Medicare Advantage plans now cover around 55% of the nearly 63 million eligible Medicare-age beneficiaries. Unfortunately, MA plans' use of AI to deny prior authorization requests has become so common as to no longer be news. A Senate investigation last year documented how the three largest insurers deployed algorithms to systematically increase denials for post-acute care, boosting profits while cutting off medically necessary treatment for vulnerable seniors. Class-action lawsuits allege error rates as high as 90%, with patients forced to pay out-of-pocket or abandon care entirely.

These reports are alarming. Even more alarming is that CMS just replicated the exact same incentive structure for certain procedures within Original Medicare.

The Wasteful and Inappropriate Service Reduction (WISeR) model launched January 5th across six states. CMS selected technology partners (one for each state) to manage AI-enabled prior authorization determinations for certain procedures, then created a financial structure that compensates technology partners based on how much they save Medicare by denying claims. Up to 20% of every dollar they prevent Medicare from spending goes directly to the companies processing prior authorization requests. The more they deny, the more they make.

If that sounds familiar, it's because the same playbook turned Medicare Advantage prior authorization into a profit center for insurers at the expense of patients and providers. And health systems are now caught in the middle. Again.

Follow the Money

Let's be explicit about how CMS structured compensation for WISeR technology partners.

They are paid based on "averted expenditures," a euphemism for denied claims. The American Hospital Association's October letter to CMS noted that tech partners will receive "10%–20% of the savings associated with care denials," creating what AHA called "a perverse incentive to deny care that otherwise may be appropriate, as vendors may increase their profits by denying care."

What does that look like in practice?

Consider epidural steroid injections. If a technology partner denies 1,000 requests in one state over one year, with average Medicare reimbursement of $1,500 per procedure, they've generated $1.5 million in "savings." At 20%, that's $300,000 in revenue to the tech partner -- for saying no.

Scale that across procedures for an entire state. If Cohere Health, the Texas technology partner, denies $50 million in WISeR claims over the six-year model period, they could earn up to $10 million for preventing Medicare from spending money.

This isn't how Medicare Administrative Contractors are compensated. MACs receive fixed fees for claims processing, regardless of whether claims are approved or denied. This isn't how most commercial prior authorization vendors structure pricing either - they typically charge per review, not per denial.

WISeR is different. It uniquely and deliberately ties technology partner revenue to how much they prevent Medicare from paying health systems.

We've Seen This Story Before

The Medicare Advantage precedent should concern anyone paying attention.

In late 2024, the U.S. Senate reviewed more than 280,000 documents from UnitedHealthcare, Humana, and CVS. Their report documented a systematic pattern: these companies denied prior authorization for post-acute care at rates far higher than other care, specifically targeting expensive services.

UnitedHealthcare's denial rate for post-acute care jumped from 10.9% in 2020 to 22.7% in 2022 as they implemented automated systems. CVS deployed "Post-Acute Analytics" using AI, initially projecting $10-15 million in savings over three years. They revised that projection to $77.3 million. Internal documents showed CVS "deprioritized" reducing prior authorization volume because the "loss of savings was too large."

Ongoing class-action lawsuits allege that UnitedHealthcare's algorithm systematically denied medically necessary care despite a 90% error rate, with the company continuing because only 0.2% of patients appeal. A STAT News investigation revealed employees were pressured to keep rehabilitation stays within 1% of algorithmic predictions, effectively overriding physicians' clinical judgment with financial targets.

CMS had all this information when they designed WISeR. The Senate report was public. The lawsuits were filed. The American Hospital Association explicitly warned against replicating Medicare Advantage's incentive problems. CMS proceeded anyway.

Why This Should Concern Your Health System

If your health system operates in Arizona, New Jersey, Ohio, Oklahoma, Texas, or Washington, this isn't an abstract policy debate. It's a direct threat to your revenue cycle, operations, and ability to deliver appropriate care.

Financial risk is immediate. Every WISeR claim denial means delayed or lost revenue. Appeals are time-consuming and resource-intensive. Unlike Medicare's retrospective audits, you're now facing prospective denials before delivering service, or retrospective denials through pre-payment review that suspend cash flow for 45+ days.

Administrative burden compounds. Your RCM teams already manage prior authorization for Medicare Advantage and commercial payers. Now add Original Medicare, with technology partners whose financial interests oppose yours. Documentation requirements become moving targets as algorithms learn new denial reasons. Staff burnout accelerates.

Clinical operations suffer. Most importantly, physicians will start to second-guess medically appropriate decisions knowing that algorithmic denial could force patients to pay out-of-pocket or abandon necessary care. Patients will delay procedures due to coverage uncertainty. Quality metrics decline when appropriate care is postponed.

The American Hospital Association requested that CMS delay WISeR by six months. CMS did not. Multiple healthcare associations raised concerns about insufficient guidance, unclear requirements, and burden on stretched staff.

You Need an Ally with Aligned Incentives

Here's the fundamental problem: WISeR technology partners succeed when they deny your claims. They've invested in building technology infrastructure to service WISeR claims. And when software companies invest in development, they build the infrastructure that suits their incentives.

Your success depends on getting claims approved quickly. These incentives aren't just misaligned. They're directly opposed.

You can't change WISeR's structure. You can't opt out if you're in one of the six states. But you can choose who you work with to navigate it.

At Vega Health, we built our prior authorization platform differently: our goal is to equip your RCM team with an intuitive, trustworthy platform that gathers all the relevant clinical information and populates templatized communications to increase the likelihood of claim approval. Our solution learns from denial patterns to optimize your submissions before review.

We'll identify a documentation gap before a CMS technology partner's algorithm denies the claim. When denial patterns emerge, our analytics will surface them so you fix systemic issues rather than fight individual denials reactively. If WISeR expands to more procedures or states, you won't rebuild workflows, because you'll have infrastructure that scales.

The contrast is stark: CMS technology partners use AI to maximize Medicare savings through denials. Vega Health uses AI to maximize approvals by ensuring documentation meets coverage criteria the first time.

Our platform can be leveraged for WISeR, Medicare Advantage, and commercial prior authorization through the same infrastructure. We work directly with your RCM teams to integrate with existing workflows. And critically, our business model depends on your success: more approvals, faster turnaround, less administrative burden.

We're not asking you to trust vendor promises. We're offering partnership where our incentives align with yours: getting care approved for your patients and revenue flowing to your organization.

Leveling the Playing Field

The WISeR incentive structure isn't changing. Health systems in six states can't opt out. And based on CMS's track record, expansion to more states and procedures is likely.

What you can control is whether you face this alone or with a partner whose success is tied to yours.

The technology partners processing WISeR requests have a direct financial interest in denying your claims. That's not speculation; it's how CMS structured their contracts. They'll use sophisticated AI to identify documentation gaps, predict which denials are least likely to be appealed, and maximize the "savings" that determine their compensation.

But you deserve AI that works for you.

The incentive structure that pits technology partners against health systems wasn't your choice. But you have options to navigate it with a partner, and can build capabilities that serve your organization regardless of which payment model CMS implements next.

The question isn't whether WISeR will create challenges for your health system. It already has. It's time to level the playing field.

Ready to enlist an ally in prior authorization? Contact Vega Health to learn more: info@vegahealth.com.