The FY 2027 ICD-10-CM code set takes effect October 1, 2026, bringing changes to diagnosis codes and coding guidelines that home health coders need to be prepared for. This year’s update includes 190 new codes, 30 deleted codes, and 4 revised code descriptions.
Below is a quick rundown of the changes relevant to home health:
1. New Diagnosis Codes
The FY 2027 ICD-10-CM code set introduces 190 new codes, but not every new ICD-10-CM code has a PDGM clinical group or comorbidity assignment. Home health coders should review the corresponding Home Health PPS Grouper assignments when determining how new diagnoses affect home health grouping.
Examples of new codes with specific PDGM clinical group assignments include:
- I49.81 – Brugada syndrome → MMTA – Cardiac and Circulatory
- I49.82 – Ventricular bigeminy → MMTA – Cardiac and Circulatory
- I49.89 – Other specified cardiac arrhythmias, NEC → MMTA – Cardiac and Circulatory
- K76.83 – Intestinal failure-associated liver disease → MMTA – Gastrointestinal tract and Genitourinary system
- L02.237 – Carbuncle of flank → Wound
- M86.8X11–M86.8X89 – More specific osteomyelitis codes with laterality → Musculoskeletal Rehabilitation
2. Expanded Coding Specificity
The FY 2027 update expands coding specificity for several conditions commonly encountered in home health:
- Adult Low BMI: New codes provide more specific reporting for lower BMI ranges, supporting more precise documentation of patients with nutritional concerns.
- Cardiomyopathy: New and expanded codes provide greater specificity for certain types of cardiomyopathy, including dilated cardiomyopathy.
- Osteomyelitis: Expanded codes provide greater detail based on the type, anatomical site, and laterality of the infection, which may be particularly relevant for patients receiving wound or infection-related care.
These changes reinforce the importance of reviewing documentation carefully and selecting the most specific ICD-10-CM code supported by the patient’s clinical condition and documentation.
3. Deleted Codes
The FY 2027 update also removes 30 existing codes. In many cases, deleted codes are replaced by more specific codes within the same category.
Home health coders should not simply remove deleted codes from coding references. Instead, coders should identify the appropriate replacement code based on the patient’s documentation and the applicable FY 2027 coding guidelines.
4. Revised Code Descriptions
Four code descriptions have been revised for FY 2027. Three involve skin conditions:
- L02.232 – Carbuncle of back
- L03.312 – Cellulitis of back
- L03.322 – Acute lymphangitis of back
The revised descriptions clarify that the back excludes the flank. A new code, L02.237 – Carbuncle of flank, has also been added.
Changes to code descriptions can affect code selection. Home health coders should ensure that documentation supports the actual anatomical location rather than relying on a code that may have been appropriate under the previous code set.
Home Health PPS Grouper Update
CMS has also released the October 2026 version of the Home Health PPS Grouper (v07.2.26), which updates the diagnosis-code tables used for home health grouping and HIPPS code assignment.
The update includes changes involving:
- Unacceptable principal diagnosis codes
- Unspecified diagnosis codes
- Code First diagnosis codes
- Diagnosis-code descriptions
- New diagnosis codes with clinical group and comorbidity assignments
- Deleted diagnosis codes
Home health coders should therefore review not only new codes, but also whether existing diagnoses have changed in terms of sequencing, principal-diagnosis acceptability, or grouping characteristics.
Transition to the FY 2027 Code Set
The FY 2027 ICD-10-CM codes apply to patient encounters and services provided on or after October 1, 2026. The applicable code set should be determined based on the date of service or encounter, rather than simply the date the claim is submitted.
CMS identifies the FY 2027 ICD-10-CM files as applicable from October 1, 2026, through September 30, 2027.
Claims with dates of service on or after October 1 that use codes that are no longer valid may require correction or may be returned to the provider (RTP), depending on the applicable claim-processing rules.
What HHAs Should Do Before October 1
Home health agencies should review the diagnoses used most frequently and identify any codes that have been added, deleted, or changed. Coding teams should also review new instructional notes and ensure that documentation supports the level of specificity required by the updated codes.
Most importantly, make sure the EMR, coding tools, and Home Health PPS Grouper are updated for FY 2027 before processing claims subject to the new code set. CMS has already released the October 2026 Home Health PPS Grouper update.
For home health, the October update is a reminder that accurate coding is not just about choosing a diagnosis that appears in the chart. The diagnosis must be supported by the documentation, coded to the highest level of applicable specificity, and sequenced according to ICD-10-CM and home health coding guidelines. This helps support accurate clinical grouping, appropriate reimbursement, and compliant claims.
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