A Trump administration pilot program that uses artificial intelligence to process Medicare prior authorization requests is facing sharp criticism from lawmakers and healthcare providers after federal documents confirmed widespread delays, technical failures, and a financial incentive structure that rewards contractors for denying care.
The program, called WISeR (Wasteful and Inappropriate Service Reduction), launched in January across six states and requires pre-approval for roughly a dozen medical services that previously did not need it. Documents obtained by the Electronic Frontier Foundation through litigation reveal that vendors were unprepared at rollout, denials outpaced approvals, and patients waited weeks or months for decisions while in pain.
Vendors were not ready for launch
One vendor, Innovaccer, asked the government to delay the rollout. When officials declined, the company set its system to automatically approve all requests temporarily to avoid creating a backlog. Another vendor, Zyter, had data discrepancies for months because it apparently did not understand the difference between Medicare Part A, which covers inpatient and hospital care, and Part B, which covers outpatient services. Zyter CEO Sundar Subramanian told Ars Technica that the company is now "fully functional across Medicare Part A and Part B claims."
The Government Accountability Office determined in May that Trump officials did not follow proper procedure in setting up the program, raising questions about its legality. Still, the Centers for Medicare & Medicaid Services (CMS) appears to be moving ahead with plans to expand WISeR to additional services, including cancer treatments, advanced imaging, and cardiac procedures.
Denials outpace approvals, and delays stretch for months
One vendor, Virtix, denied more prior authorization requests than it approved in late March. Of 6,096 requests reviewed, it approved 2,863 and denied 3,233 - a 53 percent denial rate. WISeR is supposed to deliver decisions within 72 hours, but documents show requests pending after 83 days. One healthcare provider reported that a surgery "was pushed back almost two months due to zero communication."
Virtix was placed on a Corrective Action Plan for noncompliance with the 72-hour window. The company said it has since reduced its average turnaround time to 1.18 days and that the corrective plan ended in August. "We understand that any delay in care is difficult for patients, and we do not take lightly the impact that the prior authorization process can have on people who are in pain and seeking relief," Virtix said in a statement.
Providers report patients crying in pain
Feedback from healthcare providers paints a stark picture of the program's real-world impact. One Ohio provider, writing in all capital letters, described watching three patients cry at bedside while waiting for authorization for a minimally invasive spine surgery:
"I HAVE HAD TO WATCH 3 PATIENTS CRY AT BEDSIDE FOR NOT HEARING BACK ON THEIR PRIOR AUTH FOR KYPHOPLASTY/VERTABRAL AUGMENTIATION PROCEDURE. THESE PATIENTS ARE IN DEEP PAIN. SO MANY OFFICES OF MY PHYSICIANS ARE NOT HEARING BACK FROM INNOVACCER… THERE IS NO WAY TO GET A HOLD OF A HUMAN TO TALK TO… WHAT A DISGRACE TO THE HUMAN RACE IN AMERICA. THIS IS THIRD WORLD."
Another Ohio provider said the lack of accessible support and timely communication was "deeply concerning," adding that "patients deserve better. Providers deserve answers. And systems designed to improve care should never result in preventable suffering."
Contractors get paid more when they deny care
CMS planning documents describe a "novel payment approach" in which WISeR contractors are "compensated based on a share of averted expenditures." For every denied request, CMS calculates what the regional benchmark cost would have been and pays the company 25 percent of that amount. The CMS Office of the Actuary wrote bluntly in a memo that "model participants will have an incentive to deny as many claims as possible."
During a Senate hearing last week, Sen. Patty Murray (D-Wash.) pressed Chris Klomp, the nominee for Deputy Secretary of Health and Human Services, on whether contractors make more money if they deny care. "My understanding is no," Klomp replied - an answer that contradicts the CMS documents. Klomp pointed to an Aggregate Quality Score system that penalizes companies for inappropriate denials, but the penalty structure is modest. A company scoring between 84 percent and 60 percent sees only a 5 percent reduction in its payment. Even a failing score below 60 percent still earns 90 percent of the full payment.
Companies are not paid if a denial is appealed and overturned, but data suggests few patients go through the appeal process. In Medicaid Advantage, only 11.5 percent of care denials are appealed, though 80 percent of appeals result in the denial being overturned.
Why this matters for government and healthcare professionals
For professionals working in government healthcare roles, the WISeR rollout is a case study in what happens when AI-driven prior authorization is deployed without adequate vendor readiness, clear accountability mechanisms, or meaningful penalties for poor performance. The program's payment structure - which financially rewards denials - creates a direct conflict between contractor profits and patient access to care. As CMS plans to expand WISeR to oncology, cardiac procedures, and other high-stakes services, the operational failures documented in the first six states signal the risks of scaling a system that providers describe as unresponsive and harmful. Understanding how AI is being integrated into Medicare administration - and where those integrations break down - is becoming essential knowledge for anyone managing compliance, vendor oversight, or patient advocacy in the federal healthcare space. Professionals looking to build literacy in these systems can explore AI for Government Courses and AI for Healthcare Courses.
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