Time to Wise Up: CMS’ WISeR Model Heralds AI-Driven Approach to Fighting Health Care Fraud | Lathrop GPM

On January 1, 2026, the Centers for Medicare and Medicaid Services (CMS) will deploy WISeR, a new enforcement initiative that relies on artificial intelligence to scrutinize Medicare claims.

The Wasteful and Inappropriate Service Reduction (WISeR) Model is the product of the agency’s efforts to leverage next-generation technology in its decades old effort to tackle health care fraud and abuse. According to CMS, WISeR is the “first model that incentivizes the use of cutting-edge tools to ensure that payment complies with Medicare documentation, coverage, payment and coding rules.”

Background

WISeR was created under the auspices of the Center for Medicare and Medicaid Innovation (Innovation Center). The Innovation Center was developed as part of the Affordable Care Act and has, up until now, largely been focused on designing and testing various types of value-based care delivery models. Notable Innovation Center programs include the Bundled Payments for Care Improvement Model, the ACO REACH program and the Making Care Primary Model. WISeR represents something that is completely different.

Citing statistics indicating Medicare spent as much as $5.8 billion in 2022 on “unnecessary” services, the Innovation Center has now obtained the assistance of private companies with expertise using artificial intelligence (AI) and machine learning (ML) to manage the prior authorization process. In fact, this is the first Innovation Center model in which technology companies are the only participants. Traditional Medicare has largely been immune from the pressures of prior authorization. The creation of WISeR may represent a shift in that policy.

Meeting WISeR’s Demands

Companies that desired to participate in WISeR were required to submit applications earlier this summer. The expectation is that those technology companies which have a demonstrated track record of success managing prior authorization through the use of enhanced technology on behalf of other payers would bring their skill sets to the Medicare program.

WISeR participants will apply their resources to certain selected services CMS has indicated have historically been prone to fraud and abuse and pose patient safety concerns if not delivered appropriately. The following items and services (and their accompanying national or local coverage determinations) are included in WISeR:

• Stimulator Services
  • Electrical Nerve Stimulators (NCD 160.7)
  • Sacral Nerve Stimulation for Urinary Incontinence (NCD 230.18)
  • Phrenic Nerve Stimulator (NCD 160.19)
  • Deep Brain Stimulation for Essential Tremor and Parkinson’s Disease (NCD 160.24)
  • Vagus Nerve Stimulation (NCD 160.18)
• Induced Lesions of Nerve Tracts (NCD 160.1)
• Epidural Steroid Injections for Pain Management (L39015, L39242, L36920)
• Percutaneous Vertebral Augmentation (PVA) for Vertebral Compression Fracture (VCF) (L34106, L38201, L35130)
• Cervical Fusion (L39741, L39762, L39793)\
• Arthroscopic Lavage and Arthroscopic Debridement for the Osteoarthritic Knee (NCD 150.9)
• Hypoglossal Nerve Stimulation for Obstructive Sleep Apnea (L38307, L38312, L38385)
• Incontinence Control Devices (NCD 230.10)
• Diagnosis and Treatment of Impotence (NCD 230.4)
• Percutaneous Image-Guided Lumbar Decompression for Lumbar Spinal Stenosis (NCD 150.13)
• Skin and Tissue Substitutes
  • Application of Bioengineered Skin Substitutes to Lower Extremity Chronic Non-Healing
  • Wounds (L35041)Wound Application of Cellular and/or Tissue Based Products (CTPs), Lower Extremities (L36690)

A list of CPT codes associated with all of the subject services is expected to be released by December 15, 2025. It is likely that the scope of services subject to WISeR in future years will continue to grow.

Other categories of services, on the other hand – including inpatient care, emergency services and services that would pose a substantial risk to patients if delayed – are carved out. In addition, WISeR only focuses on traditional Medicare and it does not expand or change applicable billing or coverage policy under that program. Medicare Advantage and other government programs like Medicaid are not included.

Providers and suppliers who deliver services subject to WISeR review will have two options:

1. They can elect to seek prior authorization, in which case AI/ML tools will be used to determine whether a claim is payable before services are rendered. Parties that choose to seek prior authorization will need to make their request directly to the WISeR Model participant or via their Medicare Administrative Contractor (MAC). The MAC will forward requests to the WISeR participant for analysis.
2. They can choose not to seek prior authorization and instead have their claims scrutinized before payment is made.

Regardless of which option is selected, any determinations by the technology to deny claims will “require the review of a human clinician.” WISeR participants are required to have clinicians with expertise conduct medical reviews to evaluate and affirm denial recommendations generated by the AI/ML technology.

WISeR participants are paid based on a percentage of the savings that are attributable to their efforts in reducing services. Participants will be audited, with the goal of ensuring that their determinations are consistent with Medicare coverage rules. Quality scores will be calculated, and it appears that inaccurate determinations could result in reduced payment to the WISeR participant. Among other things, the quality targets will evaluate participants based on the number of favorable appeals (of claims denials), volume of requests processed, timeliness of response and clarity of explanation. WISeR will run through December 31, 2031, and is being rolled out in the following states: Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington.

What Does WISeR Mean for Me?

WISeR is described by the Innovation Center as a “voluntary” model. While this is correct in the strict sense that it is voluntary for the technology companies that decide whether to participate, WISeR is not voluntary for providers and suppliers who render services subject to the model in the states where it applies. The biggest takeaway is heightened scrutiny of claims for specified services. The AI/ML-driven review will undoubtedly be questioning whether coding, coverage and payment criteria have been met and presumably challenging a substantial volume of claims.

Other points of note include the following:

• Although the Innovation Center has made clear that WISeR does not change Medicare’s coverage criteria, it may nevertheless be very challenging for providers and suppliers to understand how the AI has concluded that authorization for the sought-after services has been denied. Parties billing Medicare for the services at issue will likely want to take steps to understand how best to document medical necessity, evaluate whether gaps exist in their current documentation practices and consider how best to communicate medical necessity in a way that addresses applicable coverage criteria.

• Innovation Center models that prove successful tend to be applied more broadly in future years. CMS generally learns lessons from what has worked in its demonstration projects and modifies things in subsequent iterations to reflect the knowledge that it has gained. Given the significant cost and demographic pressures facing the Medicare program, it seems almost a certainty that AI and similar types of technology will increasingly be used to proactively identify conduct that could suggest fraud and abuse before claims are billed.

• Providers/suppliers that seek prior authorization (and receive a denial) can resubmit their requests. Denied prior authorization requests do not prevent the provider/supplier from delivering the service and submitting the claim. Parties billing Medicare for the services at issue in those geographic areas subject to WISeR will want to ensure personnel are trained on how to work through the prior authorization process. Certain MACs have already released instructions on how to request prior authorization. There will presumably be some hiccups in this process, so early attention may be a worthwhile endeavor.

• WISeR does not mean that providers, suppliers or beneficiaries lose or waive their rights to appeal denied claims. Submission of claims (provided after receiving denial of prior authorization) and subsequent payment denials by the MAC will be “initial payment determinations” that are subject to Medicare’s existing administrative appeals process.

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