The Centers for Medicare & Medicaid Services (CMS) will launch a five-year prior authorization (PA) demonstration project on December 15, 2025, targeting certain services performed in ambulatory surgical centers (ASCs). The project is part of the Trump Administration’s efforts to reform Medicare’s PA framework, with the stated goals of improving oversight and reducing exposure to fraud, waste, and abuse.
Under this initiative, participating ASCs in Arizona, California, Florida, Georgia, Maryland, New York, Ohio, Pennsylvania, Tennessee, and Texas will be required to submit a PA request (PAR) to their Medicare Administrative Contractor (MAC) before performing any of the following five categories of procedures identified as high risk for cosmetic, rather than medically necessary, use: blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation. These procedures, when performed in hospital outpatient settings, are subject to PA under the Hospital Outpatient Prospective Payment System (OPPS). Following the OPPS PA implementation in 2020, CMS observed a shift in utilization from hospital outpatient departments to ASCs, leading to the new demonstration project to ensure consistent oversight across care settings.
Overview and Scope
While participation in the PA demonstration project is voluntary, ASCs that opt out will have applicable claims subjected to prepayment medical review, which is likely to increase administrative burden and delay reimbursement. Participating ASCs will need to submit a PAR to their MAC before performing a covered service.
CMS emphasizes that this initiative does not modify existing Medicare coverage or introduce new documentation requirements but formalizes the review of medical necessity earlier in the claims process (i.e., prior to payment) to help reduce denials and streamline appeals. CMS relies on Section 1862(a)(1)(A) of the Social Security Act to require services to be “reasonable and necessary” for diagnosis or treatment and on Section 1862(a)(10) to exclude cosmetic procedures that do not improve the function of a malformed body part.
MACs will lead provider education efforts, offering guidance and support on the operational requirements of the demonstration project. CMS will supplement the MAC activities through written communications, online resources, and periodic updates. Additionally, training sessions will be made available to help providers navigate the new requirements and facilitate compliance.
Covered Services and Applicable Codes
The demonstration project applies to specific procedures identified by CPT and HCPCS codes, including:
- Blepharoplasty, Blepharoptosis Repair, Brow Ptosis Repair: CPT codes 15820, 15821, 15822, 15823, 67900–67904, 67906, 67908.
- Botulinum Toxin Injections: CPT codes 64612, 64615; HCPCS codes J0585–J0589 (when paired with injection codes).
- Panniculectomy, Excision of Excess Skin/Subcutaneous Tissue (including Lipectomy): CPT codes 15830, 15847, 15877.
- Rhinoplasty and Related Services: CPT codes 20912, 21210, 30400, 30410, 30420, 30430, 30435, 30450, 30460, 30462, 30465, 30520.
- Vein Ablation and Related Services: CPT codes 36473–36476, 36478, 36479, 36482, 36483.
The full list of applicable codes and code descriptors is available in CMS’s “List of ASC Services for Prior Authorization.”
Submission and Review Process
To avoid a claim being subjected to prepayment review, ASCs or their designated third-party requesters should submit the PAR before a covered service is provided to the Medicare beneficiary and before the claim is submitted for processing. The PAR will not be accepted after the service has been completed.
Each PAR must include beneficiary and provider information, relevant procedure codes, and detailed documentation supporting medical necessity for each service requiring PA under the demonstration project. This includes clinical notes (i.e., detailing how the condition interferes with daily activities), diagnostic tests, photographs, and evidence of more-conservative treatments that failed.
Procedure-specific documentation should not only substantiate medical necessity but also clearly differentiate clinically required treatments from those performed for cosmetic purposes. For example:
- Blepharoplasty (eyelid surgery) may be considered cosmetic when performed to improve appearance or reduce signs of aging. However, it is deemed medically necessary when excess eyelid tissue obstructs the patient’s vision. CMS requires documentation such as photographs and visual field testing showing a 30% or greater loss in the superior field of vision to support coverage.
- Botulinum toxin (Botox) injections are often used cosmetically to reduce wrinkles or enhance facial aesthetics. For Medicare coverage, they must be tied to a medically necessary purpose, such as treatment for chronic migraine, cervical dystonia, or spasticity. Documentation must include the covered diagnosis, dosage, injection sites, and evidence of prior treatment effectiveness.
- Panniculectomy can be cosmetic when performed to improve body contour after weight loss. It is considered medically necessary when the pannus causes chronic skin conditions (e.g., intertrigo), hygiene issues, or functional limitations. Required documentation includes evidence of stable weight loss, body mass index, chronic skin conditions, and failed conservative therapies such as topical treatments or hygiene measures.
- Rhinoplasty is frequently performed for the aesthetic enhancement of nasal shape. CMS considers it medically necessary only when there is documented nasal obstruction, trauma, or congenital deformity. Supporting materials must include imaging and evidence that nonsurgical management (e.g., nasal sprays, CPAP adjustments) was unsuccessful.
- Vein ablation may be cosmetic when used to eliminate visible varicose or spider veins for appearance. It qualifies as medically necessary when there is venous reflux causing pain, swelling, or skin changes. Required documentation includes duplex ultrasound results, photographs of affected areas, and records of failed conservative treatments such as compression therapy.
Under this demonstration project, MACs are required to review the PAR and issue a determination of provisional affirmation, non-affirmation, or partial affirmation within seven calendar days of receipt. Expedited review should be available if delays could jeopardize the beneficiary’s health, with decisions issued within two business days. If a PAR is not affirmed, providers may resubmit PARs as many times as needed, with each resubmission reviewed within the same seven-day timeframe.
The MAC decision letter will include a Unique Tracking Number (UTN), which should be referenced on claims. Claims submitted without a UTN may be denied or subjected to additional review, and providers retain full appeal rights under Medicare’s standard adjudication process.
Potential Model Overlap and Additional Scrutiny
Notably, the PA demonstration project will run concurrently with a potentially overlapping CMS initiative, the Wasteful and Inappropriate Service Reduction (WISeR) Model. The WISeR Model is a six-year pilot, starting January 1, 2026, in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. WISeR will test the use of advanced technologies, including artificial intelligence and machine learning, to streamline PA and prepayment review for certain services in traditional Medicare.
The model highlights CMS’s growing scrutiny of outpatient surgical settings by targeting 17 services that CMS has identified as potentially vulnerable to overuse and improper billing, including several procedures commonly performed in ASCs, such as arthroscopic knee procedures, epidural steroid injections, percutaneous vertebral augmentation (i.e., vertebroplasty and kyphoplasty), lumbar decompression procedures, and skin substitute applications. ASCs in states subject to both initiatives – Arizona, Ohio, and Texas – could have multiple PA requirements to manage and comply with.
Next Steps for Compliance
ASCs in demonstration states should begin reviewing their scheduling, documentation, and billing processes to ensure compliance with the new requirements. Coordination with referring providers and billing partners will be essential to avoid claim denials and payment delays. Providers should take steps to stay informed of developments, review guidance materials and timelines, and make sure internal operations are prepared for participation in the PA demonstration project and, if applicable, the WISeR Model.
Our Health Care Team is actively monitoring the rollout of the PA demonstration project and WISeR Model and will continue to track CMS and MAC communications for updates or changes.
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