Medicare, the federal health insurance program that covers more than 60 million Americans, is about to undergo a major experiment aimed at curbing wasteful spending. On August 28, 2025, the Trump administration announced the launch of the Wasteful and Inappropriate Service Reduction (WISeR) Model, a pilot program that will use artificial intelligence (AI) to review certain medical procedures before they are approved for payment. The initiative, set to begin in January 2026, will run for six years and initially target six states: Texas, Arizona, New Jersey, Ohio, Oklahoma, and Washington, according to reporting from The New York Times and a study published in Journal of the American Medical Association.
The stakes are high. A 2025 study in Journal of the American Medical Association found that as much as 25% of U.S. health care spending is wasted, with Medicare alone footing the bill for up to $5.8 billion in 2022 on unnecessary or inappropriate services. The WISeR Model aims to address these costly inefficiencies by requiring prior authorization for a select group of procedures identified as offering minimal clinical benefit or being prone to overuse.
Under the new program, the Centers for Medicare & Medicaid Services (CMS) will partner with technology companies to deploy AI tools that scan patient records and determine whether requested procedures meet evidence-based criteria. Specifically, the AI will focus on skin and tissue substitutes, electrical nerve stimulator implants, knee arthroscopy, devices for incontinence control, cervical fusion, certain steroid injections for pain management, select nerve stimulators, and treatments for impotence. The model will not apply to inpatient-only services, emergency services, or any procedure where delay could pose a significant risk to the patient.
CMS Administrator Dr. Mehmet Oz described the model as a necessary modernization of Medicare’s oversight. “CMS is committed to crushing fraud, waste, and abuse, and the WISeR Model will help root out waste in Original Medicare,” Dr. Oz said. “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.”
While the use of AI promises greater efficiency, the program is not without controversy. The government plans to contract with private companies whose compensation will be tied to the savings generated from denied claims—a structure that has drawn comparisons to practices in Medicare Advantage, the popular private alternative to traditional Medicare. According to The New York Times, similar algorithms in private insurance have been the subject of high-profile lawsuits, with critics alleging that the technology enabled companies to swiftly deny batches of claims, sometimes cutting off patients from needed care in rehabilitation facilities.
Frances L. Ayres, a 74-year-old retired accounting professor from Oklahoma, typifies the concerns of many Medicare beneficiaries. “I think it’s the back door into privatizing traditional Medicare,” she told The New York Times. Ayres, like millions of older adults, had chosen traditional Medicare to avoid the hassle of prior authorization commonly associated with Medicare Advantage plans. Now, she worries that the same burdensome process is creeping into the public program she relies on.
The WISeR Model has ignited opposition from several quarters. A group of House Democrats, including Representative Alexandria Ocasio-Cortez of New York, warned in a letter to government officials that giving for-profit companies a “veto” over care “opens the door to further erosion of our Medicare system.” Physician groups have also voiced concerns. The American Medical Association wrote that doctors view prior authorization “as one of the most burdensome and disruptive administrative requirements they face in providing quality care to patients.”
Experts in health policy are divided. Dr. Vinay Rathi, an Ohio surgeon and Medicare payment policy expert, cautioned, “It’s basically the same set of financial incentives that has created issues in Medicare Advantage and drawn so much scrutiny. It directly puts them at odds with the clinicians.” Neil Patil, a senior fellow at Georgetown and a former senior analyst at Medicare, echoed the sentiment: “It’s really surprising that we are taking the most unpopular part of Medicare Advantage and applying it to traditional Medicare.”
Despite these criticisms, CMS officials have sought to reassure the public. Abe Sutton, Director of the CMS Innovation Center, emphasized that the AI tools are only the first step in the review process. “Low-value services, such as those of focus in WISeR, offer patients minimal benefit and, in some cases, can result in physical harm and psychological stress,” Sutton said. “They also increase patient costs, while inflating health care spending.” He also stressed that final decisions will be made by licensed human clinicians, not machines, and that the government could penalize companies for inappropriate denials.
The government has also made it clear that the list of procedures subject to prior authorization could change as the program evolves. “This is what prior authorization should be,” Sutton explained. “The government may add or subtract to the list of treatments it has slated for review depending on what treatments it finds are being overused.”
Supporters of the WISeR Model point to clear instances of Medicare waste, such as billions spent on expensive skin substitutes of dubious value. They argue that a more rigorous review process could save the program billions over the next six years—funds that could be redirected to more effective care or to shore up Medicare’s long-term finances.
Yet, the program’s financial incentives for private AI contractors remain a flashpoint. David A. Lipschutz, co-director for the Center for Medicare Advocacy, described the contractors as “a whole new bounty hunter.” Critics worry that the profit motive could lead to excessive denials, leaving patients and their doctors to navigate appeals processes that many find daunting. While most patients who appeal are successful, the majority never do, meaning some may simply forgo needed care.
Congress has taken notice. Lawmakers from both parties have supported legislation to curb some of the more troublesome insurer practices, and the Biden administration had previously enacted modest reforms, including a pre-approval program that did not use AI. The Trump administration, meanwhile, has been eager to claim credit for pushing for greater oversight and reform of Medicare spending just days before unveiling the WISeR Model.
As the pilot rolls out, all eyes will be on the six participating states to see whether the new approach can strike the right balance between rooting out waste and preserving access to needed care. For now, patients, doctors, and policymakers alike are left to ponder the future: Will technology help Medicare spend smarter—or will it put new obstacles in the path of those who need care most?
With billions of dollars and the well-being of millions at stake, the WISeR Model represents a bold gamble on the promise and perils of AI in American health care.
