The Centers for Medicare & Medicaid Services (CMS) has required Virtix Health, the private contractor operating the Wasteful and Inappropriate Service Reduction (WISeR) Model in Washington, to submit a corrective action plan after finding that the company failed to meet required 72-hour turnaround times for prior authorization and prepayment determinations. The enforcement action is an early test of CMS's ability to oversee private companies using AI-assisted tools in consequential Medicare reviews.
As we previously examined in this video, WISeR is a new Medicare Innovation Center model that will use technology companies, including tools such as AI and machine learning, together with clinician review, to evaluate whether certain items and services meet existing Medicare coverage, coding, and payment rules. The model, which launched on January 1, 2026, in six states, faced immediate attention and concern around operational and reimbursement consequences for ambulatory surgery centers (ASCs) and other healthcare providers. As WISeR continues to attract the attention of legislatures and CMS, healthcare entities should focus on documentation and strengthening workflows on Medicare-related spending.
The delays have intensified scrutiny of both WISeR’s AI-assisted review process and the financial incentives built into the model. CMS states that participants receive a percentage of the Medicare spending saved when their reviews prevent care deemed wasteful or inappropriate, with that percentage adjusted based on performance measures, including provider experience. Critics contend that this structure could create an incentive to recommend nonpayment. CMS, however, emphasizes that appropriately licensed clinicians must make all nonpayment recommendations using standardized, transparent, and evidence-based procedures.
Beyond CMS’s enforcement action, WISeR has faced broader criticism over its early implementation. Less than a year into the pilot, practices and providers report malfunctioning online portals and communication breakdowns among providers, technology vendors, and Medicare contractors. Physicians reportedly described a more complex authorization process, including delays and difficulty obtaining approval for care they believed met Medicare coverage guidelines, leading to an ultimate concern of whether those burdens could cause them to stop offering certain treatments.
These calls for action do not go unheard. On July 16, Washington’s two U.S. senators joined a Democratic-led effort to advance a resolution that would have overturned CMS’s implementation of WISeR. The Senate rejected the motion to proceed by a 46-50 vote. That result prevented the Senate from taking up the resolution and leaves WISeR in place. Still, the already apparent political opposition, along with separate congressional requests for information about denials, appeals, and vendor performance, signals that scrutiny of the model’s use of AI, financial incentives, and effects on access to care is likely to not only persist, but intensify.
The enforcement action also highlights a broader tension in CMS’s growing reliance on AI. WISeR is premised on the idea that private technology companies can use AI and machine learning to make Medicare reviews faster, more accurate, and less burdensome. Yet one of the first companies selected to carry out that work has already faced corrective action for failing to satisfy basic timeliness requirements. Although CMS’s findings concerned Virtix’s operational performance rather than the accuracy of its AI tools, the action demonstrates that adopting advanced technology does not eliminate the need for effective staffing, functional systems, human oversight, and rigorous vendor accountability. AI may accelerate parts of the review process, but it cannot compensate for weaknesses in the operations surrounding it.
For ASCs in WISeR states, the enforcement action reinforces that the model is not merely a change in billing procedure, but a signal of substantial operational shifts. ASCs should track turnaround times, denials, payment delays, and portal or communication problems, preserve records of those issues, and escalate missed deadlines promptly. For higher-dollar procedures, ASCs may also want to evaluate the potential cash-flow impact of delayed payment.
ASCs outside the six current WISeR states should continue monitoring the model. CMS has described WISeR as a potential roadmap for incorporating private-sector technology into its operations, and the model’s early performance is a foreshadowing of an expansion in AI-assisted review. As the future of WISeR remains unclear, ASCs can work on strengthening documentation, workflow coordination, and delay tracking to prepare for increased technology-enabled scrutiny.
More broadly, physician groups, hospitals, and other healthcare providers should view WISeR as an indicator of CMS’s growing reliance on technology-enabled oversight and review processes. CMS appears committed to exploring greater use of AI and advanced analytics in reimbursement oversight and program integrity efforts, and as those initiatives continue to evolve, providers across the healthcare industry should monitor developments and consider whether their documentation and operational processes are positioned to respond to increased AI-assisted review.
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