about whether prior authorization truly saves money or simply shifts costs to patients and providers through delays, appeals, and administrative burden.

Abe Sutton, director of the Center for Medicare and Medicaid Innovation, said the program aims to reduce inappropriate care without delaying appropriate care, though he acknowledged the agency has budgeted for increased appeal volumes and associated costs.

These details were first reported by KFF Health News.