After earlier reforms that sought to reduce the impact of prior authorization on providers and patients, CMS has created a demonstration model that will add prior authorization requirements for regular Medicare for a select group of regional providers.
CMS’ Centers for Medicare and Medicaid Innovation (CMMI) opened an application process for a “Wasteful and Inappropriate Service Reduction (WISeR)” demonstration model on June 27. The application is for companies that would perform the prior auth; the model will automatically apply to providers and suppliers in Medicare administrative contractor (MAC) jurisdictions JH (Oklahoma and Texas), JL (New Jersey), JF (Arizona and Washington), and J15 (Ohio) who submit claims on several services and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) picked by CMS.
These providers and suppliers “will have the opportunity to submit a request for prior authorization to either the MAC or the model participant, along with documentation to support Medicare coverage of a selected service included in the model as defined in the statute, regulation, NCD and/or LCD,” per a notice HHS
published in the Federal Register on July 1.
While submitting for prior authorization is voluntary under the model, providers are notified if the provider/supplier does not submit a request, and their claim “will be subject to prepayment medical review by model participants that may involve requests for documentation to support the medical necessity of the targeted item or service.”
CMS says that the purpose of the model is to “focus health care spending on services that will improve patient well-being” and “apply commercial payer prior authorization processes that may be faster, easier and more accurate” while “de-incentiviz[ing] and reduc[ing] use of medically unnecessary care.”
Model participants chosen by the agency to perform these authorization reviews “will be companies with expertise managing the prior authorization process for other payers using enhanced technology like AI,” a related fact sheet says.
The carrot for these participants will be a kind of shared savings bonus: “For each selected service,” the fact sheet says, “participants will receive a percentage of the reduction in savings that can be attributed to their reduction of wasteful or inappropriate care.”
The notice names 15 diagnoses, services and DMEPOS and their national coverage determinations or, where applicable, local coverage determinations. Among these are electrical nerve stimulators (NCD 160.7), cervical fusion (several LCDs), diagnosis and treatment of impotence (NCD 230.4), and skin and tissue substitutes (several LCDs).
“In general,” the notice says, “this model will require the same information and clinical documentation that is already required to support Medicare FFS payment but earlier in the process, namely, prior to the service being furnished.”
To educate affected providers and suppliers on the model, the notice says CMS will reach out via “open-door forums, frequently asked questions (FAQs) on our website, other website postings, and educational materials.”
A change in direction?
While Medicare Advantage (MA) is rife with prior authorization requirements, traditional Medicare currently requires it for some DMEPOS and selected medical services, including certain hospital outpatient department (OPD) services and repetitive, scheduled non-emergent ambulance transport (RSNAT), and services within other demonstrations models including home health and inpatient rehabilitation facility services.
Recent CMS efforts have sought reduce the negative impact of prior authorization, which has been long decried by providers and patients (
PBN 3/21/22).
For example, the Interoperability and Prior Authorization Final Rule published in January 2024 seeks to make PA less cumbersome in Medicare Advantage, Medicaid and other government plans (
PBN 1/29/24). It requires payers to provide timely and transparent explanations for prior authorization decisions via mandatory application programming interfaces (API).
The new model also seems contrary to the trend in several states to exempt many procedures from prior authorization under any insurance via “gold card” programs that reward providers who achieve a high success rate in claims acceptance (
PBN 8/14/23).
CMS does say that they are “exploring implementation” of gold carding, and that it will have an expedited review process for providers whose patients’ lives or health would be adversely affected by the resulting prior authorization delays.
But some observers, including Anders Gilberg, senior vice president, government affairs for the Medical Group Management Association (MGMA) in Washington, D.C., think the model is a step in the wrong direction.
“The announcement of this Part B model seems to contradict the administration's recent commitments to ease the burden of prior authorization,” Gilberg says. “We look forward to working with CMMI and the administration on efforts to reduce waste and ensure they do not come at the cost of greater administrative burdens and interference with clinical decision-making.”
As recently as June 23, portraying his and CMS administrator Mehmet Oz’s meeting with health insurance executives on ways “to streamline and improve the prior authorization processes,” HHS Secretary Robert F. Kennedy Jr. said that HHS was “actively working with industry to make it easier to get prior authorization for common services such as diagnostic imaging, physical therapy, and outpatient surgery.” Kennedy emphasized that the executives’ commitments, including “reduc[ing] the volume of medical services subject to prior authorization by January 1, 2026,” would be “voluntary.”
The traditional fee-for-service program will run from January 1, 2026, to December 31, 2031.
Resources
- CMMI, “WISeR (Wasteful and Inappropriate Service Reduction) Model,” June 27, 2025: www.cms.gov/priorities/innovation/innovation-models/wiser
- CMS, “Model Overview Factsheet: Wasteful and Inappropriate Service Reduction (WISeR) Model,” June 27, 2025: www.cms.gov/files/document/wiser-fact-sheet.pdf
- HHS/CMS, “Medicare Program; Implementation of Prior Authorization for Select Services for the Wasteful and Inappropriate Services Reduction (WISeR) Model,” notice, July 1, 2025: https://public-inspection.federalregister.gov/2025-12195.pdf
- KFF, “Medicare Advantage Insurers Made Nearly 50 Million Prior Authorization Determinations in 2023,” Jan. 28, 2025: www.kff.org/medicare/issue-brief/nearly-50-million-prior-authorization-requests-were-sent-to-medicare-advantage-insurers-in-2023/
- CMS, “Prior Authorization and Pre-Claim Review Initiatives,” Jan. 17, 2025: www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/prior-authorization-and-pre-claim-review-initiatives
- HHS, “HHS Secretary Kennedy, CMS Administrator Oz Secure Industry Pledge to Fix Broken Prior Authorization System,” June 23, 2025: www.cms.gov/newsroom/press-releases/hhs-secretary-kennedy-cms-administrator-oz-secure-industry-pledge-fix-broken-prior-authorization