Map Shows 6 States Testing New Medicare Model In 2026

Six states will be testing a new model, developed by the Centers for Medicare and Medicaid Services (CMS), for the federal health program Medicare in 2026.

At the end of June, CMS announced the new model, which came as part of the agency's bid to protect both Medicare beneficiaries and federal taxpayers from "unnecessary services, fraud, waste, and abuse."

The states selected to test the new model include New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington—these states did not choose to participate in the model, but were chosen by CMS, Dr Vinay K. Rathi, a professor in the Department of Otolaryngology at the Ohio State University Wexner Medical Center, told Newsweek.

Newsweek has contacted CMS via email for comment and the New Jersey Department of Health by phone, but was unable to get through to a press officer on a number of occasions.

The Texas Department of Health and the Ohio Department of Health referred Newsweek to CMS for comment.

The Arizona Department of Health told Newsweek to speak to the Arizona Health Care Cost Containment System, and when approached for comment, the Arizona Health Care Cost Containment System told Newsweek it was "solely responsible for managing Medicaid in Arizona."

Oklahoma Insurance Commissioner Glen Mulready told Newsweek: "Oklahoma supports efforts to protect Medicare beneficiaries and taxpayer dollars by reducing fraud, waste, and abuse. We are optimistic that CMS's [Wasteful and Inappropriate Service Reduction (WISeR)] model, if implemented with strong provider involvement, can help ensure seniors get the right care at the right time without unnecessary delays."

Tim Smolen, the Washington Office of the Insurance Commissioner's statewide Health Insurance Benefits Advisors (SHIBA) program manager, told Newsweek that "this was a decision of the Medicare Administrative Contractor—Noridian—not Washington State government per se."

"The process is permissive: providers and suppliers in selected geographic regions who intend to furnish an included item or service will have the option to submit that item or service for prior authorization," he added.

Why It Matters

The model is being brought in to reduce "wasteful care, including services that provide little to no clinical benefit," CMS said, which it added not only increases costs, but also puts patients "at risk."

The agency reported that waste in healthcare represents up to 25 percent of healthcare spending in the U.S., with estimates that around $5.8 billion in Medicare spending in 2022 was spent on services with "minimal benefit."

While the aim of the model is to reduce spending by cutting back on "wasteful care," some experts have voiced concern that the model may see necessary treatment being denied, potentially harming health outcomes for Medicare recipients.

What To Know

The model will bring in a prior authorization process relative to Medicare's existing processes, meaning recipients will either have to submit prior authorization requests for selected services or their claim will be subject to pre-payment medical review - but the model does not change Medicare coverage or payment criteria.

Enhanced technologies, including artificial intelligence, will also be used to see if they can speed up prior authorization processes.

The six states picked to participate in the experimentation of this model were likely chosen "because the administrative contractors that process Medicare claims for these states have already developed coverage policies for the services targeted by the WISeR model," Rathi said.

"CMS envisions that the technology firms contracted through WISeR will reference these policies when deciding whether to approve or deny prior authorization requests," he added.

Lauren Nicholas, a health economist and professor in the division of geriatric medicine at the University of Colorado, Denver, also told Newsweek that most of the selected states "score poorly on avoidable cost and use, according to the Commonwealth Fund, and it would make sense to target areas where reductions in inappropriate service use could be made."

While it will just be these selected states testing the model in 2026, Rathi said that CMS has "indicated that it is already considering expanding the WISeR model to additional states, services, and technology firms," although no further details are publicly available at this time.

In terms of the impacts of the model, Rathi said that it "will likely lower spending in the traditional Medicare program for targeted services and deter some fraudulent or medically unnecessary and potentially harmful care."

However, he added that the model could "bring some of the problems of Medicare Advantage to traditional Medicare, such as delays or denials of appropriate care and fueling clinician burnout."

What People Are Saying

Smolen told Newsweek: "The WISeR model will begin on January 1, 2026, and run for two three-year agreement periods, until December 31, 2031. If the provider or supplier receives a non-affirmed decision because the item or service was determined to not be medically necessary, the healthcare provider will be required to notify the beneficiary and issue an Advanced Beneficiary Notice of Non-coverage (ABN) prior to performing the item or service if it is expected that payment would be denied. Beneficiaries will continue to have all applicable administrative appeal rights in Original Medicare."

He added: "This is a relatively limited number of procedures and products, so it's difficult to forecast the impacts on individual Medicare beneficiaries."

Abe Sutton, Director of the CMS Innovation Center, said in a statement: "Low-value services, such as those of focus in WISeR, offer patients minimal benefit and, in some cases, can result in physical harm and psychological stress. They also increase patient costs, while inflating health care spending."

Rathi also told Newsweek: "It is also unclear how the artificial intelligence used by firms will perform. Artificial intelligence can make issuing prior authorization decisions faster and cheaper. But artificial intelligence could make biased or invalid recommendations to human medical reviewers that go undetected."

Nicholas also told Newsweek: "If unnecessary care is correctly identified, recipients would spend less time seeking treatment, potentially pay less out of pocket, and avoid complications associated with healthcare use. The danger is that instead, necessary treatment will be rejected, leaving patients to suffer with untreated symptoms, experience health declines, or pay for expensive care out of pocket."

She added: "Concerns include the fact that contractors will be paid for each denied service, which can make it profitable to deny care that patients need. Some of the procedures like arthroplasty target pain, which is highly subjective and difficult to measure. Creative research strategies will be necessary to assess the impact of this demonstration, especially for patient outcomes."

Mark Pauly, a professor of health care management at Wharton School of the University of Pennsylvania, told Newsweek: "[The model] makes original Medicare more like Medicare Advantage, but in Medicare Advantage you get more benefits from the money saved by managed care."

He added: "This does make publicly-run original Medicare look more like another health plan offered by private firms. Of course, we will have to see whether this really saves money. Based on previous efforts by the Medicare Innovation Center you would predict that it will not do more than chump change, but hope springs eternal. I guess private plans must think they save money from prior authorization policies, though I think that is debatable."

What Happens Next

The six states will be implementing the new model in 2026.