Medicare's AI Prior Authorization Pilot Hits Payment Snags

The Centers for Medicare & Medicaid Services is learning that automating medical approvals is only half the battle. The agency's WISeR Model—short for Wasteful and Inappropriate Service Reduction Model—launched in January to test AI-assisted prior authorization in traditional Medicare for the first time. While the technology is processing requests efficiently, backend payment systems are creating unexpected friction for physicians and patients.

Approval rates climb as physicians adapt

In Texas, third-party vendor Cohere Health approves roughly 62% of prior authorization requests on first submission, a figure that rises to 84% after physician review. Most approved requests receive same-day responses, according to Brian Covino, Cohere Health's chief medical officer. The program requires advance approval for a targeted set of procedures across Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington—states where traditional Medicare previously operated without prior authorization requirements.

The approval rates trail Medicare Advantage plans, which approved more than 92% of requests nationwide in 2024, according to KFF. Abe Sutton, director of the CMS Innovation Center, said the gap reflects the program's early stage and expects rates to improve as physicians become familiar with documentation requirements.

Technical failures, not AI decisions, cause delays

The most significant bottlenecks stem from infrastructure problems rather than the AI review process itself. In Ohio, physicians reported that the Innovaccer portal remained nonfunctional for weeks, pushing approval timelines beyond the program's three-day target for non-urgent care.

Arizona encountered a different problem: a billing mismatch between authorization and payment systems. Physicians who received authorization from vendor Zyter were subsequently denied payment because Medicare requires a unique tracking number that often isn't assigned until days after authorization is granted. The disconnect has created cash flow problems for practices that completed authorized procedures but cannot bill for them.

One Oklahoma patient made two 10-hour round trips for a spinal epidural that previously required no advance approval, after the procedure was flagged for review under the new program.

Gold card exemption launches in July

Starting in July, CMS will introduce a gold card exemption allowing physicians whose services are authorized at least 90% of the time to skip the pre-submission process entirely. The move aims to reduce administrative burden for high-performing providers while maintaining oversight where utilization patterns raise concerns.

All AI decisions require sign-off from a licensed clinician before any request can be formally denied. CMS spokesperson Chris Krepich said poor vendor performance will trigger corrective action. The program runs through 2031 and is expected to cover approximately 207,500 beneficiaries in its first year.

The Center for Medicare Advocacy raised concerns in March about vendor payment structures that tie compensation partly to savings from blocking services. CMS said vendor payments are also adjusted for accuracy and quality metrics.

Why it matters

The WISeR pilot reveals a common pattern in healthcare AI deployment: the algorithm performs as designed, but integration with legacy payment and administrative systems creates unexpected operational failures. For the 207,500 Medicare beneficiaries in the pilot states, the gap between authorization and payment isn't academic—it determines whether their physicians can afford to treat them. The technical issues also suggest that scaling AI-assisted prior authorization across Medicare's 65 million beneficiaries will require infrastructure upgrades beyond the AI models themselves.

These details were first reported by PYMNTS, citing Washington Post Intelligence reporting and other sources.