Mary Langley is among about 60% of Oklahoma Medicare beneficiaries covered by traditional Medicare. The retired 70-year-old from Stillwater is relatively healthy, enjoying pickleball and agility training with her dogs. But she chose to pay more for her coverage instead of opting for a federally financed, private Medicare Advantage plan.
“I just felt like I didn't want to be at the mercy of private insurance companies as far as asking for referrals or denying claims,” Langley said.
Traditional Medicare rarely requires providers to seek approval through prior authorization. This process, which has been criticized for resulting in denials and delayed care, allows health plans to review whether care is medically necessary and covered.
Langley said she’s had no trouble accessing care, including joint injections, which have helped her manage pain from arthritis in her shoulder for about two years. But this month, she’s gearing up for shoulder replacement surgery – a choice she’s making earlier than expected.
“All the years that we worked and put into Social Security, waiting on Medicare, and all these things that we anticipated making our senior years, our retirement, possible – don't feel as certain anymore,” Langley said.
Langley is concerned about the Wasteful and Inappropriate Service Reduction Model, or WISeR, which is being tested in six states, including Oklahoma, starting this month. The Centers for Medicare and Medicaid Services' six-year pilot is using private companies with AI tools to process prior authorizations for and reduce spending on over a dozen treatments under traditional Medicare.
Although CMS said it will penalize these companies for inappropriate determinations or high appeal rates, the agency will pay them a percentage of the savings from denied claims. If the model is deemed successful, it could expand to additional services and states.
Oklahoma providers and patients are apprehensive about WISeR's payment model and how the program could impact access to care for the nation’s growing aging population.
“It's just what they call cutting the puppy dog's tail off an inch at a time,” Langley said. “ … I just don't necessarily believe, first of all, that we'll get the truth or the honest results, or that it will stop with this.”
What does the model entail?
The WISeR Model is working to decrease what federal officials have deemed as low-value services, “shown to have little to no clinical, evidence-based benefit” and vulnerable to fraud, waste and abuse.
Those include epidural steroid injections for pain management, cervical fusion, diagnosis and treatment of impotence, and skin and tissue substitutes. Click here to read the full list of targeted services.
CMS chose six states to test the pilot, including New Jersey, Ohio, Texas, Arizona and Washington. The agency said during webinars that states were chosen based on comparison feasibility.
States are divided into geographic areas where a private health care insurer, or Medicare Administrative Contractor, has been awarded jurisdiction to process Medicare Part A and B claims.
Claire Kihn, the model lead for WISeR, said the criteria for selected states included service volume, geographic diversity and the presence or absence of selected services. They’ll be compared with the shaded states to determine the model’s impact based on certain outcomes like quality measures and “frequency of delivery.”
The federal agency has hired private companies in each pilot state. Providers can submit requests with documentation to their state’s assigned private company or Medicare Administrative Contractor, who will forward it to the company.
They can also opt not to submit a prior authorization request for an included service. But their claim will be subject to pre-payment medical review to ensure it meets Medicare criteria.
Prior authorization determinations will be issued within a few days. In the event of a denial, providers can resubmit their requests.
Humata Health was chosen to manage Oklahoma’s WISeR requests. The company lists four venture capital firms backed by insurance companies as key investors, including the Blue Venture Fund, backed by Blue Cross Blue Shield, and Optum Ventures, backed by UnitedHealth Group.
Founder and former Mayo Clinic interventional radiologist Dr. Jeremy Friese has worked for years to automate prior authorization for patients and providers. Friese said prior authorization, as it exists today, is a “friction-laden, manual process” that is “stuck in the dark ages.”
He said Humata has a team of product and engineering staff who built software to streamline the process by embedding and working with electronic medical records.
Humata’s interest in WISeR stems from wanting to demonstrate that submissions and decisions can be made by a computer, he said, allowing patients to access care more quickly.
Friese said the AI technology can’t deny care. If it finds a claim without enough information or if it sits in a gray area, he said they have doctors and nurses available to review it. Humata has a partner with providers “in all of these areas that we are tackling,” Friese said.
Friese didn’t share the name of the partner with StateImpact at the time of its December interview, saying Humata hadn’t made the news public yet
“That's always, always, always a specialized clinician that will make that final call,” Friese said.
What are providers and advocates saying about WISeR?
Dr. Mary Clarke, a past president of the Oklahoma State Medical Association, works as a family physician in Stillwater. Stillwater Medical is out-of-network with Medicare Advantage plans. This, she said, is because Advantage plans continue to cut reimbursement rates for services.
Now, as the WISeR model kicks off, she’s worried the federal government is taking a step toward privatizing traditional Medicare.
“The idea has been if we can reduce unintended costs, we will save Medicare money. That sounds like a great plan,” Clarke said. “The problem is that if you extrapolate what we normally see with the prior authorizations in the private industry to Medicare, then we're going to have patients who are never going to get the care at all.”
According to KFF, in 2023, 11.7% of denied prior authorization requests were appealed in Medicare Advantage. Approximately 81.7% of those appeals were partially or fully overturned, representing medical care ordered by a provider that was delayed but ultimately deemed necessary.
Clarke said she’s concerned about WISeR’s payment model, where companies are compensated in part based on a share of averted costs from denied claims. She said that system is a conflict of interest.
“[CMS is] adding a whole level of administration and cost to Medicare to review claims to deny them,” Clarke said.
“If you're going to have your clinicians make decisions on the denials, then why do we need an additional level of business in the middle?” she added.
When asked about the payment model, Friese said there are strong incentives to get it right, and Humata is working to ensure the process is transparent to providers and efficient for patients. According to the company’s LinkedIn, Humata received over 125 prior authorization requests during its first afternoon live, “with AI automatically making decisions when criteria was met.”
But Clarke is worried about patients losing out on things like steroid injections, which help manage pain without opiates or surgery.
“I think this is a terrible way to tell patients that this is unnecessary for you. You just need to be in pain,” Clarke said.
Clarke added that providers don’t get additional compensation for their time spent on prior authorization. A study published in the National Library of Medicine notes that prior authorization is estimated to account for $35 billion in U.S. health care administrative spending.
David Lipschutz, co-director at the Center for Medicare Advocacy, said there’s a disconnect between this program and Trump administration efforts to reform prior authorization. Lipschutz recently testified before a U.S. House health subcommittee in support of legislation that would prevent the Secretary of Health and Human Services from testing WISeR and models like it under traditional Medicare.
WISeR is set to run through the end of 2031. If CMS can show it saved money without negatively impacting patient outcomes or it improved them without costing more money, Lipschutz said it can expand the model – even nationwide. He hopes there won’t be any “premature decisions” to widen the program’s scope.
“If you step back, you can say, ‘Well, this is only a few services in a few states.’ And if you're in that state, it means a lot more," Lipschutz said. “But is this cracking the door open to injecting more of the worst of managed care into traditional Medicare, which is largely absent of prior authorization?”
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