Image by Gerd Altmann from PixabayWhen the U.S. Centers for Medicare & Medicaid Services (CMS) announced its new Wasteful and Inappropriate Service Reduction (WISeR) Model this summer, the agency framed the program as an effort to cut down on unnecessary spending, fraud and abuse in Medicare.
But for ambulatory surgery centers (ASCs), the six-year test could mean new layers of prior authorization, administrative work and uncertainty around how advanced technologies will be applied in clinical decisions.
The voluntary model – set to begin Jan. 1, 2026 – will operate in six states: New Jersey, Ohio, Oklahoma, Texas, Arizona and Washington. It applies only to traditional Medicare and focuses on certain services that CMS says have historically carried a higher risk of misuse.
These include skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy for osteoarthritis, according to CMS.
Based on what the agency has shared publicly, the WISeR model will use artificial intelligence and machine learning tools to determine whether requests for these services meet Medicare’s coverage standards.
“WISeR does not change Medicare coverage or payment policy,” CMS wrote in a fact sheet. “Health care coverage for people with Medicare will not change, and they retain the freedom to seek care from their Original Medicare provider or supplier of choice. Payment to providers and suppliers for covered items and services will not change under the model.”
A focus on fraud
For Stacy LaLonde, vice president of payer strategy at Compass Surgical Partners, the WISeR model is best understood as an extension of the federal government’s push to reduce fraud.
“[CMS is] requiring authorizations for a subset of procedures to see if, basically, these procedures are actually needed,” LaLonde told ASC News. “It’s all around the fraud, waste and abuse initiatives that this new administration is taking on.”
Wasteful or inappropriate care accounts for up to 25% of health spending in the U.S., with Medicare alone paying $5.8 billion for such services in 2022, CMS wrote in the fact sheet.
“[The model will harness AI and machine learning] to streamline the review process for certain items and services that are vulnerable to fraud, waste and abuse, helping people with Medicare receive safe and appropriate care and protecting federal taxpayers,” CMS wrote.
But ASC leaders worry the oversight could come at the cost of timely, efficient care.
Wes Battiste, an adviser with Avanza Healthcare Strategies, said the reliance on AI review threatens to interfere with physicians’ ability to deliver the right care at the right time.
“Physicians have historically relied on Medicare fee-for-service to minimize interference in delivering the best care for patients,” Battiste told ASC News. “This meant patients could not only receive the right care, but also receive it at the right time. Under WISeR, however, AI will determine whether care is appropriate.”
The services under review are already FDA-approved and covered under Medicare’s existing determinations, Battiste said. If an AI system issues a denial, providers can appeal to a human reviewer.
But he questioned whether those reviewers will have the right expertise.
“Payers often fail to assign same-specialty providers, such as a general pediatrician reviewing an adult oncology case, which undermines the process,” Battiste said.
Michael McClain, principal and managing partner at LeftCoast Healthcare Advisors, said more ASC operators should familiarize themselves with the model.
“I would say that I don’t think it’s gotten enough attention,” McClain told ASC News. “Certainly commercial players have been using, or have been suspected of using, AI tools to aid in authorization for years. We know that. And as part of the WISeR study, when you look a little bit into the participants, a lot of the procedures that are tied to that WISeR program are those which cost a lot of dollars.”
Some targeted services, like tissue replacement therapies, have been overutilized under Medicare’s “pass-through” payment codes, which are temporary codes that allow providers to bill charges directly to Medicare without a set value. That structure has historically created opportunities for abuse, McClain said.
“I understand adding some scrutiny around those,” he said. “But my fear is … the states with the highest level of Medicare fraud are, for the most part, excluded from this WISeR set of studies, which is New York, Louisiana, Illinois, California. It’s instead other states. … I’m not really sure why the effort is directed at the states that it’s directed towards.”
For McClain, the program looks less like a fraud prevention effort and more like a cost-control mechanism.
“Is this simply an effort to reduce costs, not reduce fraud, and reduce utilization and delay care for those spaces?” he said. “There has been a focus on Medicare over the last several years to focus on cost savings as a proxy for improvement. If they focus on dollars rather than the source of problems, it’s sort of the big shiny target.”
AI oversight and governance
Even more concerning is the lack of clear oversight for how AI will be deployed in the model, McClain said.
“It seems that in this we’re adding what I would say is yet unproven technology, without a lot of oversight, to the care of seniors,” he said. “I think one of the challenges we have with AI is that we still lack governance. What is the overarching policy or overarching structure that reviews the AI agents that are doing the work? What in terms of the conversion rate, the correction rate?”
While he supports the use of AI for repetitive, administrative tasks, McClain drew a line at letting algorithms weigh in on nuanced medical decisions.
“I’m all for utilizing artificial intelligence in the right setting, which is to reduce administrative burden. … I’m not a big fan of throwing AI into a highly complicated, nuanced process and expecting it to knock it out of the park,” he said.
For ASCs in the six pilot states, the WISeR model represents a potential change in how certain cases are scheduled, documented, and reimbursed.
While CMS says patient coverage and provider payments will remain unchanged, the additional prior authorization requirements and post-service reviews will likely add new layers of uncertainty.
The result could be care delays that ripple across ASC operations.
“Staff will likely face additional documentation burdens,” Battitste said. “When a payment review occurs, the reviewing entity may request records from the ASC, delaying reimbursement and potentially reducing or denying payment. For cases requiring prior authorization, care will be delayed. If those delays reduce case volume below the threshold needed for cost efficiency, ASCs may be forced to cut staff.”
