Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.
Medicare is undergoing unprecedented changes beginning in 2026. There are already changes planned nationwide. Additionally, six states are pilots for new programs, raising serious questions. What are these changes, and will your state be affected?
Original Medicare and Its Key Features
Original Medicare is comprised of Part A (hospital insurance) and Part B (medical insurance). It allows beneficiaries to see any provider or hospital that accepts Medicare (and almost all do). One of the major benefits of Original Medicare is that there are no networks required.
Additionally, there is no pre-authorization requirement. This means that beneficiaries can access services without prior approval. This is in stark contrast with Medicare Advantage, which often requires pre-authorization.
However, there have been pressure to cut costs. CMS is aiming to reduce wasteful or unnecessary services, estimated to cost billions annually. And preauthorization may be a way to do so…but at what cost?
The WISeR Model (Wasteful and Inappropriate Service Reduction)
The WISeR model (Wasteful and Inappropriate Service Reduction) is set to launch January 1, 2026. This is a pilot program that will operate in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. Its aim is to reduce unnecessary services and Medicare spending. It will attempt to do so by expanding pre-authorization to certain services such as skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy for osteoarthritis.
It will also utilize AI-supported review for the eligibility of these procedures. However, at this time, physicians will still make the final decisions—no automatic denials! Private firms will then be contracted to reduce wasteful services and paid based on savings
There are several concerns surrounding this program. For example, critics argue this could lead to the potential erosion of original Medicare’s simplicity. AI could also generate higher denial rates (up to 16x normal!). Additionally, these incentives tied to cost reduction could delay necessary care. And it’s possible this would out additional stress on the healthcare workforce
The TEAM Model (Transforming Episode Accountability Model)
The TEAM model (Transforming Episode Accountability Model) is also set to launch January 1, 2026. This program will launch nationwide. BUT, its focus is on surgical episodes rather than pre-authorization. As of right now, it will target specific procedures such as joint replacements, hip fracture repairs, spinal fusion, coronary artery bypass graft, and major bowel surgery. Of course, that may change in the future.
Hospitals must coordinate care from surgery through 30 days post-discharge. CMS will set target prices for these surgical episodes. Hospitals will then be rewarded for lower costs and penalized for exceeding costs, based on quality performance
This may be a difficult transition, but there will be a gradual implementation. On track 1, hospitals will incur no risk. Tracks 2 & 3 will introduce risk slowly, especially for safety-net and rural hospitals
The goal of this program is to improve the post-surgical patient experience by promoting primary care referrals and reducing readmissions. Hospitals will need to improve their care coordination.
In many ways, this sounds good for patients and pocketbooks, but with any changes, there are always concerns. For example, clinics may cut corners to meet targets, particularly in rural areas.
Implications for Beneficiaries
There are many potential benefits of these programs. Many would consider these a smarter use of Medicare resources and a way to cut costs without necessarily cutting care. TEAM would also promote better coordination in surgical care for beneficiaries.
But the implementation of these programs is not without risks. There could be more delays or denials under WISER. Hospitals may also be rushed to meet targets under TEAM. And there are certainly concerns and questions about AI decisions and real-world outcomes.
Looking Ahead
WISER is currently set to launch in six states, but it may expand in the future. TEAM, on the other hand, will be a nationwide rollout, and the outcomes will determine the success and future of the program.
CMS and Congress will monitor the programs’ performance and address issues if beneficiaries are negatively impacted. But in the meantime, missteps could lead to delays, denials, and challenges for seniors. So, beneficiaries should stay informed and engaged.
