FY2027 IPPS moves 10 housing Z codes from CC to NonCC on October 1

CMS's FY 2027 IPPS/LTCH PPS final rule, CMS-1849-F, published in the Federal Register on August 4, 2026, finalizes a severity-level change for 10 ICD-10-CM Z codes that describe homelessness, inadequate housing, and housing instability. CMS is moving those codes from complication or comorbidity (CC) to non-CC (NonCC) for FY 2027, without modification.

The regulations are effective October 1, 2026. For inpatient discharges on or after that date, these 10 codes no longer qualify as a CC when reported as a secondary diagnosis.

This is not the FY 2027 ICD-10-CM addenda (238 new codes / 21 deletions). Those codes are already on the FY 2027 ICD-10-CM changes page. The 10 housing codes already exist. What changes on October 1 is their MS-DRG severity flag.

The 10 codes CMS named

The final rule lists these diagnosis codes and their titles, then states CMS is finalizing the change from CC to NonCC:

CMS also says these codes are reflected in Table 6J.2 — Deletions to the CC List — FY 2027, posted with the other FY 2027 IPPS tables on the FY 2027 IPPS final-rule home page.

How they got here

CMS raised homelessness codes Z59.00, Z59.01, and Z59.02 from NonCC to CC in the FY 2024 IPPS final rule. In FY 2025 it did the same for seven inadequate-housing and housing-instability codes. CMS-1849-F reverses all 10.

The agency's stated reason in this final rule is that these SDOH Z codes describe social circumstances and not medical conditions or illnesses. Commenters asked CMS to keep the CC designation. CMS finalized the proposal without modification.

Look up a specific code in the encoder if you need the current tabular note, and confirm the model-year mapping in ICD-10 to HCC when the question is risk adjustment rather than MS-DRG severity.

What this is not

It is not a CMS-HCC model update. CMS-1849-F is the hospital inpatient prospective payment system rule. The change it finalizes is the CC/NonCC designation used in MS-DRG grouping when the code is reported as a secondary diagnosis.

It is also not permission to drop the codes from the record. The ICD-10-CM Official Guidelines still govern when a Z code is appropriate. What changes on October 1 is whether that secondary diagnosis moves the stay into a "with CC" MS-DRG.

What to do before October 1

1. If your grouper, encoder, or abstracting cheat-sheet still flags these 10 Z59 codes as CCs, mark the FY 2027 change. The effective date is October 1, 2026.

2. Do not mix this with the FY 2027 new-code file. The housing codes are severity deletions (Table 6J.2), not new diagnosis codes (Table 6A).

3. Keep documenting the underlying medical conditions that actually drive resource use. CMS's response to commenters points readers to existing ICD-10-CM guidelines and, if a needed diagnosis code does not exist, to the ICD-10 Coordination and Maintenance Committee process.

4. For MA risk-adjustment work, use the CMS-HCC model for the payment year you are coding. Do not treat an IPPS CC flag as a RAF signal.