Documents Reveal Early Problems in Medicare’s AI-Based Coverage Review Trial

A senior Trump administration official has recently conceded that the program has run into trouble, though the administration has not indicated it plans to end it.

A federal initiative designed to test whether artificial intelligence and related tools can help Medicare curb unnecessary spending encountered difficulties after a hurried launch, according to Freedom of Information Act records released by the Electronic Frontier Foundation.

Since the start of the year, technology companies in six states have been using AI to assist human clinicians in deciding whether Medicare will pay for certain services under the CMS program known as the WISeR model. Among the services reviewed have been skin substitutes and electrical nerve stimulator implants.

Hospital associations and lawmakers have argued that the effort can slow care for older adults and add more paperwork for providers.

Still, the Centers for Medicare and Medicaid Services itself flagged concerns with WISeR, sending four of the program’s six vendors notices about problems earlier in the year, according to the newly released records.

Three vendors — Genzeon Corporation, Virtix Health and Zyter — received information requests from CMS describing issues such as slow coverage decisions and questionable denials. Innovaccer, the fourth company, was sent two requests for corrective action plans, which asked for detailed steps to fix the problems, the documents show.

“These newly released documents show that the WISeR rollout was rushed and rocky from the start, highlighting the dangers that arise when governments treat AI like a silver bullet for complex problems,” the EFF wrote in a Tuesday blog post about the records.

Companies respond to CMS concerns

CMS sent Genzeon Corporation, the WISeR vendor for New Jersey, a Feb. 6 request for information that cited a backlog of coverage determinations as of Jan. 27 and the accidental creation of duplicate unique tracking numbers for cases. In a Feb. 13 reply, the company said it had already taken corrective steps and had more fixes underway.

Medical providers complained to CMS that Virtix Health, the WISeR vendor for Washington, issued slow Medicare decisions, questionable denials and blank determination letters, according to a March 17 CMS letter.

Virtix acknowledged the concerns, but said “the majority of requests requiring clarification involved provider misunderstanding” of the WISeR model, according to a March 24 response letter. The company said that misunderstanding had “improved meaningfully over time,” in part because of active provider education efforts.

Virtix told Nextgov/FCW that those education efforts helped boost results: “63.7% of requests are affirmed during individual reviews, the affirmation rate increases to 84.3% after providers have the opportunity to resubmit with improved documentation.”

CMS required Virtix to submit a corrective action plan after the company failed to meet the 72-hour turnaround time for approvals, NPR affiliate KUOW reported in June. The outlet said it was unclear when the corrective action request was issued, but CMS has said the turnaround problem has since been fixed.

Virtix told Nextgov/FCW that the corrective action plan was closed on Aug. 14 and that since the first quarter it has cut the average prior authorization turnaround time to 1.18 days and prepayment review time to 1.17 days.

CMS told Zyter, the WISeR vendor for Arizona, in a Feb. 27 letter that it had received reports the company was not sending determination letters in a timely manner and may not have had strong enough processes for escalating provider concerns.

Zyter said the difficulties stemmed from the “accelerated implementation timeframe and compressed onboarding timeline” for its role in WISeR, according to a March 5 response letter. CMS launched the model less than six months after announcing it.

That March 5 letter also outlined the actions Zyter took to address the issues and additional steps planned going forward.

Zyter CEO Sundar Subramanian told Nextgov/FCW that the company “promptly addressed” early implementation concerns with CMS.

He added that Zyter’s provider portal “has been operating successfully for more than six months, with authorization determinations routinely processed within minutes or near real time, and timely issuance of determination letters to providers and beneficiaries.”

Innovaccer, the WISeR vendor for Ohio, received a Jan. 7 CMS request for a corrective action plan after regulators said its early rollout did not meet program rules, including the requirement to respond to providers electronically.

In a Jan. 16 letter, the company said it was complying with all requirements except the one calling for a secure electronic portal for coverage pre-approval submissions. Innovaccer said it had warned CMS in letters sent in October and December that the portal would not be ready by the model’s launch.

CMS sent Innovaccer a second corrective action plan request on Feb. 20 after determining the company had not met the terms of its first plan. In that follow-up, CMS said the provider portal Innovaccer had promised to improve was still not fully functional by a Feb. 5 deadline. Innovaccer replied on Feb. 27, saying it believed it was meeting WISeR requirements and asked to meet with CMS.

Innovaccer’s provider portal is now “fully live,” the company told STAT in September, though it did not say when the portal went online.

Genzeon Corporation, Innovaccer and CMS did not respond to requests for comment by publication time.

The letters released this week add to the early WISeR problems previously disclosed in FOIA records the EFF released in September.

“I HAVE HAD TO WATCH 3 PATIENTS CRY AT BEDSIDE FOR NOT HEARING BACK ON THEIR PRIOR AUTH FOR KYPHOPLASTY/VERTABRAL AUGMENTIATION [sic] PROCEDURE. THESE PATIENTS ARE IN DEEP PAIN,” one Ohio-based provider wrote in a March feedback survey released by the EFF.

Ongoing scrutiny

Lawmakers and hospital groups continue to scrutinize the WISeR model.

The House Appropriations Committee advanced a bipartisan amendment that would withhold funding for WISeR and other pilots that test coverage determinations in traditional Medicare.

Despite the criticism, the Trump administration has not said it will shut down the model.

“There are a lot of things about WISeR that are not working,” Kimberly Brandt, CMS deputy administrator, said at a conference last month.

In response to a question from someone in the audience, Brandt said, “I don't have an answer for you in terms of what's going to fix it.”

She added that “there are a lot of things that [the CMS Innovation Center, which oversees the WISeR model, is] trying to fix on this, and especially because of the congressional scrutiny on this, they are committed to trying to get that right and get it better.”

Separately, Senator Elizabeth Warren, D-Mass., wrote that documents suggest CMS intends to broaden the WISeR model to additional services, including oncology care and cardiac catheterization.

Chris Klomp, then a nominee for Health and Human Services deputy secretary, did not confirm those expansion plans in reply to Warren’s question.

He did say CMS is tracking the pilot’s processing time, provider burden, beneficiary experience, access, clinical quality and savings in response to another senator’s question.

“Decision[s] about changes to the model would be based on such experiences and findings,” Klomp wrote.