Revolutionizing Medicare: The Impact of WISeR on Healthcare

The American healthcare system is gearing up for major changes. The Centers for Medicare & Medicaid Services (CMS) has launched the WISeR (Wasteful and Inappropriate Service Reduction) program—an ambitious experiment that could fundamentally change how we combat medical fraud.

Starting January 2026, six states will begin testing a system that uses artificial intelligence for prior authorization of medical procedures. The goal is straightforward: protect patients from unnecessary interventions and save taxpayers billions of dollars.

The Problem is Bigger Than You Think

Here’s a sobering fact: up to 25% of all healthcare spending in America is wasteful. That’s not just inefficient billing—we’re talking about procedures that patients don’t need, treatments that provide zero benefit, and interventions that can actually cause harm.

In 2022 alone, Medicare spent an estimated $5.8 billion on services with minimal benefit. Think about that for a moment. Nearly six billion dollars went to procedures that didn’t help patients get better.

The human cost goes beyond money. Unnecessary procedures mean anxiety for patients, physical discomfort, and potential complications from surgeries that should never have happened. It’s a system that’s broken at multiple levels.

Three Key Targets

WISeR focuses on three types of services that are particularly prone to abuse:

Skin and tissue substitutes – These expensive wound care products are often prescribed inappropriately, leading to massive Medicare bills without helping patients heal.

Electrical nerve stimulator implants – Sophisticated devices that can genuinely help some people but are sometimes implanted in patients who won’t benefit.

Knee arthroscopy for osteoarthritis – A surgical procedure that medical evidence increasingly shows provides little benefit for many arthritis patients, yet it’s still performed frequently.

These aren’t random choices. Each represents a significant drain on Medicare resources with questionable patient outcomes.

How the Technology Works

This isn’t about robots making medical decisions. The WISeR system uses AI to speed up the review process, but all final decisions denying coverage will be made by licensed doctors, not machines.

Here’s how it works: When a provider wants to perform one of these targeted procedures, they can either get prior authorization through the new system or proceed without it and face post-payment review. The incentive structure clearly favors getting approval first.

The AI analyzes clinical data and flags potential issues, but a human doctor makes the final call. It’s a hybrid approach that combines technological efficiency with medical expertise.

Six States, Six Years

The pilot program will run in Arizona, Ohio, Oklahoma, New Jersey, Texas, and Washington from January 2026 through December 2031. These states were chosen to represent different healthcare markets and patient populations.

This approach mirrors how Medicare has rolled out other oversight programs in the past. The Recovery Audit Contractor program started in just three states in 2005 before going nationwide. WISeR follows the same playbook—test, refine, then expand.

What Changes for Providers

For doctors and medical suppliers in these six states, the new system introduces a choice point. They can either:

Submit a prior authorization request through the WISeR system

Proceed without authorization and face potential post-payment review

The smart money is on getting approval first. Post-payment reviews can be messy, time-consuming, and expensive.

Importantly, CMS promises that high-performing providers might eventually qualify for exemptions, reducing their administrative burden. Providers with a 90% prior authorization approval rate could skip the review process entirely.

The Money Game

Companies operating the WISeR system will be paid based on performance. Their compensation ties directly to their ability to reduce inappropriate spending while maintaining care quality.

Key metrics include:

How many unnecessary procedures they prevent

How quickly they make decisions

Provider satisfaction with the process

Patient experience and outcomes

This creates market-driven incentives for innovation. Companies that build better systems get paid more. Those that don’t perform lose money.

Built-in Safeguards

The system includes important protections. It specifically excludes:

Emergency services

Inpatient hospital care

Any service where delays could pose serious health risks

These exclusions address legitimate concerns about prior authorization creating dangerous delays in urgent care situations.

Industry Reactions

Healthcare providers have mixed feelings about WISeR. Some welcome faster decision-making and reduced paperwork, especially the promise of exemptions for high performers. Others worry about expanded prior authorization requirements creating more bureaucratic hurdles.

Patient advocates raise questions about access to care, particularly for vulnerable populations. While CMS says coverage criteria won’t change, there are concerns that new requirements could create practical barriers to appropriate treatment.

