Concern across the medical community about the use of AI to review claims and requests for prior authorization is mounting as the Centers for Medicare & Medicaid Services (CMS) prepares to launch a new prior authorization initiative in Original Medicare that would allow third parties to use AI to review authorization requests for a select set of services that CMS says are vulnerable to fraud, waste and abuse, such as skin and tissue substitutes, electrical nerve stimulator implants, and arthroscopy for knee osteoarthritis.
The initiative, called the , will launch in six states: NJ, OH, OK, TX, AZ and WA. Physicians and suppliers would not be required to submit a request for prior authorization for selected services, but their claims would then be subject to post-service/pre-payment medical review.
Primary among concerns with the initiative is that model participants will be companies “with expertise providing recommendations on medical necessity of coverage for payers using enhanced technology like AI.” Participating companies will be paid based on services denied, although CMS says that payments to companies will be adjusted based on the “participant’s performance on measures related to the process, including provider experience.”
Relatedly, beginning Dec. 15, 2025, CMS will start a five-year prior authorization demonstration for certain services provided in ambulatory surgical centers in CA, FL, TX, AZ, OH, TN, PA, MD, GA and NY. The service categories targeted by the demonstration are blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation procedures. Learn more .