Social Security & Medicare · Report · File No. 261110-774
Records show Medicare warned AI contractors of backlogs and denials within weeks of launch
Letters made public in a lawsuit show Medicare officials pressed four private companies over delays and denials in a pilot that could pay them from savings. The Dec. 11 spending deadline may be Congress's next chance to act.
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Letters from the Medicare agency to private companies running a new pilot program show regulators warning them about backlogs, missing paperwork and questionable denials within weeks of the January launch. The letters, sent between January and March, were made public October 27 through a federal public-records lawsuit 1.
The pilot is called WISeR, short for the Wasteful and Inappropriate Service Reduction Model. It requires patients in Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington to get advance approval for more than a dozen procedures under traditional Medicare 1.
What the letters show
On February 6, the Centers for Medicare & Medicaid Services (CMS) told Genzeon, the New Jersey contractor, that "459 cases are awaiting a decision letter," some as old as 23 days. The company was supposed to decide within three days 1.
CMS told Virtix Health, which reviews requests in Washington, on March 17 that it had received multiple provider complaints, including blank or incomplete decision letters 1. Virtix rejected 53% of the 6,096 Washington claims it processed in the first three months of 2026, KUOW reported 2.
From Channel GOPWhitehouse reads Grassley's own words on probing CongressSheldon Whitehouse · 2.4K plays · captioned, with the source named
Ohio's contractor, Innovaccer, drew the sharpest language. CMS wrote on February 20 that its online portal "was still not operational by that date," and warned that missed deadlines would "result in payments being withheld" 1.
Genzeon said it took "full responsibility" and that most causes of its backlog were resolved. The release does not include written replies from Virtix or Innovaccer 1.
Why the pay structure worries critics
The companies were invited to use artificial intelligence tools. They receive "a percentage of the savings directly attributed to their model participation," according to the program's application document 1. The Government Accountability Office (GAO), Congress's watchdog agency, described this as a share of "averted expenses" 1.
CMS says a human clinician must review every denial. A contractor also loses its payment for a case when a patient wins on appeal 1.
The letters do not prove that patients lost medically necessary care, and they do not show how individual patients fared 1. But in an April survey of 16 Washington hospitals, procedures once completed in about two weeks took four to eight weeks just to win approval 1.
Rep. Suzan DelBene, a Washington Democrat, said the records "confirm a rushed rollout that left seniors suffering in pain" 2.
It is past time for Congress to put an end to this dangerous AI experiment.
What happens next
In May, the GAO found the document launching WISeR "effectively transfers decision-making authority for certain Medicare reimbursement claims" to the companies. It also found CMS should have sent it to Congress for review first 1.
In July, the Senate voted 46-50 along party lines against taking up Sen. Ron Wyden's resolution to repeal the program. Earlier, the Republican-led House Appropriations Committee approved a bill barring money for WISeR, but it stalled 1.
The stopgap spending law that passed instead left the program running. It expires December 11, and Democrats take control of both chambers January 3 1.
That matters because the next spending bill could be a way to stop the program before the new Congress arrives. The stakes could grow, since CMS has said it may add companies, regions and services 1.
Newsweek said it asked CMS and the four companies for comment and would update its story with any response 1.
The Record
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Sources
- Newsweek, “AI Companies Stand to Gain From Medicare Savings as Patients Fear Care Cuts” (2026-11-10). newsweek.com/ai-companies-stand-to-gain-from-medicare-saving
- KUOW, “Records show confusion, finger-pointing during AI Medicare rollout” (2026-10-27). kuow.org/health-care/2026-10-27/records-show-confusion-finge
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