US AI Medicare Pilot Sparks Physician Backlash Over Care Denials

The Trump administration has initiated a pilot program in six states to deploy artificial intelligence for prior authorisation decisions within original Medicare. The Centers for Medicare and Medicaid Services (CMS) launched the Wasteful and Inappropriate Service Reduction Model (WISeR) to identify and reduce waste and fraud, specifically targeting services such as skin substitutes, knee arthroscopies, and nerve stimulator implants. The initiative, which runs through December 2031, combines machine learning with human clinical review to evaluate medical claims for potential overuse or abuse.

The rollout has encountered significant resistance from the medical community. A 2025 survey by the American Medical Association found that 61 per cent of physicians fear AI will exacerbate the denial of necessary treatments. Critics argue that while AI could theoretically expedite unambiguous approvals, the current implementation risks increasing wrongful denials and care delays. Health policy analyst Camm Epstein emphasised that AI should be utilised to facilitate appropriate care rather than to make necessary treatments harder to secure.

Investigations cited by researcher Zena Wolf suggest the model has already resulted in care delays and denials in the pilot states within its first few months of implementation. Furthermore, the financial structure of the program has drawn scrutiny, as vendors participating in WISeR receive a share of what CMS terms “averted expenditures.” This incentive model links vendor revenue directly to the rejection of care requests, raising concerns about profit motives influencing patient access to medically necessary services.

The expansion of AI-driven prior authorisation in original Medicare contrasts with previous regulatory efforts to streamline the process. The Biden administration issued a rule in 2024 requiring insurers to make urgent prior authorisation decisions within 72 hours and non-urgent decisions within seven days, a requirement that took effect for most public sector plans on 1 January 2026. Despite these timeline mandates, industry data indicates an 11 per cent decline in prior authorisation requests between June 2025 and April 2026, though it remains unclear if denial rates have correspondingly decreased.

CMS Administrator Mehmet Oz has warned private insurers that the federal government will impose stricter regulations if they do not voluntarily streamline their prior authorisation processes. While private insurers have pledged to standardise electronic requests by 2027 and reduce the volume of services subject to prior authorisation by 2026, the integration of AI into original Medicare marks a significant shift. Historically, prior authorisation has been rarely deployed in original Medicare compared to Medicare Advantage plans, which already issue millions of denials annually.