Technology companies see opportunity. The performance-based model could drive significant innovation in healthcare AI and administrative automation.

The Bigger Picture

WISeR doesn’t exist in isolation. It’s part of a broader push by the current administration to combat healthcare waste and fraud. CMS Administrator Dr. Mehmet Oz has made “crushing fraud, waste, and abuse” a priority.

This focus comes at a critical time. Healthcare costs continue rising, and Medicare faces long-term financial pressures from an aging population. Eliminating wasteful spending becomes increasingly important for the program’s sustainability.

International Context

The U.S. isn’t alone in grappling with healthcare waste. Other countries are experimenting with similar approaches:

Canada has implemented technology-assisted prior authorization for certain expensive medications in some provinces, with mixed results. The UK’s National Health Service uses data analytics to identify inappropriate prescribing patterns.

These international experiences suggest both promise and challenges. Automated systems can identify patterns and streamline processes, but successful implementation requires careful attention to clinical judgment and patient needs.

What Success Looks Like

The ultimate measure of WISeR’s success won’t just be dollars saved. It will be whether the system can reduce unnecessary procedures while maintaining or improving access to appropriate care.

If it works, WISeR could become a blueprint for broader Medicare reforms and potentially influence private insurance practices. If it fails, it could set back efforts to use technology for healthcare oversight.

The Stakes

This is more than a Medicare experiment—it’s a test of whether artificial intelligence can improve healthcare administration without compromising patient care. The results will influence healthcare policy for years to come.

The next six years will be crucial. Success could demonstrate how technology can enhance rather than replace human judgment in critical healthcare decisions. Failure could create new barriers to care or undermine trust in Medicare’s commitment to beneficiaries.

Technical Challenges Ahead

Implementing WISeR successfully requires sophisticated technology infrastructure capable of processing large volumes of clinical data quickly and accurately. Key challenges include:

Integrating data from multiple sources

Developing AI algorithms that minimize false positives

Ensuring system interoperability with existing healthcare IT

Protecting patient privacy while enabling necessary data sharing

Building scalable systems that could potentially expand nationwide

Companies selected for WISeR must demonstrate not only technical capability but also clinical expertise and operational excellence.

Economic Implications

The economic impact extends beyond immediate Medicare savings. By reducing inappropriate utilization, WISeR could help slow healthcare cost growth more broadly.

Healthcare economists recognize that wasteful spending creates ripple effects throughout the healthcare economy. Unnecessary procedures lead to complications requiring additional treatment, inappropriate device use distorts market incentives, and inconsistent coverage criteria create pricing uncertainty.

If successful, WISeR could encourage broader adoption of similar approaches, potentially affecting how private insurers manage utilization and how providers approach clinical decision-making.

As WISeR launches in 2026, the healthcare industry will be watching closely. The combination of advanced technology, clinical expertise, and performance-based incentives represents a new approach to an old problem.

The model embodies both the promise and peril of applying AI to healthcare administration. Done well, it could show how technology can enhance human judgment in critical healthcare decisions. Done poorly, it could create new barriers to care.

The six-year timeline provides enough time to gather meaningful data and refine the approach. Early years will focus on implementation and initial data collection, while later years should show whether the system can deliver on its promises.

WISeR represents one of the most significant experiments in Medicare administration in recent years. With healthcare waste consuming up to 25% of all spending and Medicare facing long-term financial pressures, the need for effective solutions has never been greater.

The stakes are high, the technology is complex, and the implementation challenges are substantial. But if WISeR succeeds in meaningfully reducing waste while preserving access to appropriate care, it could reshape how America’s largest health insurance program operates.

The results will provide valuable lessons not only for Medicare but for the broader healthcare system about the potential and limitations of using artificial intelligence to improve healthcare efficiency and quality.

Sources

Centers for Medicare & Medicaid Services (CMS). “CMS Launches New Model to Target Wasteful, Inappropriate Services in Original Medicare.” CMS Newsroom, July 1, 2025.

Federal Register. “Medicare Program; Implementation of Prior Authorization for Select Services for the Wasteful and Inappropriate Services Reduction (WISeR) Model.” July 1, 2025.