Your Medical Coverage Could Soon Be Decided By AI: How The Feds Are Using NJ As A Trial

NEW JERSEY — Medicare recipients in the Garden State will be used to assess the ability of artificial intelligence (AI) in choosing what operations should, and shouldn't, be covered by insurance providers.

The Wasteful and Inappropriate Service Reduction program begins on Jan. 1, 2026 and will run through Dec. 31, 2031. The trial also includes patients in Arizona, Ohio, Oklahoma, Texas, and Washington.

The model is voluntary for companies to participate in and was unveiled by the Centers for Medicare and Medicaid Services, along with their administrator, Dr. Mehmet Oz, in June.

The hope is that the program will upgrade the "prior authorization process," also known as "pre-authorization," which mandates that providers get certain clearances from insurers before writing prescriptions or performing other services.

Using the model, the federal government will partner with companies to use AI and other enhanced technologies to target services like skin and tissue substitutes, nerve stimulator implants, and knee arthroscopy for knee osteoarthritis.

These operations, according to the model, have been labeled as vulnerable to fraud, waste, abuse, and/or inappropriate use.

House Democrats wrote a letter to Dr. Oz in August after reviewing the plan following its unveiling in June. In it, lawmakers raised concerns that the model will "limit beneficiaries' access to care, increase burden on our...healthcare work force, and...put profit over patients."

According to Oz, "Combining the speed of technology and the experienced clinicians, this new model helps bring Medicare into the 21st century by testing a streamlined prior authorization process, while protecting Medicare beneficiaries from being given unnecessary and often costly procedures."

Inpatient-only services, emergency services, and services that could lead to a "substantial risk" to patients if heavily delayed are not included in these trials.

Providers can submit a pre-authorization request for certain items or utilize a review that would occur after the service and before payment.

Participants will get a percentage of the savings that can be directly tied to not using "wasteful or inappropriate care," the model said.

Companies in the model will be spread across geographic locations and have clinicians practicing who can conduct medical reviews and coverage determinations.

The Centers for Medicare and Medicaid Services is steadfast that the process of using technology for this purpose is a review tool to assist humans. The final decisions for which items do, and don't, meet Medicare coverage will be made by appropriately-certified clinicians and not machines.

Medicare coverage and payment ramifications are also not changing. Coverage for original Medicare beneficiaries will stay the same, with the freedom to receive care from a provider or supplier of their choice.

"Low-value services, such as those of focus...offer patients minimal benefit and, in some cases," according to Abe Sutton, Director of the Centers for Medicare and Medicaid Services Innovation Center, "can result in physical harm and psychological stress. They also increase patient costs."

Questions regarding the program can be directed to WISeR@cms.hhs.gov. Additional information is also available on the program's website.

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