Starting in January, Medicare will test its AI pilot program to determine whether patients will cover specific procedures.
The Centers for Medicare & Medicaid Services (CMS) can use AI to help make advance permit decisions via a new, wasteful, inappropriate service reduction (Wiser) model, but the final decision is made by employees.
Why is it important?
AI has had a major impact on the workforce, education, healthcare and more. While some people continue to hesitate about its use and its potential, AI tools are associated with increasing efficiency in many companies.
While traditional Medicare typically has fewer prior permit requirements than Medicare's advantages, the use of AI can speed up scope decisions and potentially lead to refusals to compensate, experts say.
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What do you know
The final decision to approve or reject coverage from Medicare comes down to employees, but critics from AI Test Pilots say companies that are running the review process will be incentivized to refuse compensation, as they will receive payments if they cut costs.
According to Marketwatch, Medicare Part B premium could increase from $185 in 2025 to $206.50 in 2026 as the Trump administration made reducing government fraud and waste a priority.
Some of the specific services included in AI-driven pre-certification decisions are skin and tissue alternatives, implants for electrical nerve stimulators, and knee arthroscopy for osteoarthritis of the knee.
In the past, traditional Medicare enrollees have fewer prior permission decisions. The average number required per enrollment per Medicare Advantage was 2 in 2023, compared with one review per 100 traditional Medicare beneficiaries.
“For older people, the impact can be huge, especially when immediate care is important,” said Kevin Thompson, CEO of 9I Capital Group. 9 Innings Podcast said Newsweek.
“The current administration focuses on removing what is called waste, fraud and abuse, and it focuses on pulling all levers to show that the program is working. Those that require prior prior permission can face multiple layers.
AI pilots will be running for the next six years and do not apply to inpatient-only services or procedures that involve high risk if delays occur.
At this time, the pilot program is limited to Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington.
What people are saying
CMS Administrator Dr. Mehmet Oz, Statement: “CMS is working on grinding fraud, waste and abuse, and a sensible model will help eradicate the original Medicare waste. Combining the speed of technology and experienced clinicians, this new model will help bring Medicare into the 21st century by testing a streamlined pre-certification process and protect Medicare beneficiaries from unnecessary and frequent reliance.”
Alex Bine, a financial literacy instructor at the University of Tennessee, Martin, Newsweek: “For many Americans, the term “Medicare advantage” is not planning as efficiently as originally promised, so the term “Medicare advantage” asked them what the real advantage was.
Thompson said Newsweek: “In theory, AI can speed up processing times, but mistakes are inevitable. The bigger concern is how financial incentives are structured. If contractors are rewarded for reducing coverage or rejecting coverage, that's exactly what happens. It's as simple as following money.
What will happen next
The use of AI can have a significant impact on the number of procedures Medicare beneficiaries are approved for compensation.
According to a 2024 Senate Committee report, AI tools are linked to a high rate of care refusal, 16 times higher than decisions made without technology.
“Medicare recipients want a simple process where as many barriers as possible are removed when they are eligible and receiving services,” BENE said. “AI can certainly be used to improve the process, but there is a justification for the red flag to be posted, as presented.”
