Center for Medicare and Medicaid Innovation Announces Prior Authorization Demonstration for Original Medicare

July 9, 2025

The Center for Medicare and Medicaid Innovation (CMMI) has developed a small-scale project for select providers and suppliers in six states. The demonstration project, called the Wasteful and Inappropriate Service Reduction (WISeR) Model, will accept applications from companies with experience using technology like artificial intelligence (AI) to facilitate prior authorization (PA). The goal of the project is to use technology to make more timely, accurate coverage determinations that reduce inappropriate spending by the Medicare program and its beneficiaries.

The project targets providers and suppliers in New Jersey, Texas, Oklahoma, Ohio, Arizona, and Washington that provide 17 services (including services that CMS says are particularly vulnerable to fraud, waste and abuse):

Stimulator Services
o Electrical Nerve Stimulators (NCD 160.7)
o Sacral Nerve Stimulation for Urinary Incontinence (NCD 230.18)
o Phrenic Nerve Stimulator (NCD 160.19)
o Deep Brain Stimulation for Essential Tremor and Parkinson’s Disease (NCD 160.24)
o 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) (excluding services included in existing HOPD prior authorization program)
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
o Application of Bioengineered Skin Substitutes to Lower Extremity Chronic Non-Healing Wounds (L35041)
o Wound Application of Cellular and/or Tissue Based Products (CTPs), Lower Extremities (L36690)

CMMI is currently accepting applications from companies through July 25, 2025. The demonstration will begin January 1, 2026 and will roll out in two phases over six years, concluding in 2031.

Why ASHA Is Concerned

While many private insurers—including Medicare Advantage plans—have used PA with and without the use of AI, this is the first widescale test of PA using AI in Original Medicare (also known as traditional or fee-for-service Medicare). And though the initial phase of this demonstration will likely have limited impact on audiologists and speech-language pathologists (SLPs), the announcement of this demonstration raises significant concerns. ASHA members have reported significant challenges with PA, both with and without the use of AI, in recent years. Numerous federal government reports have also raised questions as to the efficacy of PA.

ASHA recently communicated concerns to the Centers for Medicare & Medicaid Services (CMS) about PA being used to inappropriately delay or deny care to Medicare Advantage beneficiaries. See ASHA’s comments here and here on several proposed rules that were designed to place guardrails on such utilization management techniques. ASHA has also historically supported the Improving Seniors’ Timely Access to Care Act, which was recently reintroduced in Congress. The act seeks to reduce bureaucratic delays and improve efficiency of care delivery by establishing electronic prior authorization, increasing transparency, and clarifying timeframes for decisions.

We remain committed to monitoring the implementation and evolution of the WISeR Model.

How the WISeR Model Will Work

Companies that are selected for participation will be required to report metrics that may include, but are not limited to:

The number of affirmations (PA approvals)
The number of nonaffirmations (PA denials)
Amount of time taken to reach a decision
The number of resubmissions requesting a re-review to reverse the initial determination
Instances where the model participant reverses an initial nonaffirmation after re-evaluating the prior authorization request and determining that the initial decision should have been affirmed.

Model participants would be paid based on a share of money that was not paid out for services determined to be medically unnecessary. All PA denials would be subject to human review and must comply with local and national coverage determinations.

PA Process for Providers and Suppliers Subject to the Demonstration

If a provider or supplier is in one of the six demonstration states and is providing one or more of the items or services subject to the demonstration, they will have the option of submitting a PA directly to the model participant or to the Medicare Administrative Contractor (MAC) who will then transmit it to the model participant. If the provider or supplier elects not to undergo PA, then once the claim is submitted it will be subject to prepayment review. The financial risk for a service that has already been provided and is subjected to prepayment review makes PA the less risky of the two options.

A provider/supplier would be exempt from PA (sometimes referred to as “gold carding”) if they achieve a PA provisional affirmation threshold of 90% during a periodic assessment. A provisional affirmation is a preliminary finding that a future claim submitted to Original Medicare for the service likely meets Original Medicare's coverage, coding, and payment requirements. Claims for which there is an associated provisional affirmation decision will be paid in full, so long as all of the applicable Medicare coverage and clinical documentation requirements are met, and the claim was billed and submitted correctly.

Many payers who use PA note that claims could be denied on a post-payment basis if review of the documentation demonstrates a lack of compliance with payment and/or coverage rules. CMMI does not address the prospect of post-payment audit and denial despite a PA affirmation decision.

If a PA request is nonaffirmed and the item or service has yet to be provided or billed, the provider or supplier will have unlimited opportunities to resubmit the request. When resubmitting the request to the model participant or MAC, the provider or supplier will have the opportunity to request a peer-to-peer review to inform the new determination. A nonaffirmed PA decision does not prevent the provider/supplier from furnishing the item or service and submitting a claim. Submission of a claim with a nonaffirmed PA decision and subsequent denial by the MAC would constitute an initial payment determination, which would be subject to administrative appeals.