News: CMS plans a new prior authorization pilot program for traditional Medicare

CMS released an announcement that traditional Medicare will add prior authorization (PA) requirements in six states for specific services, with a pilot program going into effect on January 1, 2026, and ending on December 31, 2031. According to the announcement, the 17 services chosen for these new requirements are ones particularly vulnerable to waste and abuse, including skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy for knee osteoarthritis.

The six states where requirements will apply to providers are Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. At the same time, more than 40 payers have recently announced that they intend to reduce the volume of services subject to PA, HealthLeaders reported.

In the announcement, CMS says it will partner with technology companies rather than Medicare Administrative Contractors to conduct PA reviews via the Wasteful and Inappropriate Service Reduction (WISeR) Model, which intends to test the ability of enhanced technologies, including AI, to streamline and expedite PA processes. Final decisions to deny claims will still be made by human clinicians.

CMS stated providers can either submit PA requests before performing service, to ensure claims meet the new requirements, or let their claims go through pre-payment medical review following a service. This announcement may indicate a shift towards the integration of more utilization management tools into traditional Medicare, according to HealthLeaders, which averaged one PA request for every 100 enrollees in 2023 (compared to Medicare Advantage, which averaged almost two PA requests per enrollee).

Some have expressed concern that the new policy will add to the administrative burden that providers already face. “One of the hallmarks of traditional Medicare has been the ability for physicians, not government, to determine what's clinically appropriate for their patient,” Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, said in a statement.

Editor’s note: To read HealthLeaders’ coverage of this story, click here. To read the CMS announcement, click here.