The House Appropriations Committee voted to effectively defund the Wasteful and Inappropriate Service Reduction (WISeR) prior authorization pilot, a program that has faced bipartisan scrutiny since its rollout earlier this year. An amendment adopted by voice vote on June 9 would bar the Centers for Medicare & Medicaid Services (CMS) from using federal funds to implement WISeR or similar initiatives introducing prior authorization into traditional Medicare.

What Is the WISeR Model?

Launched in January 2026, WISeR represents a significant policy experiment as it applies prior authorization to fee-for-service Medicare (not Medicare Advantage). The six-year pilot operates in New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington, using private contractors with artificial intelligence tools to review services considered prone to fraud, waste, or low clinical value. Providers must seek prior authorization or face prepayment medical review, adding a new administrative step to reimbursement.

How the Model Works

Wasteful care accounts for up to 25% of U.S. healthcare spending, with an estimated $5.8 billion in Medicare spending in 2022 tied to low-value services. WISeR targets these services to reduce costs and improve patient safety.

CMS partners with private companies that apply AI and machine learning to assess coverage decisions for selected services.  The goal is for licensed clinicians to make all final coverage determinations for a defined set of items and services using standardized, transparent, and evidence-based criteria to ensure technology supports, rather than replaces, clinical judgment.

WISeR targets services with higher risk of inappropriate use, including:

• Skin and tissue substitutes
• Electrical nerve stimulator implants
• Knee arthroscopy for osteoarthritis

It excludes inpatient-only services, emergency care, and treatments where delays could pose significant risk to patients.

What This Means for Providers

Providers and suppliers in participating states must adapt to new workflows. They can submit prior authorization requests directly to the model participant or through their Medicare Administrative Contractor or proceed without prior authorization, in which case claims undergo prepayment review.

While WISeR does not alter Medicare coverage or payment policy, it introduces new review processes that may affect approval timing. CMS may eventually allow providers with strong compliance records to qualify for exemptions, reducing administrative burden and allowing greater focus on higher-risk services.

WISeR participants receive financial incentives based on their ability to reduce inappropriate utilization, lower spending, and improve review timeliness and efficiency for providers and suppliers.

What This Means for Patients

For Medicare beneficiaries, WISeR does not change coverage, benefits, or provider choice. Patients in traditional Medicare can still see any provider or supplier. The model aims to improve safety and reduce unnecessary care while streamlining prior authorization.

Federal Policy Outlook

WISeR reflects CMS’s effort to test technology-driven approaches to cost control without changing Medicare benefits. Key questions include whether it can reduce waste without creating new barriers to care. Early expectations suggest modest impact due to the narrow set of targeted services, especially as other CMS payment changes are already reducing spending.

At the same time, since WISeR provides financial incentives to participants based on reduced utilization, policymakers and stakeholders have raised concerns that these incentives may encourage increased denials.   For this reason, CMS requires WISeR participants to obtain a second opinion from a licensed clinician before issuing denials based on AI and that determinations align with Medicare coverage criteria. WISeR participants will be subject to audits and may face financial penalties or removal from the model for inappropriate denials. How effectively CMS enforces these safeguards and ensures consistency with clinical best practices will shape both stakeholder confidence and future policy direction.

While prior authorization remains one of the few available tools to manage utilization and spending, its expanded use in traditional Medicare comes at a time when it is facing increased bipartisan scrutiny due to concerns about delays, denials, and provider burden.

What Happens Next?

The appropriations bill must still pass both chambers of Congress, and similar provisions have failed in the past. Regardless of the outcome, the vote signals that efforts to curb waste through utilization controls, especially AI-enabled ones, will face significant scrutiny if they alter Medicare’s traditional access model.

For now, WISeR remains active in participating states, leaving providers to navigate its requirements as policymakers debate its future. Defunding the program without a replacement could create significant disruption.

Source: CMS, Wasteful and Inappropriate Service Reduction (WISeR) Model Provider and Supplier Operational Guide, Version 3.0 (last updated Dec. 23, 2025).

For additional resources, please see below links:

• To view the Model Overview fact sheet, visit: https://www.cms.gov/files/document/wiser-fact-sheet.pdf.
• For more information on the WISeR Model, visit: https://www.cms.gov/priorities/innovation/innovation-models/wiser .
• The WISeR Model can be viewed on the Federal Register at: https://www.federalregister.gov/.