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CMS Prior Authorization Demonstration Project to Begin on December 15

ASCs in 10 states will be impacted

BY KARA NEWBURY | SEPTEMBER 12, 2025

Last week, the Centers for Medicare & Medicaid Services (CMS) announced that it would start a five-year prior authorization demonstration for certain services provided in ASCs beginning December 15, 2025. The demonstration project impacts 10 states: Arizona, California, Florida, Georgia, Maryland, New York, Ohio, Pennsylvania, Tennessee and Texas.

CMS specified 41 codes that will be subject to the demonstration and fall within the following categories: blepharoplasty, botulinum toxin injection, panniculectomy, rhinoplasty and vein ablation procedures.

According to the CMS website, prior authorization helps ASCs “ensure that their services comply with applicable Medicare coverage, coding, and payment rules before services are rendered and before claims are submitted for payment.” The targeted services can potentially be provided as cosmetic procedures, rather than medically necessary procedures, resulting in unnecessary increases in the volume of covered procedures, according to the site.

However, ASCA’s review of the impacted codes found that there were fewer than 100 fee-for-service (FFS) Medicare claims nationwide for 21 of the 41 codes. In fact, five of the codes are packaged, meaning that they receive no separate reimbursement when provided in the ASC setting.

CMS first proposed this demonstration project in February 2024, when it announced that it sought “to develop and implement a Medicare demonstration project, which CMS believes will assist in developing improved procedures for the identification, investigation, and prosecution of Medicare fraud occurring in ambulatory surgical centers providing services to Medicare beneficiaries.” In April 2024, ASCA submitted comments opposing the prior authorization demonstration project for ASCs, stating it could create undue burden for ASCs with no clear benefit to Medicare or its beneficiaries.

According to CMS, prior authorization does not create new clinical documentation requirements. Instead, it requires the same information that is already required to support Medicare payment, just earlier in the process. Prior authorization allows providers to address issues with claims prior to rendering services and submitting claims for payment, which has the potential to reduce appeals for claims that may otherwise be denied.

ASC providers in the impacted states will have to submit documentation to their Medicare Administrative Contractors (MAC) that shows a service meets applicable Medicare coverage, coding and payment rules prior to rendering the service. Providers can submit prior authorization requests beginning on December 1, 2025, for dates of service on or after December 15, 2025.

More information is available in the operational guide and frequently asked questions document released by CMS last week.

Write Kara Newbury at knewbury@ascassociation.org with any questions.