(Reprinted from HEALTH CARE un-covered)

Earlier this year, the Center for Medicare and Medicaid Innovation (CMMI) announced plans to begin the Wasteful and Inappropriate Service Reduction (WISeR) Model in 2026. The model will retain private companies currently using AI to process prior authorizations in the private Medicare Advantage (MA) program to use those processes in the traditional Medicare (TM) program on services that will newly require prior authorization or pre-payment review.

As we previously published in HEALTH CARE un-covered, the WISeR model is more than just some small administrative update. The new model dramatically shifts how traditional Medicare patients will access care. Under this demonstration program, the Centers for Medicare and Medicaid Services (CMS) will let private, for-profit contractors and their AI tools decide whether seniors get treatments their doctors recommend – and those contractors will be paid based on how much care they deny.

After months of speculation and anticipation, CMS this week announced the private companies selected to participate in the model beginning January 1, 2026. The six companies selected are Cohere Health, Inc., Genzeon Corporation, Humata Health, Inc., Innovaccer Inc., Virtix Health LLC, and Zyter Inc.. Those six companies now have the ability to decide if seniors or people with disabilities in traditional Medicare get the care recommended by their doctors for 17 medical procedures that previously did not require prior authorization. This is a lot of trust to put in private companies, so we dug more into the ones chosen by CMMI to participate in the model.

We previously described how insurers and affiliated venture capital firms use their influence and leverage to “self- deal," in effect creating opportunities to boost their profits. The WISeR program and the participants selected appear to follow the same playbook.

Most of the companies CMS selected are backed by insurer-linked venture funds or staffed by former insurance industry executives, including from Elevance, Optum, Kaiser, Highmark, and HCSC. For example, Humata Health lists four venture capital firms backed by insurance companies as key investors: Blue Venture Fund (backed by Blue Cross Blue Shield), Optum Ventures (backed by UnitedHealth Group), LRV Health (backed by over 30 health systems and insurers), and Highmark Ventures (backed by Blue Cross Blue Shield insurer Highmark Health). These concerning ties are replicated in other model participants including Cohere Health, which is funded through venture capital and contract ties to Humana, and Innovaccer, which is funded by Kaiser Permanente and Banner.

Several already operate in Medicare Advantage, in which private insurers routinely use prior authorization to delay or deny coverage for needed care. Between the lines: WISeR effectively imports the same harmful machinery into traditional Medicare for the first time in the program’s history. Amplifying this concern is that several are pure technology companies without any medical oversight or leadership. This raises serious questions about how they will comply with state and federal regulations requiring licensed clinical personnel to oversee utilization decisions (for good reason).

Precious little is known about other participants. The website of one of the participants, Virtix Health, doesn’t disclose any executives or board members. It doesn’t even list a physical address or phone number, and the last time the company uploaded a news story was in 2021. These are hardly things that inspire the public’s confidence about its legitimacy, let alone entrusting it to oversee the care of Medicare beneficiaries.

What is known about Virtix Health is that it offers risk adjustment coding services, such as chart reviews, to MA plans. These chart reviews are used by MA insurers to add medical codes to an enrollee’s chart, making them appear sicker than they are in order to receive a higher payment from the government. Overpayments, driven largely by coding intensity, means MA plans will be paid $84 billion more than traditional Medicare in 2025; cumulative overpayments between 2025-2034 could reach $1.2 trillion. CMS Administrator Mehmet Oz pledged in his confirmation hearing to go after excessive coding by insurers, which is at odds with his agency giving a contract for the WISeR model to a company that enables this practice as its main line of business.

All this begs the question: How were these companies chosen? It’s an important one, especially given the strong ties between current and past leadership at CMMI and the health insurance and venture capital industries that will profit from this program. We have previously called for the disclosure of financial conflicts of interest in the selection of vendors by health insurers (and in this case CMS, which controls billions of our tax dollars), including any underlying financial relationships with the vendor and/or related investors. CMMI has not disclosed whether or how they managed these potential conflicts of interest in the selection process. The American public deserves to know.

A coalition of lawmakers have introduced the Seniors Deserve SMARTER Care Act to stop WISeR before it launches. The lawmakers warn that the model “creates a dangerous incentive to put profits ahead of patients’ health” — and they’re right.

At the same time, public confidence in insurers’ use of AI has cratered amid lawsuits and reports of algorithms overriding physicians’ judgment. Even President Trump has blasted insurers as “BIG,”“BAD,” and “money-sucking.” Yet WISeR hands many of these same corporate players a new federal revenue stream — and unprecedented authority over seniors’ care in traditional Medicare, which has historically been a safe haven from Big Insurance meddling in coverage.

But now, with CMS barreling toward a January 2026 launch, we know, for the first time, exactly which companies will have that power.

Editor's Note: Virtix Health is the company selected by CMS to determine prior authorization In Washington State.