New CMS model goes after healthcare fraud through prior auths

CMS is doubling down on its promise to go after healthcare fraud, waste and abuse, introducing a new Innovation Center model that will use artificial intelligence and other technologies to ensure appropriate utilization of the Medicare program.

The announcement comes on the heels of dozens of major payers, including UnitedHealthcare, Humana, Cigna and CVS Health, voluntarily agreeing to improve their prior authorization processes through six actions. The actions include reducing the volume of prior authorizations required for services, standardizing electronic prior authorization requirements and increasing real-time decision-making.

Prior authorizations have notoriously burdened healthcare providers, with some physicians even reporting serious adverse events resulting from prior authorization delays.

Announced by CMS on Friday, the Wasteful and Inappropriate Service Reduction (WISeR) Model will test ways to expedite the prior authorization process in Traditional Medicare using "enhanced technologies," including AI.

The WISeR model will focus on existing prior authorization processes in Traditional Medicare for services especially vulnerable to healthcare fraud, waste and abuse, CMS said. Those services include skin and tissue substitutes, electrical nerve stimulator implants and knee arthroscopy for knee osteoarthritis.

Notably, CMS also said the WISeR model will not focus on inpatient-only services, emergency services and services that could lead to serious adverse events if delayed.

CMS plans to partner with technology companies to administer the WISeR Model in geographic areas assigned to each company. To participate in a certain area, the companies must have clinicians with "appropriate expertise" to perform medical reviews and validate coverage determinations, the federal agency explained.

However, the main focus of the WISeR Model will not be for technology to make prior authorization decisions, but to support the review process. Licensed clinicians make the final decisions in cases when a prior authorization is required, CMS stated.

Healthcare providers and suppliers for Traditional Medicare beneficiaries will be able to choose whether to use the prior authorization process tested by the WISeR Model or undergo a post-service or pre-payment medical review.

CMS plans to announce the companies participating in the model after the application period ends on July 25, 2025. The model is slated to launch on January 1, 2026, and last through 2031.

"CMS is committed to crushing fraud, waste, and abuse, and the WISeR Model will help root out waste in Original Medicare," CMS Administrator Mehmet Oz, M.D., said in the most recent announcement. "Combining the speed of technology and the experienced clinicians, this new model helps bring Medicare into the 21st century by testing a streamlined prior authorization process, while protecting Medicare beneficiaries from being given unnecessary and often costly procedures."

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.