Investigations

Virtix denied more Washington Medicare prior authorizations than approvals

The WISeR pilot pays vendors up to 25 percent of any savings from denials.

In Washington state, Michael Edgerly waited seven weeks for a steroid injection after a Medicare prior authorization came back denied. More Perfect Union traced the vendor behind the letter to a Texas firm whose public records tie it to CorroHealth, private equity, and offices in Chennai.

Edgerly, a Vietnam veteran with peripheral neuropathy and severe back pain, sought the shot in early 2026 after surgeries failed to control his pain. Medicare sent a denial that listed prior authorization and the phrase non-affirmed, a gate that until this year rarely applied to traditional Medicare.

The denial came through WISeR, a six-state pilot the Centers for Medicare and Medicaid Services launched in January to expand prior authorization on about a dozen high-cost procedures. Contractors use artificial intelligence on the reviews and can collect up to 25 percent of documented savings.

Researcher Zena Wolf, who has studied the program, said Medicare outsourced the prior authorization work rather than running it in-house. In the first three months, two vendors non-approved nearly 6,000 requests, and Washington providers reported more denials than approvals. Edgerly's clinic said submissions at one point drew 100 percent denials before his doctor resubmitted and won approval.

Virtix Health, registered in Texas, handled Edgerly's case with an AI model. Reporters pulled Arizona corporate filings that listed Virtix under MES Holdings, a parent dissolved in 2025, then followed Texas registrations naming Coding Solutions Acquisition II as the organizer. Patents and trademarks pointed to Coding Solutions Topco and Virtix Health Software Solutions Private Limited in Chennai.

A Chennai electricity bill for the Indian unit led reporters to Thyagaraya Nagar, where CorroHealth maintains two offices a short distance from the Virtix address on paper. Indian filings show three of Virtix India's four directors also sat on CorroHealth India's board, and Virtix lists CorroHealth's Texas headquarters as its mailing address. CorroHealth's Indian subsidiary reported about $130 million in annual revenue before WISeR launched.

CorroHealth sells revenue cycle services on both sides of billing fights between providers and payers, including coding work staffed heavily overseas. Patient Square Capital and the Carlyle Group sit at the top of the ownership chain the reporters reconstructed from state and foreign filings. Virtix, CorroHealth, Patient Square Capital, and the Carlyle Group did not answer repeated questions about their AI tools, India operations, or incentives tied to denials.

In May, the Government Accountability Office reported that CMS should have submitted WISeR to Congress and had not. Senate Democrats tried to end the pilot on that basis and failed on party lines. More than 60 House and Senate members later asked the administration to stop or explain the program, and lawmakers attached an appropriations amendment in a closed meeting that would cut support for the model.

Wolf said providers in all six pilot states report harm and delays while auditors, not prior authorization, catch the fraud schemes CMS cited when it rolled out WISeR the same day it tightened rules on skin substitutes. Edgerly's doctor wanted a spinal stimulator after a trial eased his pain, but the device sits on the WISeR list, so the couple routed the request through the Department of Veterans Affairs instead. The VA approved the implant in days and scheduled surgery for later in 2026.

Source video: I Tracked Down the AI Companies Getting Rich Denying Your Healthcare