WISeR Model: Executive Briefing and Architecture Analysis

1. Executive Summary and Strategic Context

What Is This Model and What Problem Does It Solve?

The Wasteful and Inappropriate Service Reduction (WISeR) Model is a six-year CMMI innovation test running from January 1, 2026 through December 31, 2031 across six states: New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington. The model is structured as two three-year agreement periods and is currently active with six participants.

WISeR's foundational premise is that Original Medicare's fee-for-service payment structure creates inherent incentives to bill higher volumes of services, including those that are medically unnecessary or inappropriate. Wasteful medical care spending accounts for an estimated 25% of total U.S. healthcare spending, and Medicare — which accounted for $1.03 trillion in spending in 2023 — is disproportionately vulnerable given the age and complexity of its beneficiary population. MedPAC estimated Original Medicare spent between $1.9 billion and $5.8 billion on low-value services in 2022 alone. Civil settlements and judgments on health care fraud under the False Claims Act reached $1.8 billion in 2023. A 2019 study further estimated that treatment by subsequently prosecuted fraud perpetrators contributed to as many as 6,700 premature deaths among Original Medicare beneficiaries.

The model's operational solution is to insert AI- and ML-enabled technology companies — not providers, ACOs, or health systems — as the primary model participants. These companies manage the prior authorization and pre-payment medical review process for a defined set of high-risk, high-value items and services in Original Medicare. This is architecturally distinct from all prior CMMI models: WISeR is the first Innovation Center model in which technology innovators are the sole model participants, and it is the first model to incentivize AI/ML tools to ensure payment compliance with Medicare documentation, coverage, payment, and coding rules.

The targeted services include items with documented fraud, waste, and abuse histories: skin and tissue substitutes, spinal cord and electrical nerve stimulators, sacral nerve stimulation, cervical fusion, epidural steroid injections, hypoglossal nerve stimulation for obstructive sleep apnea, percutaneous vertebral augmentation, and arthroscopic lavage/debridement for osteoarthritic knee, among others. These categories were selected because they have existing publicly available coverage criteria (via NCDs or LCDs), are typically elective and non-emergent, are of sufficient claims volume to be evaluable, and have documented exposure to FWA.

Critically, WISeR does not change Medicare coverage, payment rates, or coding rules. It enforces existing rules earlier and more efficiently in the claims adjudication process.

Strategic Significance for the VBC Market

Despite WISeR's formal categorization as a Disease-Specific and Episode-Based Model, it does not operate through any of the typical VBC mechanisms — no shared savings, no beneficiary attribution, no total cost of care accountability. Its strategic significance for VBC stakeholders lies elsewhere: WISeR establishes a private-sector technology layer between providers and Medicare payment, applying commercial utilization management standards to Original Medicare for the first time at scale.

For ACOs and health systems operating in WISeR jurisdictions, the operational impact is direct and immediate. Providers billing any of the 13 active WISeR-covered service categories in Arizona, New Jersey, Ohio, Oklahoma, Texas, or Washington face a binary choice: submit a prior authorization request before furnishing the service, or furnish the service and face pre-payment medical review before the claim is paid. There is no opt-out. Providers under active Unified Program Integrity Contractor (UPIC) review are excluded from participation entirely — their claims follow existing MAC enforcement pathways.

For organizations with high volumes of the selected services — orthopedic groups, pain management practices, neurology and urology specialists, and wound care programs — the administrative and revenue cycle implications are significant. Determinations carry a 3-calendar-day standard turnaround and 2-calendar-day expedited turnaround, substantially faster than traditional MAC pre-payment review timelines that can run weeks to months. However, affirmation decisions are valid for only 120 calendar days from the decision date, requiring workflow discipline to avoid expiration and reauthorization costs.

MA plan executives and Medicare Advantage strategists should note WISeR explicitly acknowledges that MA beneficiaries receive 9.2% fewer low-value care services than Original Medicare beneficiaries, attributing this to more extensive utilization management. WISeR is a direct attempt to replicate that efficiency in FFS Medicare using the same third-party technology vendors that MA plans already employ. The model's theory of change is that bringing commercial prior authorization standards into Original Medicare — with AI-assisted affirmations and mandatory human clinical review for all non-affirmations — will achieve comparable low-value care reductions without restricting access to medically necessary services.

