Medicare Launches Prior Authorization Pilot for Select Services in Six States: What Hospitals Need to Know

Medicare is launching a significant new prior authorization initiative under the CMS Innovation Center’s Wasteful and Inappropriate Service Reduction (WISeR) model. Beginning January 2026, select items and services furnished to Traditional Medicare beneficiaries in six states will be subject to either prior authorization or pre-payment medical review. While prior authorization is familiar in the commercial market (and often criticized for creating access and administrative burdens) this is a notable expansion for Original Medicare. Hospitals operating in the affected states should prepare now to mitigate operational risk, protect cash flow, and ensure compliant, timely access to care.

Program Scope and Effective Dates

The WISeR model applies only to Original Medicare (not Medicare Advantage) and will run from January 1, 2026 through December 31, 2031. CMS and participating Medicare Administrative Contractors (MACs) will begin accepting prior authorization requests on January 5, 2026 for services rendered on or after January 15, 2026. The model is limited to six states, each paired with a WISeR participant (a technology-enabled medical review entity) working alongside the MAC:

• New Jersey (JL/Novitas)
• Ohio (J15/CGS)
• Oklahoma and Texas (JH/Novitas)
• Arizona and Washington (JF/Noridian) 

The program applies at select sites of service, including hospital outpatient departments (TOB 13X), ambulatory surgery centers (POS 24), physician offices (POS 11), and the home (POS 12). 

Services Initially Included

The WISeR model targets services with existing Medicare coverage criteria that are typically elective and high-value and/or at risk for misuse. The current list includes:

• Percutaneous image-guided lumbar decompression (PILD) for lumbar spinal stenosis (coverage with evidence development trials only)
• Arthroscopic lavage/debridement for osteoarthritic knee
• Induced lesions of the nerve tract (initial focus on trigeminal neurolysis)
• Vagus nerve stimulation (for epilepsy and specified treatment-resistant depression under coverage with evidence development)
• Phrenic nerve stimulation
• Electrical nerve stimulators (initial focus on spinal cord stimulators for permanent implantation; no overlap with existing OPD prior authorization for CPT 63650)
• Incontinence control devices (focus on mechanical/hydraulic devices for stress urinary incontinence)
• Sacral nerve stimulation for urinary incontinence (permanent implantation)
• Penile prostheses for erectile dysfunction
• Percutaneous vertebral augmentation for vertebral compression fractures
• Epidural steroid injections for pain management
• Cervical fusion (focus on CPT 22554 and 22585; no overlap with existing OPD prior authorization for 22551/22552)
• Hypoglossal nerve stimulation for obstructive sleep apnea
• Application of bioengineered skin substitutes/CTPs for specified lower-extremity chronic non-healing wounds 

Deep brain stimulation is expressly delayed at program start. CMS may update the list over time; changes will be communicated to providers.

Two Compliance Pathways: Prior Authorization or Pre-Payment Review

Hospitals and physicians in affected states have two options for each included service:

• Submit a prior authorization request in advance to receive a provisional affirmation or non-affirmation. Typical determinations are issued within three days (two days if expedited due to risk to life/health). A Unique Tracking Number (UTN) accompanies each decision and must be included on claims. Provisional affirmations are valid for 120 days. Non-affirmations come with specific deficiency feedback, and resubmissions are unlimited; peer-to-peer clinical review is available on resubmission.
• Furnish the service without prior authorization and proceed to claim submission. The claim will be automatically suspended for pre-payment medical review. The reviewer will request records; the provider has 45 days to respond. A determination is generally issued to the MAC within three days of receiving complete documentation. 

CMS emphasizes that WISeR does not change Medicare benefit, coverage, coding, or payment rules; determinations are made strictly against the relevant NCDs/LCDs and standard documentation requirements. 

