The House has gone home until after midterms, and the Senate has one foot out the door. In the meantime, let’s take a spin around the Beltway and see what’s percolating with the administration’s healthcare policies.
We’ll start with the Wasteful and Inappropriate Service Reduction (WISeR) model: Medicare’s artificial intelligence- (AI)-driven prior authorization pilot, which is coming up on its one-year anniversary.
We’ve seen reporting over the past year on the WISeR model – most of it from the point of view of the provider, none of it good (see Fierce Healthcare, Center for Medicare Advocacy, WaPo) – but last week was the first time we were able to read internal Centers for Medicare & Medicaid Services (CMS) documents on WISeR’s implementation in the first quarter of 2026.
The internal documents were published by the nonprofit group the Electronic Frontier Foundation (EFF). EFF was given the materials as part of a Freedom of Information Act (FOIA) lawsuit, and according to EFF, the documents confirm what some providers had been saying throughout 2026: instead of speeding up prior authorizations, the technology faced widespread operational problems during its launch and appeared to cause “lengthy treatment delays” in patient care. Newsweek, STAT, and Fierce Healthcare all covered EFF’s findings.
Also last week, we heard more news on the 80-hour-a-month Medicaid work requirements, which take effect this January: recall that, in its June 2026 rule implementing the work requirement, CMS said that only beneficiaries who were too medically frail to work could be exempted from the requirement. There was an immediate reaction from providers on how CMS defined “medically frail,” which opponents said would result in administrative difficulties for beneficiaries, providers, and the states.
Last week, CMS provided guidance on the 80-hour requirement by showing an example of how states might identify beneficiaries as medically frail through a tiered system.
At about the same time CMS released the guidance, a lawsuit on the 80-hour requirement was filed by five Medicaid beneficiaries and a group of provider organizations.
The suit argues that the medically frail definition is too narrow, and that the requirement would force providers to make determinations that fall outside the scope of the usual patient-provider relationship. Earlier this summer, 25 states also filed suit against the rule, saying it dramatically narrowed the exclusions established by Congress in the One Big Beautiful Bill Act (OBBBA).
In contrast, a handful of GOP-controlled states are imposing tougher requirements around the medically frail exception than the June rule imposed. In the rule, CMS allows beneficiaries to self-attest to the medically frailty exception in the first year, with supporting documentation required in 2028. However, at least six states are requiring beneficiaries to provide documentation demonstrating their medical frailty in 2027; that is, the first year of the work requirement.
Finally, last week, Zelis’s Cate Brantley reported on some of the tensions in healthcare AI policy, particularly between the states and the federal government.
Cate noted how the administration is broadly enthusiastic about AI, with the U.S. Department of Health and Human Services (HHS) actively pursuing reimbursement models built around it, including the WISeR model and the ACCESS model Cate reported on last week.
Last week, healthcare AI policy seemed to come head-to-head with an even more contentious healthcare policy issue: affordability.
CMS Administrator Dr. Mehmet Oz made news when he said that AI is likely to make healthcare more expensive in the short term. At a conference last week, Dr. Oz talked about how AI is “turbocharging the ability of the current billing systems to work more effectively.” But, in so doing, in the near term, “AI is going to be inflationary,” he said.
The Administrator’s comments came out at about the same time the Blue Cross Blue Shield Association released an analysis alleging that AI coding tools have likely added around $1 billion in healthcare costs between 2023 and 2025.
We’ve finished circling the Beltway for today, and talking healthcare policy.
Even when Congress leaves town, there’s still a lot of traffic on both.
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