Political Context and Administrative Alignment

WISeR is a signature initiative of the Trump administration's second-term CMS leadership, and its design reflects the administration's stated priorities with unusual directness. Under CMS Administrator Dr. Mehmet Oz and CMMI Director Abe Sutton, the Innovation Center's approach has pivoted toward models that protect taxpayer dollars and reduce fraud, waste, and abuse — rather than the primarily quality-improvement and care coordination orientation of prior CMMI portfolios. WISeR's explicit framing around "protecting American taxpayers" and "fraud, waste and abuse" reflects this reorientation.

The model's design to bring private-sector technology companies into Medicare administrative functions, pay them on a savings-share basis, and use them as a "roadmap for incorporating more private sector innovations into CMS operations" is wholly aligned with DOGE-era government efficiency priorities. The model tests whether commercially proven AI tools — already deployed by MA plans and private payers — can be successfully grafted onto Original Medicare's administrative infrastructure via FedRAMP-certified workflows, HIPAA Business Associate Agreements, and MAC coordination.

CMMI's authority to test this model rests on Section 1115A of the Social Security Act. To enable prior authorization on services not currently subject to it in Original Medicare, CMS is waiving provisions of Sections 1834(a)(15) and 1869(h) of the Act, which limit CMS's ability to conduct prior authorization for DME and physician services, as well as applicable provisions of 42 C.F.R. § 410.20(d) and 42 C.F.R. § 414.234. CMS has explicitly determined that no fraud and abuse law waiver is required, meaning all fraud and abuse laws continue to apply to providers in WISeR jurisdictions.

Market Transformation Implications

WISeR's broader significance lies in what it tests for scalability. Section 1115A requires that a model demonstrate either reduced expenditures or preserved/enhanced quality before CMS can expand it nationally through rulemaking — bypassing Congressional action. If WISeR demonstrates meaningful savings across its six-state footprint through 2031, CMS has a clear pathway to mandate AI-enabled prior authorization across all of Original Medicare for a much broader set of services.

The "gold card" exemption program, implemented beginning July 2026, provides a structural incentive for provider compliance. Providers achieving a 90% prior authorization affirmation rate threshold over an assessment period (with at least 10 prior authorization submissions) earn exemption from the prior authorization and pre-payment review processes. Exemption status is granted at the individual NPI level (not facility or group level), is valid for at least one year, covers all WISeR-selected services across all sites of care, and is reevaluated via no more than 10 additional documentation requests per year. Removal of exemption status requires 60 days' notice before the start of the next quarter. This exemption architecture is the central compliance incentive for providers — and it effectively stratifies the provider market into low-risk (exempted) and high-risk (reviewed) pools.

2. Model Architecture and Payment Structure

Participation Structure

WISeR participants are exclusively technology companies, not providers, health systems, or payers. CMS selected one participant per MAC jurisdiction through a competitive Request for Applications (RFA) process with a submission deadline of July 25, 2025. The six selected participants and their geographic assignments are:

Participant	State	MAC Jurisdiction	MAC Contractor
Cohere Health, Inc.	Texas	JH	Novitas
Genzeon Corporation	New Jersey	JL	Novitas
Humata Health, Inc.	Oklahoma	JH	Novitas
Innovaccer Inc.	Ohio	J15	CGS
Virtix Health LLC	Washington	JF	Noridian
Zyter Inc.	Arizona	JF	Noridian

Eligibility requirements for participants are stringent and operationally specific. Applicants must demonstrate: (1) ability to interpret and apply NCDs and LCDs; (2) active use of AI, machine learning, or algorithmic decision logic in prior authorization workflows, with AI permitted for affirmations but human clinician review required for every non-affirmation; (3) FedRAMP certification and compliance with FISMA, CMS IS2P2, CMS Acceptable Risk Safeguards (ARS), and CMS Authority to Operate (ATO) guidelines; (4) capacity to execute HIPAA Business Associate Agreements with CMS and the MACs; (5) access to board-certified clinicians with specialty expertise relevant to the covered services (e.g., a board-certified orthopedic surgeon for knee arthroscopy reviews); (6) multi-channel submission capability including phone, fax, electronic portals, esMD, and mail; and (7) prohibition on selling any items or services to Medicare-enrolled providers or suppliers to obtain affirmations or non-affirmations.