Key Operational Mechanics Affecting Hospitals

Hospitals should expect new front-end and mid-revenue cycle steps, even when using existing workflows with their MACs:

• Requests may be submitted directly to the WISeR participant or to the MAC for routing. Electronic submission (fax, esMD, portals) is strongly encouraged.
• For OPD or ASC services, the UTN must be included on the facility claim when prior authorization was obtained. Absent a UTN, OPD/ASC claims for included services will be suspended for medical review.
• Associated services and items (e.g., anesthesia, implanted devices, physician services, facility fees) will be denied if the primary service is non-affirmed or denied. Conversely, they will be approved when the primary service is affirmed or approved on review.
• ABN protocols apply. If non-affirmed for lack of medical necessity, providers should issue ABNs before proceeding, append the GA modifier, and follow standard ABN rules.
• Appeals rights are preserved for claim denials. Non-affirmed prior authorization decisions themselves are not appealable, but providers may resubmit requests indefinitely prior to claim submission.

CMS is also exploring an exemption process in 2026 for high-performing providers who consistently demonstrate compliance; details will follow.

Strategic Implications for Hospitals

Although couched as a model test, WISeR introduces a meaningful utilization management layer into Original Medicare for targeted services. For hospitals, the immediate implications include:

• Access and scheduling: Without an affirmed prior authorization, services may face delays or later denials via pre-payment review. Clinically urgent cases should be triaged for expedited review.
• Revenue cycle risk: Missing UTNs, incomplete documentation, or misalignment with NCD/LCD criteria can drive denials and slow cash. Associated services are at risk if the primary service is non-affirmed/denied.
• Physician alignment: Many included services are physician-driven. Consistency in clinical documentation and indication selection will be critical to avoid non-affirmations.
• Site-of-service coordination: OPD and ASC teams need tight coordination with employed and affiliated physicians on prior authorization status and UTN transmission to ensure clean claims.
• Data and technology: Hospitals will need the ability to rapidly assemble and transmit documentation that maps directly to the coverage criteria for each included service.

Prior Authorization in Context

The commercial market’s prior authorization practices have long drawn criticism from providers and patients for administrative burden and perceived barriers to care. CMS positions WISeR as a more targeted approach: limited geographies, clearly defined services with established coverage criteria, rapid review timelines, unlimited resubmissions with peer-to-peer options, and no change to underlying benefit rules. Nevertheless, the operational realities are similar to commercial prior authorization, and hospitals should expect increased front-end work to avoid downstream denials.

Practical Readiness Steps for Hospital Leaders

Hospitals in the six WISeR states should move quickly to operationalize a sustainable process, balancing clinical access and revenue integrity:

• Map service lines and volumes. Identify where your hospital furnishes included services, who orders them, and typical sites of service. Flag high-volume DRGs/CPTs and physician groups most impacted.
• Stand up a WISeR intake and tracking process. Decide when you will seek prior authorization versus proceed to pre-payment review. Prioritize prior authorization for elective/high-dollar services and for cases at higher denial risk. Implement UTN capture and claim-crossover controls in your OPD/ASC billing workflows.
• Align clinical documentation to NCD/LCD criteria. Build concise checklists, order sets, and templated documentation keyed to each service’s required elements, including trial requirements (e.g., neurostimulators) and evidence thresholds (e.g., % improvement rules, imaging recency, failed conservative therapy).
• Train clinicians and schedulers. Ensure ordering physicians and proceduralists understand indications, trial prerequisites, and documentation standards. Educate scheduling and pre-access teams on when to require an affirmed prior authorization before slotting a case.
• Integrate with physician practices. For employed and affiliated groups, clarify who submits requests, who holds clinical documentation, and how UTNs flow to hospital billing. Use shared portals/esMD where feasible to shorten cycle times.
• Prepare for expedited cases and ABNs. Define criteria and workflows for expedited requests. Refresh ABN policies and staff training for non-affirmed medical necessity determinations.
• Monitor outcomes and iterate. Track turn-around times, affirmation rates, reasons for non-affirmation, medical review denials, and associated-service denials. Use peer-to-peer reviews strategically on resubmission. Adjust documentation playbooks as patterns emerge.
• Explore exemption opportunities. As CMS finalizes exemption criteria, evaluate your performance metrics and internal controls to qualify and maintain exempt status if available. 

Bottom Line

WISeR represents a material shift for Original Medicare in six states, layering prior authorization and pre-payment review onto targeted, elective services with well-defined coverage rules. Hospitals that quickly operationalize front-end screening, physician documentation alignment, and clean claim workflows (particularly UTN handling and associated-service dependencies) will minimize care delays and payment friction, while preserving patient access and compliance with Medicare requirements.