Expansion of Prior Authorization in Ambulatory Surgical Centers under Medicare
The Centers for Medicare & Medicaid Services (CMS) has announced a five-year demonstration project for prior authorization of certain services in Ambulatory Surgical Centers (ASCs), effective from December 2025. The demonstration program covers 10 states: California, Florida, Texas, Arizona, Ohio, Tennessee, Pennsylvania, Maryland, Georgia, and New York.
The aim of this program is to ensure that ambulatory surgical services are medically necessary and to prevent improper payments and fraudulent billing. The services to be included in the prior authorization demonstration are specific services that have shown a significant increase in utilization in the ASC setting and can potentially be provided as cosmetic procedures. These services include blepharoplasty (eyelid surgery), Botulinum toxin injections, panniculectomy (abdominal wall contouring), rhinoplasty (nose repair), and vein ablation procedures (treatment for varicose veins).
Providers can begin submitting prior authorization requests beginning on December 1, 2025. The preauthorization requirement goes into effect for dates of service on or after December 15, 2025. Prior authorization decisions for these services will be sent within seven days for standard review and two business days for expedited review.
It's important to note that prior authorization does not create new clinical documentation requirements, but requires the same information that is already required to support Medicare payment, just earlier in the process. The new demonstration program does not change existing medical necessity or documentation requirements.
The use of prior authorization to identify and reduce improper billing and fraud is expanding in original Medicare. However, the demonstration does not extend to the same level of prior authorization requirements as those for services received in hospital outpatient departments.
In a separate development, six states (New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington) will begin using the Wasteful and Inappropriate Service Reduction (WISeR) Model to perform prior authorization evaluations for 17 services in 2026.
While the details about which 10 US states will participate in a new CMS conditional approval program for certain outpatient surgery services in December 2025, nor do they specify which services are involved, are not yet available, this new initiative by CMS is expected to bring about a significant change in the way ambulatory surgical services are managed and billed under Medicare.