Participants are explicitly prohibited from having ownership structures that create conflicts of interest, must disclose all relevant financial interests, must report any sanctions or corrective actions within the last five years, and must report any data security incident within one hour to the CMS Service Desk at 1-800-562-1963.

Providers and suppliers are not model participants but are directly subject to the model's processes if they practice in a WISeR state and bill any of the 13 active WISeR-covered service categories. Railroad Medicare beneficiaries and providers under active UPIC review are excluded from WISeR entirely.

Covered Services: Active and Delayed

As of the current operational guide (Version 7.0, July 24, 2026), the following 13 service categories are active under WISeR:

#	Service Category	Coverage Authority
1	Arthroscopic Lavage and Debridement for Osteoarthritic Knee	NCD 150.9
2	Induced Lesions of Nerve Tracts (trigeminal nerve focus)	NCD 160.1
3	Vagus Nerve Stimulation	NCD 160.18
4	Phrenic Nerve Stimulator	NCD 160.19
5	Electrical Nerve Stimulators (spinal cord stimulator focus)	NCD 160.7
6	Incontinence Control Devices	NCD 230.10
7	Sacral Nerve Stimulation for Urinary Incontinence	NCD 230.18
8	Diagnosis and Treatment of Impotence	NCD 230.4
9	Percutaneous Vertebral Augmentation for VCF	LCDs L34228, L38201, L35130
10	Epidural Steroid Injections for Pain Management	LCDs L39015, L39240, L36920
11	Cervical Fusion	LCDs L39741, L39758, L39793
12	Hypoglossal Nerve Stimulation for Obstructive Sleep Apnea	LCDs L38307, L38310, L38385
13	Skin and Tissue Substitutes (lower extremity)	LCDs L35041, L36690

Two services from the original planned list are delayed:

Deep Brain Stimulation (NCD 160.24): Delayed because CPT codes for Stage 1 implantation (codes 61867 and 61868) are on the Medicare Inpatient Only list as of October 2025. CMS will reevaluate in a future performance year.
Percutaneous Image-Guided Lumbar Decompression (NCD 150.13): Delayed due to multiple Coverage with Evidence Development (CED) clinical study approvals currently in effect, creating operational feasibility challenges. CMS will reevaluate in a future performance year.

For device implant services (sacral nerve stimulators, spinal cord stimulators, phrenic nerve stimulators), WISeR applies only to the permanent implantation procedure, not the trial. Documentation submitted for permanent implantation must reflect completion of the trial phase.

Sites of service covered by WISeR include: Hospital Outpatient Department (TOB 13X / POS 19 and 22), Ambulatory Surgery Center (POS 24), home (POS 12), and office (POS 11). Inpatient services are excluded.

Prior Authorization Process Architecture

Process Element	Specification
Submission start date	January 5, 2026 (for services rendered on or after January 15, 2026)
Submission channels	Direct to participant (fax, phone, portal, email) or via MAC (fax, esMD, portal, mail)
MAC routing to participant	Within 1 calendar day of receipt
Standard review turnaround	3 calendar days from receipt of complete request
Expedited review turnaround	2 calendar days (when delay could jeopardize beneficiary life or health)
Affirmation validity window	120 calendar days from decision date
Non-affirmation resubmissions	Unlimited; each must include original non-affirmed UTN
Peer-to-peer review	Available on resubmission; conducted by specialty-matched clinician
Pre-payment review documentation deadline	45 calendar days from participant documentation request
Pre-payment review decision	Within 3 calendar days of receiving complete documentation

Decision types include: Provisional Affirmation, Non-affirmation, Provisional Partial Affirmation (effective April 1, 2026, allowing some codes on a multi-code request to be affirmed while others are denied), and Dismissal (for incomplete, invalid, or out-of-scope requests). A non-affirmation does not prevent the provider from furnishing the service — but a claim submitted after a non-affirmation will be denied by the MAC, triggering the standard Medicare administrative appeals process under 42 C.F.R. Part 405, Subpart I.

