The ICD-10-CM Official Guidelines for Coding and Reporting for FY 2026 took effect October 1, 2025 and remain in force through September 30, 2026. Published jointly by CMS and the National Center for Health Statistics (NCHS), and approved by the Cooperating Parties – the AHA, AHIMA, CMS, and NCHS — these guidelines carry the force of HIPAA compliance requirements for diagnosis code assignment across all healthcare settings.
Compliance with the updated guidelines is not optional. Coding errors tied to guideline misapplication are a direct denial and audit risk.
What Changed for FY 2026
The FY 2026 update was released as an October revision to the April 2025 FY 2025 version. Narrative changes are marked in bold throughout the document, relocated guidance is underlined, and heading revisions appear in italics. Key areas with updated or clarified guidance include:
Social Determinants of Health and Clinician Documentation
The guidelines continue to expand the list of codes that can be supported by documentation from clinicians other than the treating provider. BMI, pressure ulcer stage, coma scale, NIH stroke scale, blood alcohol level, underimmunization status, firearm injury intent, and social determinants of health (SDOH) codes classified to Chapter 21 can all be coded based on documentation from nurses, dietitians, or other involved clinicians. However, the associated diagnosis must still be documented by the patient’s provider. SDOH and underimmunization status codes must be reported as secondary diagnoses only.
COVID-19 Coding Continues to Evolve
COVID-19 guidance remains active across multiple chapters. Key rules still in effect include coding a new active COVID-19 infection when a patient with a history of COVID-19 develops a current infection, using Z09 for follow-up visits after COVID-19 has resolved with no residual symptoms, and applying U09.9 for post-COVID condition. Separate guidance applies to COVID-19 in pregnancy, childbirth, and newborns.
Sepsis and Severe Sepsis Sequencing
Sepsis coding continues to require careful sequencing. The principal code must reflect the underlying systemic infection. A code from subcategory R65.2 for severe sepsis cannot be assigned unless severe sepsis or associated acute organ dysfunction is explicitly documented. Septic shock follows the systemic infection code and can never be assigned as a principal diagnosis. Urosepsis remains a non-specific term with no default code and always requires provider query.
Hypertension and Chronic Kidney Disease
When hypertension co-exists with heart disease or chronic kidney disease, a secondary code from the appropriate hypertension category is required to specify the type of heart failure or CKD present. The “with” convention in the Alphabetic Index applies and does not require explicit provider linkage unless a guideline specifically requires it.
Neoplasm Coding
Key updates affirm that when a primary malignancy has been previously excised with no current evidence of recurrence and no further treatment at that site, a Z85 personal history code applies. Secondary neoplasm coding and sequencing rules for chemotherapy, radiation, and immunotherapy encounters remain unchanged. A new cross-reference directs coders to Section I.C.2.t. for secondary malignant neoplasm of lymphoid tissue.
Present on Admission Reporting
The Appendix I POA guidelines clarify that conditions documented as suspected, possible, or rule out at the time of admission are assigned “Y” if the final diagnosis is based on those admission-time findings. Chronic conditions always receive “Y” even when not diagnosed until after admission. Coders should assign “U” only in very limited circumstances where documentation is genuinely insufficient — not as a routine default.
Outpatient vs. Inpatient Distinctions
Section II and Section III continue to govern principal diagnosis selection and additional diagnosis reporting for non-outpatient settings. Section IV governs outpatient coding. Coders must apply the correct section to their setting — a common source of audit findings when outpatient coders apply inpatient sequencing logic.
What This Means for Healthcare Organizations
Every coder, CDI specialist, and revenue cycle professional working with FY 2026 dates of service needs to be current on these guidelines. Denial risks are highest where documentation is incomplete, sequencing rules are misapplied, or providers are not queried when the guidelines require it. Areas to prioritize for internal audit include sepsis and severe sepsis sequencing, SDOH documentation workflows, COVID-19 coding on complex encounters, and POA assignment on chronic conditions.
Organizations using AI-assisted coding tools should verify that their vendor has updated their models to reflect the FY 2026 guidelines, particularly in high-risk chapters such as infectious disease, neoplasms, and obstetrics.
