Washington state will participate in a federal pilot programme introducing prior authorization requirements for certain Medicare procedures, marking a significant shift from traditional Medicare’s historically open coverage approach.
The Centers for Medicare and Medicaid Services plans to implement the Wasteful and Inappropriate Service Reduction Model in six states beginning January, lasting six years. The programme will use artificial intelligence to evaluate approximately a dozen procedures deemed costly and potentially unnecessary.
Frances Ayres, a 74-year-old retired accounting professor from Oklahoma, exemplifies the concerns many traditional Medicare beneficiaries have about the change. She chose traditional Medicare specifically to avoid the coverage delays and denials associated with Medicare Advantage plans, which already use extensive prior authorization.
“I think it’s the back door into privatizing traditional Medicare,” Ayres said.
The pilot targets procedures including cervical fusion, certain steroid injections, incontinence devices, select nerve stimulators, and treatments for impotence. The government will hire private companies to operate AI systems that scan patient records for evidence supporting medical necessity before approving coverage.
Abe Sutton, director of the Center for Medicare and Medicaid Innovation, defended the approach as examining “practices that were particularly expensive or potentially harmful to patients.” He emphasised that emergency services and hospital stays would remain exempt from review.
However, the programme’s financial structure raises concerns among critics. Private contractors will receive payment based on savings generated from denying claims, creating direct financial incentives to reject coverage requests. This arrangement mirrors problematic aspects of Medicare Advantage that have drawn widespread criticism.
Dr. Vinay Rathi, an Ohio surgeon and Medicare payment expert, warned the experiment could recreate Medicare Advantage’s most contentious features. “It’s basically the same set of financial incentives that has created issues in Medicare Advantage and drawn so much scrutiny,” he said.
The programme addresses legitimate concerns about wasteful Medicare spending. Recent scrutiny of billions spent on questionable “skin substitutes” demonstrates that oversight gaps exist. However, critics worry that successful cost savings could justify expanding prior authorization to services with clearer medical value.
“You’re kind of left to wonder, well, where does this lead next?” Rathi said. “You could be running into a slippery slope.”
Opposition spans political lines and stakeholder groups. House Democrats, including Representative Alexandria Ocasio-Cortez, warned in July that giving for-profit companies a “veto” over care threatens Medicare’s integrity. The American Medical Association describes prior authorization as “one of the most burdensome and disruptive administrative requirements” physicians face.
Government officials insist human clinicians will make final decisions and that companies can be penalized for inappropriate denials. Yet the opacity surrounding contractor selection and decision-making algorithms concerns patient advocates.
David Lipschutz of the Center for Medicare Advocacy described the contractors as representing “a whole new bounty hunter” mentality in Medicare administration.
For Washington residents enrolled in traditional Medicare, the pilot represents a fundamental shift in how their healthcare access is managed. The state’s inclusion reflects geographic diversity in the pilot, which also encompasses Arizona, New Jersey, Ohio, Oklahoma, and Texas.
The programme’s timing coincides with broader Medicare policy debates about balancing cost control with access. Medicare Administrator Dr. Mehmet Oz has emphasised rooting out “fraud, waste and abuse,” whilst projecting several billion dollars in savings over six years.
Whether the pilot achieves its stated goals without compromising patient care will influence the future direction of Medicare policy. Success could accelerate adoption of prior authorization across traditional Medicare, whilst failures might reinforce arguments for maintaining the programme’s historically open coverage model.
The experiment ultimately tests whether AI-driven prior authorization can distinguish between genuinely wasteful spending and necessary medical care without creating the access barriers that have made Medicare Advantage controversial among many beneficiaries.
