ICD-10 MS-DRGs Version 43.1: What Hospitals Must Prepare for Ahead of the April 2026 Update

The April 2026 ICD-10 update marks more than a routine mid-year refresh—it signals a meaningful shift in how inpatient procedures are classified, grouped, and reimbursed under Medicare Severity Diagnosis-Related Groups (MS-DRGs). With 80 new ICD-10-PCS procedure codes becoming effective April 1, 2026—on top of the 156 codes already implemented on October 1—hospital coding teams face growing complexity that directly impacts MS-DRG assignment, case mix index (CMI), and compliance risk.

Centers for Medicare & Medicaid Services (CMS) has confirmed that the ICD-10 MS-DRG Version 43.1 Grouper Software, along with the Definitions Manual and Medicare Code Edits Manual, will be released by February 1, 2026, giving hospitals a narrow window to prepare for operational and financial implications.

This article breaks down what’s changing, why Version 43.1 matters, and how hospitals can proactively protect revenue while maintaining compliance.

Why ICD-10 MS-DRG Version 43.1 Matters More Than Ever

MS-DRGs are the backbone of inpatient reimbursement. Any expansion in ICD-10-PCS codes—even when they do not immediately create new DRGs—can alter:

• MS-DRG assignment logic
• MCC/CC capture accuracy
• Surgical vs. medical DRG classification
• Relative weights and reimbursement outcomes

Version 43.1 is particularly impactful because many of the newly introduced codes reflect advances in technology, minimally invasive approaches, and highly specific therapeutic interventions. If these are not coded precisely, hospitals risk underpayment, audit exposure, or inaccurate quality reporting.

Overview of the April 2026 ICD-10-PCS Code Expansion

The 80 new ICD-10-PCS procedure codes introduced in April 2026 span several high-volume and high-risk clinical areas. While this list is not exhaustive, it highlights where hospitals should focus education and validation efforts.

1. Cardiovascular Device Insertions and Extractions

Nine new codes address pacemaker-related procedures, including both insertion and extraction scenarios. These codes add specificity around anatomical placement and approach, which is critical for accurate MS-DRG grouping.

Example:

• 02HM3JZ – Insertion of pacemaker lead into ventricular septum, percutaneous approach

Even small documentation gaps in operative notes can lead to incorrect root operation selection, potentially shifting cases into lower-weighted DRGs.

2. Digestive System Drainage Procedures

Twenty new drainage codes have been added, primarily addressing endoscopic and transmural techniques involving digestive organs.

Example:

• 0F9480D – Drainage of gallbladder with drainage device, via natural or artificial opening endoscopic, transmural

These codes require precise documentation of:

• The access route
• Whether a device was left in place
• The exact anatomical site

Inadequate specificity may result in default coding that fails to reflect procedural complexity.

3. Genitourinary System Enhancements

Several new codes refine procedural reporting for:

• Bladder-to-ureter transfers
• Prostate resections

These updates align coding more closely with modern urologic surgical techniques and may influence surgical DRG assignment when paired with certain principal diagnoses.

4. Emerging and Advanced Therapies

Version 43.1 introduces codes for embryonic stem cell introduction, reflecting CMS’s effort to keep pace with innovative therapies. These procedures often involve:

• New technology designations
• Additional reporting requirements
• Heightened audit scrutiny

Hospitals must ensure clinical documentation supports both the procedure and the intent of therapy.

5. Electrotherapeutic Treatment Codes

Five new electrotherapeutic treatment codes expand how therapeutic energy-based treatments are reported. These procedures may not always shift DRGs but can impact:

• Severity classification
• Secondary procedure reporting
• Quality and utilization data

6. Wound Management Treatment Expansion

Eighteen new wound management codes introduce greater anatomical and modality-based specificity.

Example:

• F08E5FZ – Wound management treatment of integumentary system (thorax/abdomen) using assistive, adaptive, supportive, or protective equipment

These codes highlight CMS’s growing emphasis on non-surgical inpatient interventions, which are frequently under-documented or inconsistently coded.

7. Circulatory System Introduction Codes

Seven new introduction codes address biologics and therapeutic substances delivered via the circulatory system.

Example:

• XW0330B – Introduction of alpha-1 proteinase inhibitor into peripheral vein, percutaneous approach, new technology group 11

New technology codes often require coordination between pharmacy, clinical documentation, and coding teams to ensure accurate capture.

How Version 43.1 Impacts MS-DRG Assignment and Revenue

While not every new ICD-10-PCS code creates a new MS-DRG, Version 43.1 can still materially affect reimbursement by:

• Changing surgical hierarchy logic
• Altering OR vs. non-OR classification
• Influencing MCC/CC pairing
• Affecting relative weight calculations

Hospitals that delay internal testing may not realize the downstream effects until after claims are submitted—and denied or down-coded.

Operational Readiness: What Hospitals Should Be Doing Now

To prepare for ICD-10 MS-DRGs Version 43.1, hospitals should prioritize:

Dual Coding and Grouper Testing

• Run test cases through the Version 43.1 grouper to identify DRG shifts before April 1.

Targeted Coder Education

• Focus training on cardiovascular, wound management, digestive, and advanced therapy procedures.

Documentation Improvement Initiatives

Engage physicians early to address documentation gaps related to:

• Approach
• Device usage
• Anatomical specificity
• Treatment intent

Audit and Validation Reviews

• Conduct focused pre-implementation audits to ensure coding accuracy and MS-DRG integrity.

Final Thoughts: Turning ICD-10 MS-DRG Change into Strategic Advantage

ICD-10 MS-DRGs Version 43.1 reinforces a consistent message from CMS: greater specificity, tighter alignment with clinical reality, and increased accountability in inpatient coding. Hospitals that approach this update reactively may experience revenue leakage and compliance exposure. Those that prepare strategically can strengthen documentation quality, improve DRG accuracy, and protect reimbursement in an increasingly complex regulatory environment.

For organizations managing multiple specialties, high surgical volume, or advanced therapies, external ICD-10 and MS-DRG expertise can play a critical role in ensuring readiness—before April 2026 arrives.

Turning ICD-10 MS-DRG Version 43.1 Complexity into Measurable Results

ICD-10 MS-DRGs Version 43.1 underscores a reality hospitals can no longer ignore: inpatient coding accuracy is no longer just a compliance requirement—it is a strategic revenue driver. As procedure codes become more granular and MS-DRG logic more sensitive to documentation nuance, even small gaps in coding or clinical clarity can lead to significant reimbursement loss, audit exposure, and distorted quality metrics.

This is where specialized hospital coding and MS-DRG consulting support delivers measurable value.

Our hospital-focused coding and MS-DRG consulting services are designed to help organizations confidently navigate updates like Version 43.1 while strengthening the foundations of long-term revenue integrity. We partner with hospitals and health systems to:

• Validate ICD-10-PCS code selection and MS-DRG assignment accuracy
• Perform pre- and post-implementation MS-DRG impact analyses
• Identify documentation gaps affecting surgical hierarchy, MCC/CC capture, and relative weight
• Conduct focused audits for high-risk service lines such as cardiovascular, wound care, and advanced therapies
• Provide targeted education for coding, CDI, and clinical teams aligned to CMS updates

Rather than reacting to denials or post-payment audits, our approach helps hospitals proactively safeguard reimbursement, improve case mix accuracy, and maintain compliance—especially during high-impact transitions like ICD-10 MS-DRG Version 43.1.

As CMS continues to refine inpatient payment systems to reflect evolving clinical practice, having an experienced partner with deep hospital coding and MS-DRG expertise ensures your organization remains prepared, protected, and positioned for sustainable financial performance.