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MEDICARE WILL REQUIRE PRIOR APPROVAL FOR CERTAIN PROCEDURES  
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Reed Abelson and Teddy Rosenbluth
August 28, 2025
The New York Times
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_ A pilot program in six states will use a tactic employed by private
insurers that has been heavily criticized for delaying and denying
medical care. _

Frances L. Ayres worried that a new program under traditional
Medicare will involve the types of pre-approval hassles for medical
care that she had tried to avoid. Credit..., Nick Oxford for The New
York Times

 

Like millions of older adults, Frances L. Ayres faced a choice when
picking health insurance: Pay more for traditional Medicare, or opt
for a plan offered by a private insurer and risk drawn-out fights over
coverage.

Private insurers often require a cumbersome review process that
frequently results in the denial or delay of essential treatments that
are readily covered by traditional Medicare. This practice, known as
prior authorization, has drawn public scrutiny
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which intensified
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the murder of a UnitedHealthcare executive last December.

Ms. Ayres, a 74-year-old retired accounting professor, said she wanted
to avoid the hassle that has been associated with such practices under
Medicare Advantage, which are private plans financed by the U.S.
government. Now, she is concerned she will face those denials anyway.

The Centers for Medicare and Medicaid Services plans to begin a pilot
program
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would involve a similar review process for traditional Medicare, the
federal insurance program for people 65 and older as well as for many
younger people with disabilities. The pilot would start in six states
next year, including Oklahoma, where Ms. Ayres lives.

The federal government plans to hire private companies to use
artificial intelligence to determine whether patients would be covered
for some procedures, like certain spine surgeries or steroid
injections. Similar algorithms used by insurers have been the subject
of several high-profile
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which have asserted that the technology allowed the companies to
swiftly deny large batches of claims and cut patients off from care in
rehabilitation facilities.

The A.I. companies selected to oversee the program would have a strong
financial incentive to deny claims. Medicare plans to pay them a share
of the savings generated from rejections.

The government said the A.I. screening tool would focus narrowly on
about a dozen procedures, which it has determined to be costly and of
little to no benefit to patients. Those procedures include devices for
incontinence control, cervical fusion, certain steroid injections for
pain management, select nerve stimulators and the diagnosis and
treatment of impotence.

Abe Sutton, the director of the Center for Medicare and Medicaid
Innovation, said that the government would not review emergency
services or hospital stays.

Mr. Sutton said the government experiment would examine practices that
were particularly expensive or potentially harmful to patients.
“This is what prior authorization should be,” he said.

The government may add or subtract to the list of treatments it has
slated for review depending on what treatments it finds are being
overused, he said.

But while experts agree that wasteful spending exists, they worry that
the pilot program may pave the way for traditional Medicare to adopt
some of the most unpopular practices of private insurers.

The program, called the Wasteful and Inappropriate Service Reduction
Model, is already drawing opposition from Democratic lawmakers, former
Medicare officials, physician groups and others.

Patients are also leery. “I think it’s the back door into
privatizing traditional Medicare,” Ms. Ayres said.

People enrolled in traditional Medicare who live in Arizona, New
Jersey, Ohio, Oklahoma, Texas and Washington State will be included in
the experiment, which is expected to start in January and last for six
years.

Dr. Vinay Rathi, an Ohio surgeon and an expert in Medicare payment
policy, warned that the experiment could recreate the same hurdles
that exist with Medicare Advantage, where people enroll in private
plans. “It’s basically the same set of financial incentives that
has created issues in Medicare Advantage and drawn so much
scrutiny,” he said. “It directly puts them at odds with the
clinicians.”

Typically, these A.I. models scan a patient’s records to determine
if a requested procedure meets an insurer’s criteria. For instance,
before authorizing back surgery, the system might search for proof
that a patient first tried physical therapy or received an MRI showing
a bulging disc. Many companies say human employees are involved at the
final stages, to review the A.I. evidence and approve the
recommendations.

Insurers defend these tactics as being effective in reducing
inappropriate care, such as by preventing someone from getting back
surgery at tremendous cost instead of another treatment that would
work just as well.

Government officials said that any denials would be done by “an
appropriately licensed human clinician, not a machine.”

Mr. Sutton also emphasized that the government could penalize
companies for inappropriate decisions.

A group of House Democrats, including Representative Alexandria
Ocasio-Cortez of New York, warned in a letter to government officials
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late July that giving for-profit companies a “veto” over care
“opens the door to further erosion of our Medicare system.”

Private plans under Medicare Advantage have become increasingly
popular, with a little more than half of older Americans and people
with disabilities eligible for the program and some 34 million
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But many, like Ms. Ayres, are willing to forgo some of the additional
benefits the private plans offer, like dental checkups and gym
memberships, to avoid having to jump through numerous hoops to get
care.

“It’s really surprising that we are taking the most unpopular part
of Medicare Advantage and applying it to traditional Medicare,” said
Neil Patil, a senior fellow at Georgetown and a former senior analyst
at Medicare.

The American Medical Association wrote in a letter
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doctors view prior authorization “as one of the most burdensome and
disruptive administrative requirements they face in providing quality
care to patients.” Most patients who appeal are successful, but a
vast majority never appeal.

Democrats and Republicans in Congress have supported legislation that
would curb some of the insurers’ most troublesome practices. The
Biden administration enacted some new rules, and the Trump
administration was eager to take credit
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pushing insurers to pledge to a series of reforms just a few days
before unveiling this new program.

In announcing the new model, Dr. Mehmet Oz, the administrator of the
Medicare agency, said the goal was to root out fraud, waste and abuse.

“It boils down to patient harm,” Mr. Sutton said. The model is
expected to save several billions of dollars over the next six years,
although it could save more if it were expanded.

There are clear-cut examples where Medicare has wasted billions on
questionable medical care. The agency came under scrutiny
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this year for spending billions of dollars on expensive “skin
substitutes” of dubious value. The pilot program would require
patients to seek prior authorization before getting a skin substitute.

But if the algorithm used to authorize those procedures proves to save
the government money, Dr. Rathi fears C.M.S. may feel justified in
broadening the program to include services that are not such
“low-hanging fruit.”

“You’re kind of left to wonder, well, where does this lead
next?” he said. “You could be running into a slippery slope.”

How insurers make their decisions remains opaque. A spokesman for
Health and Human Services, which oversees the Medicare agency,
declined to identify which companies had submitted applications for
the contract.

Contractors hired by the government are supposed to watch over
payments to ward against inappropriate or wasteful coverage. Those
reviews generally happened after someone had received a treatment,
though the Biden administration instituted a modest pre-approval
program that did not use A.I.

The new model relies on an additional set of private companies for
traditional Medicare that have a very clear incentive to deny care.

The companies represent “a whole new bounty hunter,” said David A.
Lipschutz, the co-director for the Center for Medicare Advocacy, one
of the groups that has urged government officials to abandon the
program.

_Reed Abelson [[link removed]] covers the
business of health care, focusing on how financial incentives are
affecting the delivery of care, from the costs to consumers to the
profits to providers._

_Teddy Rosenbluth [[link removed]] is a
Times reporter covering health news, with a special focus on medical
misinformation._

* Medicare
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* clinical trials
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* prior approval
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