FY 2026 ICD-10 Coding and IPPS Updates

The Center for Medicare and Medicaid Services has released the FY 2026 updates to the Inpatient Prospective Payment System (IPPS). Keeping pace with annual changes is a must for complete and accurate reimbursement once the updates become valid on October 1, 2025. Organizations have a responsibility to familiarize themselves with the changes to ensure they are equipped with the information that leads to optimal reporting and regulatory compliance.

Here is a sample of updates to the Inpatient Prospective Payment System for FY 2026.

Payment Policies

Each year’s release of the Inpatient Prospective Payment System’s Final Rule brings updates and changes to policies that impact an organization’s requirements for reporting and reimbursement related to meeting or not meeting those requirements. The discussion and conclusions documented in the final rule, although extensive and complex, contain the details necessary for ensuring entities realize optimal reimbursement while remaining compliant. Below is an example of significant changes for FY 2026.

Examples

CMS finalized their proposal to codify the Extraordinary Circumstances Exception (ECE) Policy for the Hospital Inpatient Quality Reporting (IQR), Value-Base Purchasing (VBP), and Readmissions and Hospital Acquired Conditions (HAC) Reduction Programs.

• An Extraordinary Circumstances Exception (ECE) grants an exception from quality data reporting requirements and a request to exclude any data submitted for a hospital whose ability to accurately collect quality measure data and to report those data in a timely manner has been negatively impacted as a direct result of qualifying circumstance.
• The timeframe during which a hospital may request an ECE is up to 60 calendar days after the precipitating event

CMS is removing the COVID-19 exclusion from the following Hospital IQR Program measures:

• MORT-30-STK
• COMP-HIP-KNEE E
• xcess Days in Acute Care after Hospitalization for Acute Myocardial Infarction (AMI Excess Days)
• Excess Days in Acute Care after Hospitalization for Heart Failure (HF Excess Days)
• Excess Days in Acute Care after Hospitalization for Pneumonia (PN Excess Days)
• Hybrid Hospital-Wide All-Cause Readmission Measure (HWR)
• Hybrid Hospital-Wide All-Cause Risk Standardized Mortality Measure (HWM)

MS-DRGs

For FY 2026 CMS has deleted 6 MS-DRGs, created 5 new MS-DRGs, revised the title of 6 MS-DRGs and made other adjustments as deemed necessary to ensure ICD-10-CM and ICD-10-PCS codes map to the MS-DRG that most accurately reflects their usage of resources. The majority of changes are in MDC 01 Diseases and Disorders of the Nervous System and MDC 05 Diseases and Disorders of the Circulatory System.

Examples

New MS-DRG 318 Percutaneous Coronary Atherectomy without Intraluminal Device was created to better accommodate cases reporting percutaneous or percutaneous endoscopic coronary atherectomy because clinically, the presence of severe calcification can increase the treatment difficulty and complexity of service.

• Cases moving into new MS-DRG 318 are moving out of MS-DRGs
  • 250 Percutaneous Cardiovascular Procedures without intraluminal device with MCC
  • 251 Percutaneous Cardiovascular Procedures without intraluminal device without MCC
• CMS is deleting MS-DRGs 294 Deep Vein Thrombophlebitis with CC/MCC and 295 Deep Vein Thrombophlebitis without CC/MCC due to a low volume of cases.
• The 35 codes (I80.10 - I80.3) that currently map to these MS-DRGs will be reassigned to MS-DRGs:
  • 299 Peripheral Vascular Disorders with MCC
  • 300 Peripheral Vascular Disorders with CC
  • 301 Peripheral Vascular Disorders without CC/MCC

NTAP

For 2026 there are 27 services/technologies from 2025 that have continued NTAP approval. 5 services/technologies were granted NTAP approval under the traditional pathway and 22 were granted approval under the alternative pathway. This makes a total of 54 procedures with approval for new technology add-on payment in 2026.

Here is a partial list of technologies whose NTAP is continuing from 2025

Here is a partial list of technologies whose NTAP is newly approved for FY 2026

* Note that several of these new technologies carries a significant NTAP reimbursement amount. Effort should be made to ensure any administration of these substances is reported to avoid missing out on any rightful reimbursement.

This is just a small taste of the extensive changes being implemented in the Inpatient Prospective Payment System for FY 2026. We encourage everyone who works with the revenue cycle to review more comprehensive coverage of the updates to ensure you can hit the ground running when they become valid on October 1, 2025.

Prepare Now

Make sure you and your team are ready on October 1, 2025, to apply all of the FY2026 code updates!

Register now to enroll in HIAlearn’s FY 2025 Code Update Series, including:

• FY 2026 ICD-10-CM Code Updates
• FY 2026 ICD-10-PCS Code Updates
• FY 2026 Inpatient Prospective Payment System (IPPS) Updates
• FY 2026 CPT and HOPPS Updates

Don’t miss out! Register for these essential courses by going to HIAlearn.com/code-updates

Since 1992, HIA has been the leading provider of compliance audits, coding support services and clinical documentation audit services for hospitals, ambulatory surgery centers, physician groups and other healthcare entities. HIA offers PRN support as well as total outsource support.