Susan Dentzer: Why more prior authorization in traditional Medicare is a no-brainer

The word accountable in accountable care organization (ACO) means being vigilant in monitoring healthcare’s costs and quality. And lately, many ACOs participating in the Medicare Shared Savings Program (MSSP) have been vigilant in spades. 

First, some ACOs tipped CMS off about a $2 billion urinary catheter fraud when that spending hit their bottom lines in 2022 and 2023.^a In 2024, other ACOs flagged questionable or fraudulent spending on so-called skin substitutes for wound care, for which the Part B Medicare payment can exceed $1,000 per square centimeter.^b  Total Medicare spending for provision of skin substitutes is expected to reach $10 billion this year.  

ACOs’ obstacles to being accountable

With ACOs supposedly on the frontlines in the fight for accountable care, you’d think giving them backup support to protect against further Medicare waste fraud or abuse would be a popular cause. After all, the MSSP ACOs sit squarely in traditional Medicare — and although they are accountable for the spending of their attributed patients, they can’t control which physicians, and particularly which specialists, these patients access for care. Given that multiple critics are now pushing back on one important way to block an explosion of unnecessary care and the excess spending it elicits, the nation is apparently still far from promoting true accountability in traditional Medicare.

The gradual rise of a WISeR alternative

At issue is the planned Wasteful and Inappropriate Service Reduction (WISeR) model introduced recently by the Center for Medicare and Medicaid Innovation (CMMI).^c WISeR will test over six years what the critics apparently consider unthinkable: incorporating high-tech, AI-enabled prior authorization into traditional Medicare for 15 items or services long deemed vulnerable to overuse, abuse or fraud (see the exhibit on page 16 for the complete list of services). 

Obtaining such prior justification and approval for coverage of some services has long been a fixture of Medicare Advantage (MA). But it has played a far lesser role in traditional Medicare, where the norm is to perform a simpler preservice review, including whether a service is “medically necessary” and has been the subject of a local or national coverage determination or other provisions.^d 

Moreover, this latter process, carried out by Medicare administrative contractors, has been “slow and poorly implemented,” noted Abe Sutton, CMMI’s director, and it clearly hasn’t managed to halt much fraud, waste or abuse along the way.

An inaugural choice

Under the new CMMI experiment, however, as of next January, healthcare providers in six states (Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington), where high levels of questionable spending have been seen, will have a choice: They can submit prior authorization requests if they wish to deliver these services to patients, or they can simply deliver them and then go through a post-service, prepayment medical review.

Most will opt for prior authorization, because providers, having delivered a service, tend to be unwilling to risk nonpayment. Meanwhile, organizations expert in managing prior authorization using AI and related tools will also be recruited into the fight and may be able to retain 10% to 20% of any savings they achieve by preventing payment for unnecessary care.

Opposition to the model

The model has come under attack from an unlikely source: Donald Berwick, MD, MPP, former administrator of CMS, the founder and longtime CEO of the Institute for
Healthcare Improvement and one of the authors of an important journal article describing the vast waste in U.S. healthcare.^e  Berwick has been joined by congressional Democrats who like him have long backed “Medicare for All” proposals and bipartisan legislation to enable high-tech prior authorization in MA.^f

But in a what’s-good-for-the-goose-isn’t-good-for-the-gander twist, these House Democrats who apparently credit physicians with only the noblest of Hippocratic aspirations argue that a virtue of traditional Medicare is that patients “know their care will be determined by their doctors and not by insurance companies.” 

Those patient-focused doctors apparently include Minnesota’s Mohiba Tareen, MD, a dermatologist and founder of Tareen Dermatology, and her husband Basir Tareen, a urologist who also serves as the dermatology company’s CEO. In 2024, the Tareens paid $1.63 million to settle a Justice Department case involving allegations that they improperly billed Medicare and the Veterans Administration for pricey skin substitutes used unnecessarily in relatively standard Mohs surgery (in which any small incisions that are not left open are normally closed with a few stitches).^g

Berwick is especially alarmed about the incentives for organizations that will devise and execute prior authorization. He expects they will probably be the same health insurers that now perform that function in MA and that could have a large financial motivation to deny more care. 

CMMI offers reassurances

CMMI is taking pains to describe the many limitations on the new form of prior authorization and the various safeguards that will surround the process.^h Those safeguards include promises that fundamental Medicare coverage won’t change, and that emergency and inpatient services will be exempt. Organizations carrying out prior authorization will drive toward auto approvals of many requests and turnaround times within 72 hours for others. A human clinician will have to weigh in if a request is flagged for denial, and organizations will be audited regularly to ensure that they meet strict performance goals. 

Separately, all forms of prior authorization, in MA and elsewhere, are likely to move in these directions to minimize excessive burdens on providers and patients. A key health sector industry group focused on AI is drafting new standards for the use of the technology in prior authorization.ⁱ A 2024 CMS rule has charted a path toward high-tech prior authorization in MA, and health plans recently committed to major prior authorization improvements across all lines of insurance to simplify processes and reduce unnecessary burdens on providers and patients.^j

An unavoidable reality

As painful as utilization management may sometimes be, it’s delusional to think that traditional Medicare can duck more of it for much longer. First, people are often harmed by unnecessary healthcare, through increased or unrelieved pain, infections or other adverse effects. Second, all taxpayers foot the bill as do Medicare beneficiaries through higher premiums.

The Medicare program undeniably is facing huge financial challenges, which make it essential to push traditional Medicare toward greater accountability while also improving MA. The organization that I lead, America’s Physician Groups has set forth multiple ways to do so.^k And among those remedial options, the WISeR model could well be called a no-brainer. 

Footnotes

a. CMS, “Urinary catheter case study: CMS’ swift action saves billions,” Page viewed Aug. 29, 2025.
b. Firth, S., “Experts sound the alarm on pricey skin substitutes in wound care industry,” MedPage Today, March 18, 2025; and Bohl, K., Barnes, D., and Carter-Mason, G., “Wound care in the crosshairs: Reimbursements risks amid skin substitute fraud investigations,” Bass, Berry & Sims, June 23, 2025.
c. CMS.gov, “WISeR (Wasteful and Inappropriate Service Reduction) Model,” page last modified July 29, 2025.
d. CMS.gov, “Prior authorization and pre-claim review program stats for fiscal year 2023,” Jan. 17, 2025.
e. Berwick, D.M., and Hackbarth, A., “Eliminating waste in U.S. health care,” JAMA, April 11. 2012.
f. Letter from congressional Democrats to Dr. Mehmet Oz, Aug. 7, 2025; and U.S. Representative Mike Kelly, “Kelly, colleagues reintroduce critical prior authorization reform bill,”  press release, May 22, 2025.
g. United States Attorney’s Office, District of Minnesota, “Tareen Dermatology agrees to pay more than $1.6 million to resolve alleged False Claims Act violations,” press release, June 28, 2024.
h. CMS.gov, “WISeR Model Frequently Asked Questions,” page last modified Aug. 12, 2025.
i. Coalition for Health AI, “Responsible health AI for all,”  2025.
j. CMS.gov, “CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F),” page last modified Aug. 20, 2025; and AHIP, “Health plans take action to simplify prior authorization,”  press release, June 23, 2025.
k. American’s Physician Groups, Medicare done right: Prescriptions for success, report, March 2025.