How Could AI's New Role in Medicare Decisions Impact You?

If you're on Medicare, you may have heard that the Trump administration is turning to artificial intelligence (AI) programs to determine whether specific healthcare services will be covered for Medicare recipients in six states. Beginning Jan. 1 and running through 2031, those on Medicare in Arizona, Ohio, Oklahoma, New Jersey, Texas, and Washington will become part of a pilot program to learn if AI can save the government money.

Those on Medicare Advantage, offered by private insurance companies, may already have some experience with prior authorization since it's widely used in the private insurance industry. However, to this point, traditional Medicare, which covers adults 65 and older and some people with disabilities, has historically used prior authorization in a limited way, working only with contractors who don't earn extra money by denying services.

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A change of heart?

In June, the administration announced a deal with private insurers to reduce their use of prior authorization. At the time, Mehmet Oz, administrator of the Centers for Medicare & Medicaid, said that prior authorization significantly delays patient care and can't be tolerated in the Trump administration.

Less than two months later, the administration announced that it would extend prior authorization for Medicare recipients.

How it's expected to work

The program, WISeR -- short for Wasteful and Inappropriate Service Reduction -- will use an AI algorithm to make prior authorization decisions for some Medicare services. Per the Federal Register, these are the services the pilot program will closely examine:

• Electrical nerve stimulators
• Sacral nerve stimulation for urinary incontinence
• Phrenic nerve stimulator
• Deep brain stimulation for essential tremor and Parkinson's disease
• Vagus nerve stimulation
• Induced lesions of nerve tracts
• Epidural steroid injections for pain management, excluding facet joint injections
• Percutaneous vertebral augmentation (PVA) for vertebral compression fracture (VCF)
• Cervical fusion
• Arthroscopic lavage and arthroscopic debridement for the osteoarthritic knee
• Hypoglossal nerve stimulation for obstructive sleep apnea
• Incontinence control devices
• Percutaneous image-guided lumbar decompression for spinal stenosis
• Skin and tissue substitutes

Other procedures may be added to the list as patients wait to learn if they will need to withdraw money from their savings accounts to pay for formerly covered services.

Dueling opinions

According to the Centers for Medicare & Medicaid Services (CMS), the new program will "help protect American taxpayers by leveraging enhanced technologies, such as artificial intelligence (AI) and Machine Learning (ML), along with human clinical review, to ensure timely and appropriate Medicare payment for select items and services. The voluntary model will encourage care navigation, encouraging safe and evidence-supported best practices for treating people with Medicare."

On the other hand, Jennifer Brackeen, senior director of government affairs for the Washington State Hospital Association, has this to say: "Shared savings arrangements mean that vendors financially benefit when less care is delivered." Brackeen argues that shared savings arrangements create a powerful incentive for companies to deny medically necessary care.

Further, doctors already appear concerned about prior authorizations. In a 2024 American Medical Association survey, 93% of physicians reported that prior authorizations delay access to needed care, and 29% said their patients have suffered a serious event because treatment was stalled. Due to already spending nearly two full workdays each week dealing with prior authorization issues, 89% of those surveyed said prior authorization increases physician burnout.

If you live in one of the six states where the pilot program is implemented, you may notice treatment delays due to prior authorization or you may notice no difference at all. As with any pilot program, it's all about collecting real-world feedback to learn if it's effective enough to spread to other states.

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