For claims billed with an affirmed prior authorization, the Unique Tracking Number (UTN) generated by the MAC must appear on every submitted claim, regardless of whether the determination was affirmative or non-affirmative.

Payment Methodology

WISeR participants are paid a percentage of savings, not a per-review fee. This is the model's most structurally novel feature. Payment is calculated as follows:

Step 1 — Identify attributable non-affirmations: A participant receives payment credit for non-affirmations that were not subsequently followed by an affirmed resubmission or a successfully appealed claim denial within a 120-calendar-day window. The participant receives one payment per beneficiary/item/service/provider combination within any 120-day period, regardless of how many resubmissions were made.

Step 2 — Calculate gross savings: Savings are calculated using average claim-level payments for historical regional claims for the applicable item or service during the prior 12 months, adjusted for performance year pricing. Importantly, total claim payments are used — not just the line-item payment for the specific CPT/HCPCS code — to capture the full revenue impact including secondary and add-on services typically billed alongside the primary procedure.

Step 3 — Apply MAC baseline discount: Because a portion of the savings attributable to WISeR participants would have been captured by MACs through their own prepayment review or post-payment audit processes, CMS applies a historical baseline medical necessity denial rate as a discount to each saved claim. For example, if the MAC historically denied 3% of claims for a given service on medical necessity grounds, the participant's attributed savings for that service are reduced by 3%.

Step 4 — Apply quality adjustment: The resulting savings figure is subject to an annual quality score adjustment, which can only reduce (not increase) the payment. Unfavorable quality performance results in downward payment adjustments and may trigger corrective action.

Step 5 — Hold period and clawback: Payments for non-affirmations are held for up to one year pending potential resubmission. If a provider ultimately furnishes a non-affirmed service, submits a claim, and successfully appeals the denial, the associated model payment is clawed back from the participant once the claim payment is processed.

Performance Measurement Framework

Quality Domain	Key Measures	Payment Consequence
Process Quality	Accuracy audits vs. NCD/LCD criteria; prior authorization volume; processing time; affirmation/non-affirmation rates; resubmission frequency and outcomes; frequency of providers billing non-affirmed services	Downward payment adjustment for high improper determination rates; potential corrective action
Provider/Supplier Experience	Satisfaction survey (modeled on Press Ganey methodology); ease of submission; clarity of documentation requirements; timeliness of response; clarity of determination rationale	Contributes to quality score; affects payment adjustment
Clinical Quality Outcomes	Use of alternative services (e.g., increased surgery or pain medication prescriptions following non-affirmation); adverse event rates; unplanned hospitalizations; ED utilization; mortality	Monitored for model evaluation; not directly tied to individual payment adjustment but informs corrective action

Audit frequency: CMS may conduct comprehensive annual audits of participants and targeted or ad-hoc audits as needed. Participants must submit annual attestations confirming program compliance. Non-compliance triggers a graduated remediation ladder: participant education → corrective action plan (CAP) → withholding or denial of model payments → termination. CMS reserves the right to terminate a participant at any time for poor performance, program integrity concerns, or non-compliance.

Model Timeline

Milestone	Date
RFA application deadline	July 25, 2025
Model implementation date	January 1, 2026
Prior authorization acceptance begins	January 5, 2026
Dates of service subject to WISeR	On or after January 15, 2026
Provisional Partial Affirmation decision type effective	April 1, 2026
Gold card Exemption Program implementation	July 2026
Operator Guide Version 7.0 (current)	July 24, 2026
End of Agreement Period 1	December 31, 2028
End of Agreement Period 2 / Model close	December 31, 2031

CMS has reserved the right to add additional participants, geographic regions, and/or service categories in future performance years based on applicant volume and newly identified FWA-vulnerable services. The model's evaluation results will be used to assess whether WISeR meets Section 1115A statutory requirements for national expansion — making the 2026–2031 performance period a consequential policy test with direct implications for how prior authorization functions across all of Original Medicare.

Wasteful and Inappropriate Service Reduction Model (WISeR)

Model Summary