Medicare’s Two-Tier Approach to Prior Authorization

This article examines CMS’s seemingly contradictory approach to prior authorization in Medicare. On one hand, CMS is tightening oversight of prior authorization in Medicare Advantage, responding to widespread concerns that insurers have used it to delay or deny care that beneficiaries are legally entitled to receive. Through new regulations and a voluntary agreement with major insurers, CMS aims to streamline electronic prior authorization, reduce the number of services requiring approval, ensure clinician review of denials, and move toward real-time decisions.

At the same time, CMS is expanding prior authorization within traditional Medicare through the new Wasteful and Inappropriate Service Reduction (WISeR) Model. This demonstration project will test technology-driven prior authorization, including AI, for select services considered vulnerable to fraud, waste, or overuse. While emergency and inpatient-only services are excluded, providers in six states must either submit prior authorization requests or face pre-payment claim reviews.

The WISeR model has drawn criticism from lawmakers and clinicians, who argue it introduces delays and burdens into a system that historically required minimal prior authorization. Concerns also center on potential conflicts of interest among vendors paid based on denied claims, limited communication with providers, and risks to vulnerable patients. Supporters counter that, if implemented carefully, prior authorization can control costs and improve care quality. The role of AI—and how it will be regulated—remains a key issue to watch.

Frieden, J. (2025, December 26). Medicare is of two minds on prior authorization — CMS is cracking down on it in Medicare Advantage while expanding its use in traditional Medicare. MedPage Today. https://www.medpagetoday.com/practicemanagement/reimbursement/119157