Traditional MedicareAdministrativeMedium impact
2026-07-09 - Long-Term Acute Care Hospitals: Download Your FY 2025 PEPPER
Medicare/CMS·OB-GYN, General Practice, Critical Care·Payment
Effective date
Jul 1, 2026
We identified it
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.
Action Required
REQUIREMENTS:
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. Complete registration in Identity Management System and use provided Data Reporting Template.
2. Immediately: Billing team must verify cervical cancer screening claims use ONLY code G0476 (not alternative codes) for asymptomatic female patients aged 30–65 years. Update billing system and encounter forms to enforce G0476 usage for HPV testing screening only (code is used in addition to Pap test). Educate providers on correct coding.
3. 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. Update fee schedules and payment indicators in billing system.
4. 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. Update billing system rules to require KF modifier for these codes.
5. 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. Conduct internal audits based on PEPPER findings.
6. All practices: Review Hospital Beds & Accessories provider compliance tip due to 27.3% improper payment rate. Verify correct billing codes, documentation requirements, and denial prevention strategies for hospital bed claims.