AICoin AI: Medicare Launches Prior Authorization Pilot in Six States to Combat Fraud and Waste

The Centers for Medicare & Medicaid Services (CMS) is rolling out a prior authorization pilot program for traditional Medicare beneficiaries in six states—New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington—starting January 1. The program focuses on over a dozen services, including skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy, aiming to reduce fraud and unnecessary spending.

Private contractors will use advanced technologies, such as artificial intelligence, to conduct reviews. Emergency and in-patient services are exempt, along with treatments where delays could jeopardize patient health. This initiative mirrors practices already in place in Medicare Advantage, where prior authorization has faced criticism for causing care delays.

The decision is driven by cost concerns. A recent New York Times investigation revealed excessive Medicare billing for niche products like placental tissue bandages. While the Biden administration inherited this plan, its implementation is now under scrutiny as stakeholders balance efficiency against patient access.