The Centers for Medicare & Medicaid Services (CMS) is set to launch a pilot program that will use artificial intelligence to aid in prior authorization decisions for certain medical procedures. This initiative, known as the Wasteful and Inappropriate Service Reduction (WISeR) model, will be tested in six states and aims to reduce unnecessary spending and prevent fraud and abuse within the Medicare system. While private insurance companies have utilized AI in coverage decisions for years, this marks a significant step for the public health insurance program, sparking a debate among healthcare professionals, patient advocates, and policymakers about the potential benefits and risks of integrating AI into Medicare.
The WISeR program will initially focus on a select group of medical services that have been identified as having a high potential for overuse or improper billing, such as skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy. Proponents of the program argue that AI can streamline the prior authorization process, leading to faster decisions and reduced administrative burdens for healthcare providers. However, critics express concerns that the use of algorithms could lead to an increase in care denials, potentially delaying or preventing patients from receiving necessary treatments. They also raise questions about the transparency and fairness of AI-driven decisions, emphasizing the need for robust oversight and a clear appeals process.
The WISeR Pilot Program
The WISeR pilot program is scheduled to begin in 2025 and will be implemented in six states: Arizona, Ohio, Oklahoma, New Jersey, Texas, and Washington. The program will utilize an AI algorithm to analyze prior authorization requests for specific medical services that have been flagged for potential fraud, waste, and abuse. While the AI will assist in the review process, CMS has stated that the final decision on whether to approve or deny a procedure will still be made by a human clinician. This “human-in-the-loop” approach is intended to ensure that individual patient needs and medical histories are taken into account, a key requirement outlined in a 2024 CMS rule regarding the use of AI in Medicare Advantage plans.
Targeted Medical Services
The initial focus of the WISeR program will be on a handful of medical services that have been identified as being particularly vulnerable to improper billing and overuse. These include:
- Skin and tissue substitutes
- Electrical nerve stimulator implants
- Knee arthroscopy for knee osteoarthritis
CMS has indicated that other procedures may be added to this list as the pilot program progresses. However, certain services will be exempt from the AI-powered prior authorization process, including those that are inpatient-only, emergency services, or those that would pose a significant risk to patients if delayed.
Potential Benefits and Efficiencies
Supporters of the WISeR program and the broader use of AI in healthcare administration point to several potential benefits. One of the primary advantages is the potential for increased efficiency in the prior authorization process. By automating parts of the review, AI algorithms could significantly reduce the time it takes to receive a decision, potentially from days or weeks to just minutes. This could lead to faster access to care for patients and a reduction in the administrative workload for healthcare providers, who often spend a significant amount of time on paperwork and phone calls related to prior authorization requests.
Another key benefit is the potential to reduce waste and fraud within the Medicare system. By analyzing large datasets and identifying patterns of unusual billing or high utilization, AI could help to flag potentially unnecessary or fraudulent claims before they are paid. This could result in significant cost savings for the Medicare program and, by extension, for taxpayers. The use of AI could also lead to more consistent and standardized decision-making, as algorithms are not subject to the same biases or variations in judgment as human reviewers.
Concerns and Criticisms
Despite the potential benefits, the use of AI in Medicare prior authorization has been met with skepticism and concern from various stakeholders, including physicians, patient advocates, and some lawmakers. A major concern is the potential for an increase in the number of care denials. Critics point to the practices of private insurance companies, where AI algorithms have been accused of being programmed to automatically deny high-cost treatments. A survey by the American Medical Association found that a majority of physicians believe that AI is already increasing prior authorization denials and causing harm to patients.
Transparency and Accountability
Another significant concern is the lack of transparency in how these AI algorithms work. The proprietary nature of many of these algorithms can make it difficult to understand how they arrive at their decisions, raising questions about fairness and accountability. If a patient is denied care, it may be difficult to determine the specific reasons for the denial and to effectively appeal the decision. Patient advocates and legal experts have called for greater regulation and oversight of the use of AI in healthcare, arguing that these tools should be subjected to the same rigorous testing and validation as new medical treatments.
The Future of AI in Medicare
The WISeR pilot program represents a significant step towards the integration of AI into the Medicare system. While the program is currently limited in scope, its results will likely have a major impact on the future of prior authorization and other aspects of healthcare administration. If the pilot is successful in reducing costs and improving efficiency without negatively impacting patient care, it could pave the way for a broader adoption of AI throughout the Medicare program. However, if the concerns of critics are realized and the program leads to an increase in care denials or other negative outcomes, it could lead to a reevaluation of the role of AI in healthcare decision-making.
The debate over the use of AI in Medicare is part of a larger conversation about the role of technology in healthcare. As AI and other advanced technologies become more prevalent, it will be crucial to ensure that they are used in a way that is safe, effective, and equitable. This will require a collaborative effort between policymakers, healthcare providers, technology companies, and patient advocates to develop clear guidelines and regulations for the use of AI in healthcare. The lessons learned from the WISeR pilot program will be invaluable in shaping the future of AI in Medicare and beyond.