AI can reduce wasteful spending in Medicare — but WISeR isn't the answer

The pilot Wasteful and Inappropriate Service Reduction (WISeR) Model aims to reduce wasteful or fraudulent spending in traditional Medicare. The Center for Medicare and Medicaid Innovation has it slated for testing over five years, starting in 2026. Outside contractors will analyze Medicare data using artificial intelligence (AI) tools to flag potentially unnecessary care and, in those cases, require providers to obtain prior authorization (PA) by submitting additional clinical justification before treatment proceeds.

The WISeR program was conceived to address explosive growth in Medicare spending in certain outpatient procedures between 2022 and 2025, along with repeated investigations by the Department of Health and Human Services Office of Inspector General into questionable billing patterns. The Centers for Medicare & Medicaid Services (CMS) estimates that up to a quarter of health care spending may involve low-value or unnecessary care and is betting that using AI-assisted clinical review, combined with PA in selected treatment areas, can help bring that spending under control.

But outsourcing PA to contractors that profit from denying claims risks bringing Medicare Advantage’s worst practices into traditional Medicare. Rather than using AI to create new barriers to care, CMS should use it to analyze medical records, identify patterns of unnecessary spending, and target provider accountability where it is warranted.

Congress quickly raised similar concerns. In November 2025, the House introduced H.R. 5940 to prohibit the implementation of the WISeR model. While the legislation never advanced out of committee, its introduction reflected significant concerns about several aspects of the program.

Why prior authorization raises red flags

Chief among those concerns is WISeR’s introduction of PA into traditional Medicare. Historically, PA has been used in fewer than 1% of Medicare claims, and, partly as a result, satisfaction rates with traditional Medicare programs are high, with roughly 80% to 90% of beneficiaries reporting favorable impressions of their overall care and coverage.

On the other hand, PA has been used extensively in Medicare Advantage programs and has been widely criticized for delaying care, adding administrative burdens and issuing denials that are frequently overturned on appeal. Simply put, PA has developed a poor reputation in Medicare Advantage, raising concerns that introducing it into traditional Medicare could produce many of the same problems.

Learning from Medicare Advantage

A second issue is the use of financial incentives with outside contractors who manage the program. Contractors may receive 10% to 20% of savings from reduced spending, creating a potential conflict of interest. Experience suggests that when organizations are rewarded for reduced spending, they may be more likely to deny service. Moreover, evidence from Medicare Advantage shows that 75% to 82% of coverage denials are overturned on appeal. It is hard to understand why a similar incentive structure would be built into a supposedly innovative new model.

The country has yet to finish dealing with the murder of a major insurance company executive, in which denial of service reportedly played a role. The intense public attention surrounding that tragedy underscored how deeply denial-of-care decisions have eroded trust in the health insurance system. Building the same flaws that make Medicare Advantage problematic into traditional Medicare is an obvious mistake. Putting the use of PA in the hands of consultants who are financially incentivized to deny claims suggests that key elements of the WISeR program are out of step with the national experience with health care insurance.

A better way to reduce waste

Yet something must be done to rein in the burgeoning cost of medical care. What if, instead of relying on PAs, we used AI to analyze our incredibly data-rich medical records to identify the specific decisions that account for the bulk of excess costs and negative outcomes, and then used that same data to effect change in the system?

The key to prudent use of resources in health care is to make resource decision-makers accountable for expenditures and outcomes. Those two elements — accountability for expenditures and outcomes — are almost entirely missing from our health care system. Instead, the typical treatment path is filled with incentives for health care systems to pile on services — more tests, imaging, biopsies, and treatments than are necessary and appropriate for the patient at that point in the patient journey. Marty Makary, M.D., M.P.H., former commissioner of the Food and Drug Administration, provided a window into these incentives in his 2019 book, The Price We Pay.

Value of accountability

Drawing on his experience at Johns Hopkins, Makary describes his efforts to understand, and ultimately reduce, the drivers of overdiagnosis and overtreatment. He offers numerous descriptions of the circumstances that encouraged physicians and health care systems to push the limits of professional judgment in ways that increased costs and often imposed an unnecessary burden on patients.

Makary found that most physicians were making resource decisions and guiding patients to make choices consistent with current medical literature and ethics. Only a small minority were making decisions that were dubious for patients and expensive for the health care system. Those physicians may become outliers in cost or in outcomes, but because they don’t receive feedback that they are outliers and don’t need to reconcile their results against the norm, they often have no reason to question what they are doing. Like a small, unnoticed leak in a plumbing system, the few can do a lot of damage.

Truly understanding the cost of care

This does not mean doctors are culprits trying to waste resources or game the system. In some cases, physicians have difficulty saying no to a diagnostic request, even when they suspect it is unnecessary. It is often easier to mollify the patient than to make the case for not acting. From a distance, it may look like the right thing to do, but at the detail level, it is unnecessary. Some physicians are also out of touch with the financial costs of overdiagnosing or overtreating until they are brought to their attention. Makary found that when physicians were presented with data that effectively characterized the decision-making choices of their peers and contrasted that with their own personal decision-making, it was an eye-opening experience that prompted significant behavioral change. That is, once again, the value of accountability.

Using today’s medical records, it is entirely feasible for CMS, with input from practicing physicians, to develop data-driven, procedure-specific feedback on cost, outcomes and critical decision points that highlight outliers. As Makary found, that is often enough to change behavior. Where that is not enough, targeted interventions need to provide more coercive options.

Over the past 30-plus years, our health care system has struggled to lower costs and improve outcomes, all the while denying key decision makers in the system the feedback inherent in accountability for resource use and outcomes. Unless and until we change this system and begin to hold decision makers accountable for financial and clinical outcomes, we will continue to spend more than we need to and get less for it than we should. The WISeR pilot, as currently planned, appears to be a step in the wrong direction.

Michael Abrams, M.A., is cofounder and managing partner of Numerof & Associates, a leading strategy and implementation consultancy that provides customized strategy and operational solutions to organizations across the health care industry.