Oct. 1 brings new codes, coding edits and Medicaid limits for practices

A new diagnosis code set, a fresh round of coding edits and a narrower Medicaid eligibility rule all took effect Oct. 1, which makes the first two weeks of October the time to watch denials closely.

Most of the changes are routine on their own. Landing on the same day, they give billing teams several new ways for a clean claim to bounce. Here is what changed and what to check.

The FY 2027 ICD-10-CM code set

The FY 2027 ICD-10-CM codes apply to patient encounters from Oct. 1, 2026, through Sept. 30, 2027. The update adds 190 codes, deletes 30 and revises four, according to a summary from the Society of Interventional Radiology. The volume is modest, but a deleted code left in an EHR favorites list or a superbill will reject on every claim it touches. Confirm that the practice management system and encoder loaded the new tables, and pull deleted codes from templates and pick lists.

New NCCI edits

CMS' quarterly National Correct Coding Initiative update also took effect Oct. 1. The practitioner procedure-to-procedure edits, which flag code pairs that should not be billed together, and the medically unlikely edits, which cap units of service per code, were posted in early September. Practices that scrub claims in-house or through a clearinghouse should confirm the October files are loaded so edits catch problems before Medicare does.

A warning on duplicate lab tests

CMS used its Oct. 1 MLN Connects newsletter to remind clinicians that Medicare will deny duplicate lab tests that are not medically necessary. When a clinician orders a mix of panels and individual tests, staff should check what each panel already includes and avoid ordering separate tests that repeat it. CMS' example: Medicare will not pay for a second vitamin D test unless it is medically necessary.

For a medically necessary repeat, CMS tells providers to use CPT modifier 91. A Palmetto GBA billing and coding article that CMS cited limits the modifier to the same test repeated on the same day to get multiple results; it cannot be used for a rerun to confirm a result or to fix a specimen or equipment problem. CMS also noted that its CY 2027 Physician Fee Schedule proposed rule asked for input on duplicate testing and that it is exploring options for future rules. Practices with in-house labs or standing panel orders should review those order sets now.

Medicaid eligibility narrows for some noncitizens

Beginning Oct. 1, federal funding for full Medicaid and CHIP benefits is limited to U.S. citizens and nationals, lawful permanent residents, Cuban and Haitian entrants and Compact of Free Association migrants, according to CMS implementation guidance for states. Emergency Medicaid still applies, and states that elected the CHIPRA 214 option can keep covering lawfully residing children and pregnant women. States had to redetermine eligibility for affected enrollees by Oct. 1, so a patient with active coverage in September may not have it now. Front desks should verify eligibility at every visit this month.

Hospice election statement addendum

Under the FY 2027 hospice payment final rule, the hospice election statement addendum is mandatory for elections on or after Oct. 1. Hospices must furnish it in writing within five calendar days of the election and update it within three calendar days of a plan of care change. The duty falls on the hospice, not the referring practice, but physicians who serve as hospice medical directors or attending physicians may see new paperwork. CMS will use enforcement discretion through Dec. 31, and contractors will not deny claims solely for a missing or incomplete addendum during that window.

State Medicaid financing

For state fiscal years beginning on or after Oct. 1, the uniform 6 percent hold harmless threshold for health care provider taxes gives way to limits tied to each state's existing taxes, Becker's Hospital Review reported. In expansion states, a declining cap starts at 5.5 percent in fiscal 2028 and drops to 3.5 percent by fiscal 2032. The change does not hit practice claims directly, but provider taxes help fund state Medicaid programs, so practices with heavy Medicaid volume should watch their state's budget response.

State laws

In Maryland, several laws that touch practice staffing took effect Oct. 1, according to the Maryland Board of Physicians' spring bulletin. The Physician Assistant Parity Act of 2026 adds physician assistants to the list of practitioners who may take certain actions now reserved for other clinicians. A separate law lets students who have finished the first year of an accredited radiologic technologist program register as limited X-ray machine operators, a possible staffing help for practices with in-office imaging. A menopause coverage and training law also has provisions that phase in on Oct. 1.

In Connecticut, the state's certificate-of-need overhaul became law Oct. 1, but most of its requirements do not become operative until July 1, 2027, according to an analysis from the law firm Pullman & Comley. Practices weighing a sale, merger or new imaging or surgical capacity in the state have a window to plan before the new rules apply.

What did not change

Practices that lived through last year's Oct. 1 telehealth lapse can relax on that front. Most Medicare telehealth flexibilities now run through Dec. 31, 2027, under a two-year extension in the Consolidated Appropriations Act of 2026, according to KFF.

The next checkpoint is Jan. 1, when new CPT codes, the 2027 Physician Fee Schedule and another round of NCCI edits arrive. Until then, a weekly look at denial reason codes through the end of October will show which of these changes is costing the practice money.