<<< EMBIT NEWSLETTER >>>
The Centers for Medicare & Medicaid Services (CMS) has officially postponed and restructured the launch of its prior authorization demonstration for select procedures performed in ambulatory surgical centers (ASCs). Originally scheduled for December 1, 2025, the program will now begin in two phases, starting in January and February of 2026.
For physicians, medical groups, and healthcare billing teams, this delay offers more preparation time, but it also introduces new requirements that will directly influence workflow, reimbursement, and compliance efforts.
> Two-Phase Rollout: Updated Start Dates
Instead of a nationwide launch, CMS will roll out the demonstration gradually.
› Phase 1 — Begins January 2026
Providers in the following states may submit Prior Authorization Requests (PARs) starting January 5, 2026, for services dated on or after January 19, 2026:
- › California
- › Florida
- › Tennessee
- › Pennsylvania
- › Maryland
- › Georgia
- › New York
› Phase 2 — Begins February 2026
Providers in these states may submit PARs beginning February 2, 2026, for dates of service on or after February 16, 2026:
- › Texas
- › Arizona
- › Ohio
This staggered approach allows CMS to monitor the demonstration more closely while allowing providers additional time to adjust documentation and medical billing workflows.
> Targeted Procedures Requiring Review
The demonstration focuses on five services that have seen significant increases in ASC utilization:
Because these procedures can be either medically necessary or cosmetic, CMS aims to ensure Medicare claims reflect accurate clinical need.
> Why CMS Is Implementing the Demonstration
› Medical Necessity Oversight
These services are sometimes performed for cosmetic reasons, which Medicare does not cover. Prior authorization enables CMS to verify eligibility before services are rendered.
› Fraud Prevention
Increased documentation requirements and pre-service review allow CMS to spot improper billing patterns earlier.
> Is Participation Mandatory?
No. Participation is voluntary.
This can lead to:
- › Delayed reimbursement
- › Increased administrative burden
- › Potential denials if documentation is incomplete
> How Prior Authorization Will Work
› ASCs can submit PARs through:
- › Novitasphere (JH or JL)
- › Fax
- › Electronic submission of medical documentation (esMD)
› Review timelines include:
- › Initial request: 7 calendar days
- › Expedited request: 2 business days
- › Resubmission: 7 calendar days
> Documentation Expectations
- › Meet a valid Medicare benefit category
- › Be reasonable and necessary for diagnosis or treatment
- › Comply with Medicare statutory requirements
> How ASCs Can Prepare Now
- › Train staff on new timelines and documentation requirements
- › Update workflows to include prior authorization checks
- › Review historical claims for targeted procedures
- › Ensure documentation accuracy
- › Leverage specialized billing support
> Conclusion
CMS’s phased ASC prior authorization demonstration gives providers more time to adapt, but documentation and workflow improvements will remain critical.
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