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2026-07-09 - Long-Term Acute Care Hospitals: Download Your FY 2025 PEPPER
Effective date
Jul 1, 2026
Identified
Jul 9, 2026
Summary
This MLN Connects newsletter (dated July 9, 2026) contains multiple CMS policy updates effective July 2026, including: (1) FY 2025 PEPPER reports now available for long-term acute care hospitals to identify billing pattern issues; (2) cervical cancer screening with HPV testing must use code G0476; (3) ASC payment system updates effective July 1, 2026; and (4) DMEPOS fee schedule guidance on KF modifier usage. Additionally, clinical diagnostic laboratories must report data by July 31, 2026, and hospital bed/accessory billing has a 27.3% improper payment rate requiring compliance review.
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What to do
Action · 13 steps
01REQUIREMENTS:
1. By July 31, 2026: If your practice operates a clinical diagnostic laboratory meeting CLFS definition (independent, physician office, or hospital outreach lab), submit data collection reports through the CLFS Data Reporting System including applicable HCPCS codes, private payor rates, and volume data for January 1–June 30, 2025 period.
02Complete registration in Identity Management System and use provided Data Reporting Template.
032. Immediately: Billing team must verify cervical cancer screening claims use ONLY code G0476 (not alternative codes) for asymptomatic female patients aged 30–65 years.
04Update billing system and encounter forms to enforce G0476 usage for HPV testing screening only (code is used in addition to Pap test).
05Educate providers on correct coding.
063. By July 1, 2026: For practices operating Ambulatory Surgical Centers (ASCs): Billing team must review and implement updates to ASC payment system effective July 1, 2026, including new device pass-through category and HCPCS code changes for surgical procedures, drugs, biologicals, and skin substitute products.
07Update fee schedules and payment indicators in billing system.
084. Effective May 18, 2026 (ongoing): DMEPOS billing team must continue using KF modifier on claims for HCPCS codes E0747, E0748, and E0760 for all dates of service on or after May 18, 2026.
09Update billing system rules to require KF modifier for these codes.
105. For long-term acute care hospitals: Authorized Officials and Access Managers should download FY 2025 PEPPER reports from CMS PEPPER Portal to review billing patterns, identify potential coding errors (under/over-coding), and monitor patient stay lengths.
11Conduct internal audits based on PEPPER findings.
126. All practices: Review Hospital Beds & Accessories provider compliance tip due to 27.3% improper payment rate.
13Verify correct billing codes, documentation requirements, and denial prevention strategies for hospital bed claims.
Codes mentioned
G0476E0747E0748E0760
Original notice
2026-07-09 - Long-Term Acute Care Hospitals: Download Your FY 2025 PEPPER
cms.gov · Always check the source before changing claims.
Related changes
See all Medicare/CMS changes →2026-07-02 - CY 2027 Hospital Outpatient Prospective Payment System & Ambulatory Surgical Center Proposed RuleHighNo effective date · Payment2026-05-14 - CMS Announces Early Adopters to Advance Solutions for Electronic Prior Authorization, Accelerating Momentum Ahead of 2027 RequirementsMediumEffective May 18, 2026 · Prior AuthorizationBrowse every Medicare/CMS change in the policy list