Quarterly Medical Coding Changes and Updates

Each Quarter PCG will provide a summary of the three biggest medical coding changes in US Healthcare. Each section will be dedicated to a specific quarter. If you wish to get our Quarterly Newsletter with full changes, scenarios and examples, you must consider becoming one or our Payer Organization clients for Virtual Examiner (VE). VE will apply all these changes with a simple update prior to the beginning of the quarter so that your claims can be audited with a potential 100% compliance and maximized cost containment. Click here for more details on Virtual Examiner (VE).

Q4 Medical Coding Changes Summary

Accelerated Prior Authorization Expansion for ASC Services

CMS initiated a five-year prior authorization demonstration for high-risk Ambulatory Surgical Center (ASC) procedures across multiple states, signaling a permanent shift toward pre-payment utilization controls. This change materially increases denial risk for cosmetic, reconstructive, and vein procedures when documentation and medical necessity are not validated before the date of service. Payers relying on post-pay review alone will see increased leakage and provider abrasion as retroactive recoveries become more difficult.

High-Cost Gene Therapy Billing and Modifier Risk

The introduction of Encelto, a gene therapy billed at approximately $250,000 per implant, introduces unprecedented financial exposure tied to modifier accuracy and fractional billing. Incorrect unit reporting or repeat service modifiers can result in six-figure overpayments on a single claim.

Medicare Drug Pricing File Revisions Increase ASP Volatility

CMS released revised ASP and NOC pricing files for Q4, reinforcing that absence of a pricing crosswalk does not imply coverage. Plans relying on static pricing tables face heightened risk of overpaying specialty drugs when quarterly revisions are not enforced in real time.

Q3 2025 Medical Coding Changes Summary

Clinical Laboratory Fee Schedule Revisions and QW Enforcement

CMS revised the Clinical Laboratory Fee Schedule, expanding CLIA-waived test codes requiring the QW modifier. Claims missing required modifiers are increasingly denied or inconsistently paid, creating compliance gaps across vendors and provider types.

PET Scan Tracer and Modifier Pairing Requirements

Updated guidance clarified that PET scan claims must include corresponding radioactive tracer codes and applicable modifiers on the same date of service. Failure to pair imaging and tracer logic results in mutual claim denial, exposing plans to both payment errors and provider disputes.

Orthopedic Footwear Improper Payment Focus

CMS reported a 100% improper payment rate for orthopedic footwear audits, driven primarily by documentation and delivery confirmation failures. This category represents a high-confidence compliance target where historical payment behavior no longer aligns with enforcement priorities.

Q2 2025 Medical Coding Changes Summary

ICD-10-CM FY2025 Structural Code Expansion

The FY2025 ICD-10-CM update introduced over 250 new diagnosis codes along with deletions and revisions affecting diagnostic specificity. These changes materially impact claim pairing logic and diagnosis sequencing across multiple specialties.

Expanded Excludes 1 and Excludes 2 Enforcement

CMS significantly revised Excludes 1 and Excludes 2 notes, redefining which diagnoses may never be billed together versus those conditionally allowed. Legacy rulesets frequently miss these conflicts, resulting in silent overpayments that evade manual review.

Home Health ICD-10 Code Additions

Seventy-one new ICD-10 codes were added to the Home Health listing, altering episode-based payment eligibility. Claims paid outside the home health episode window now represent clear overpayment exposure rather than recoverable technical errors.

Q1 2025 Medical Coding Changes Summary

Telehealth POS Code Selection Drives Payment Rate

CMS reaffirmed that POS 02 versus POS 10 — not telehealth modifiers — determines facility versus non-facility payment rates. Incorrect POS selection results in systemic overpayment, particularly for audio-only encounters.

Annual HCPCS Code Updates for 2025

Annual HCPCS updates introduced new codes, deletions, and descriptor changes impacting professional and facility billing. Without quarterly code refreshes, plans risk mispricing services that appear valid but no longer align with CMS intent.

