Medicare WISeR AI Pilot Rewards Care Denials as Seniors Wait
Medicare’s WISeR AI pilot delayed care, denied 53% of one vendor’s requests and rewards contractors with 25% of costs avoided through denials in six states.
Summary
Medicare’s Wasteful and Inappropriate Service Reduction, WISeR, pilot began in January 2026 in New Jersey, Ohio, Oklahoma, Texas, Arizona and Washington, and runs through 2031. It adds AI based prior authorization, previously absent from Medicare, for about 12 services including nerve stimulation, epidural steroid injections, cervical fusions, wound skin substitutes, and incontinence and impotence treatments. Electronic Frontier Foundation documents show a rushed launch: Innovaccer requested a delay, then temporarily auto approved requests; Zyter confused Medicare Parts A and B for months but now says both work; Virtix denied 3,233 of 6,096 requests, 53 percent, by March 30.
Decisions due within 72 hours took weeks or months, with one pending 83 days and one surgery delayed almost two months. Three Ohio patients awaiting kyphoplasty cried in pain while offices could not reach Innovaccer. CMS placed Virtix on a Corrective Action Plan for noncompliance, disclosed in June; Virtix says average authorization and prepayment decisions fell to 1.18 and 1.17 days, within three days, before the plan ended August 14.
CMS pays contractors 25 percent of regional benchmark costs for each denial, an incentive its actuary said encourages maximum denials. Aggregate Quality Scores of 84 to 60 percent retain 95 percent of that payment, and scores below 60 percent retain 90 percent; overturned appeals earn nothing, but only 11.5 percent of Medicaid Advantage denials are appealed, despite 80 percent succeeding. Deputy HHS nominee and CMS official Chris Klomp incorrectly told Sen. Patty Murray contractors do not profit from denials. The GAO found in May that officials bypassed proper procedures, clouding legality; Republicans last week blocked Rep. Suzan DelBene’s document demand. Murray vows to stop expansion to cancer care, air ambulances, advanced imaging, cardiac catheterization, pacemakers, ICDs, and genetic and molecular tests.
Positives
- Virtix says authorization decisions now average 1.18 days and prepayment reviews 1.17 days, within WISeR’s three day requirement.
- Virtix’s CMS Corrective Action Plan ended on August 14 after the company reduced its turnaround times.
- Innovaccer temporarily auto approved requests to prevent a backlog while completing and validating its authorization system.
- Zyter says its previously troubled system is now fully functional for Medicare Parts A and B.
- Eighty percent of appealed Medicaid Advantage denials are overturned, and WISeR contractors receive no payment for overturned denials.
Risks & concerns
- Virtix denied 3,233 of 6,096 requests by March 30, rejecting 53 percent and approving fewer requests than it denied.
- One authorization remained pending for 83 days, while another delay pushed surgery back almost two months.
- Three Ohio patients awaiting kyphoplasty cried in severe pain while their medical offices could not reach Innovaccer staff.
- CMS pays contractors 25 percent of benchmark costs avoided through denials, creating a direct financial incentive to reject care.
- Contractors scoring below 60 percent on quality still retain 90 percent of their share of costs avoided through denials.
- The Trump administration plans to extend WISeR to cancer care, air ambulances, advanced imaging, cardiac procedures, implanted devices and laboratory tests.