Annual Wellness Visit (AWV) SDOH Billing Expansion

CMS expanded AWV billing to include Social Determinants of Health assessments using HCPCS G0136 with modifier requirements. Improper sequencing or modifier omission frequently results in paid claims that fail compliance standards.

Q4 2024 Medical Coding Changes Summary

Hospital OPPS Payment Category Reclassification

The October OPPS update introduced new status indicators and payment packaging rules affecting outpatient hospital services. Services historically paid separately are now conditionally bundled, increasing overpayment risk when logic is not updated timely.

ASC Payment Updates and Skin Substitute Reclassification

ASC updates included revised CPT and HCPCS groupings for skin substitutes and biologics. Misclassification between categories can materially change reimbursement amounts and trigger audit exposure.

Hospital ICD-10-PCS Inpatient Code Expansion

CMS added over 370 new inpatient procedure codes under ICD-10-PCS, many tied to emerging technologies. Accurate procedural classification is now essential to avoid DRG misassignment and downstream audit risk.

Q3 2024 Medical Coding Changes Summary

Consolidated Billing Enforcement for Home Health Episodes

CMS reinforced consolidated billing requirements for services delivered during active home health episodes. Payments made outside the primary agency represent unrecoverable overpayments once finalized.

Vaccine Pricing and Preventive Service Updates

Updated flu, COVID-19, and preventive vaccine pricing rules altered payment methodology across care settings. Inconsistent application leads to both underpayment and overpayment depending on site of service.

Depression Screening POS Expansion

CMS expanded allowable POS codes for annual depression screening, including telehealth locations. Claims billed outside approved POS logic increasingly trigger compliance flags. 

Q2 2024 Medical Coding Changes Summary

OPPS Mid-Year Technical Adjustments

CMS issued mid-year clarifications impacting outpatient packaging and status indicators. These changes often lag in payer systems, creating payment drift over time.

ASC Code Descriptor Revisions

Multiple ASC descriptors were revised, affecting eligibility and reimbursement amounts. Descriptor mismatches are a common source of payment inaccuracies.

Increased Scrutiny on Lab and Pathology Billing

CMS emphasized documentation and medical necessity requirements for lab and pathology services. These categories remain high-frequency audit targets.

PCG News 4th Qtr 2024

Q1 2024 Medical Coding Changes Summary

Annual HCPCS Updates for Home Health Consolidated Billing

CMS updated the list of HCPCS codes subject to home health consolidated billing enforcement. Services billed outside the episode window continue to represent pure overpayments.

Telehealth Billing Standardization

CMS narrowed acceptable telehealth billing structures, reducing flexibility around modifiers and POS usage. Improper combinations frequently bypass legacy edits.

Fraud, Waste, and Abuse Enforcement Signals

High-profile enforcement actions reinforced CMS’s focus on payment integrity, kickbacks, and improper billing patterns. These signals directly influence audit prioritization across payer organizations.

Quarterly Medical Coding Updates Summary and Next Steps

Each quarter, PCG Software publishes a concise executive summary of the three most impactful medical coding changes affecting U.S. healthcare reimbursement and compliance. Each section below represents a single quarter and highlights coding, payment, and regulatory shifts that materially influence claim accuracy, audit exposure, and cost containment for health plans, MSOs, IPAs, and TPAs.

This page is intentionally designed as a strategic overview, not a complete operational guide. Our full Quarterly Medical Coding Newsletter includes expanded change logs, real-world billing scenarios, claim examples, and payer-specific implications. Access to the full newsletter is available to payer organizations that engage PCG Software as a Virtual Examiner® (VE) client.

Prior to the start of each quarter, Virtual Examiner applies all applicable coding, payment, and policy changes directly into the audit and adjudication workflow. This allows payer organizations to audit claims against the most current rules with the potential for near-complete compliance, reduced financial leakage, and improved operational efficiency—without relying on manual updates or retrospective corrections.



As additional historical quarters are added, this page will continue to serve as a living reference that reflects how medical coding requirements evolve over time—and why proactive, automated enforcement is now essential to payment integrity.

Click here for more details on Virtual Examiner® (VE).