FY 2027 MS-DRG Changes: 14 New DRGs, 18 Retired (V44.0)

MS-DRG Grouper Version 44.0 took effect for discharges on or after October 1, 2026. It retires 18 MS-DRGs, creates 14, and changes the relative weight of 751 of the 752 DRGs that carried over.

V43.1 in April only added procedure codes. V44.0 restructures whole DRG families, collapses severity splits, and recalibrates weights across the board. If your denial rules, CDI worklists or expected-reimbursement model name DRG numbers directly, some of those numbers stopped existing on October 1.

Every figure below came out of the V44.0 grouper rather than the proposed rule.

What Changed at a Glance

• 18 MS-DRGs retired: 258-262, 264, 466-468, 485-487, 736-741
• 14 MS-DRGs created: 210/211, 361/362, 400, 403/404, 449, 523-525, 731-733
• 766 weighted MS-DRGs in V44.0, plus error groups 998 and 999, which carry no weight
• 751 of 752 carried-over DRGs changed weight. The median surviving DRG fell 0.40%
• 38 DRGs hit the 10% cut cap, the floor on how far a weight can drop in one year
• 190 new diagnosis codes, 30 retired. 103 new procedure codes, 38 retired
• MDC structure is unchanged from V43.1

The retirements cluster in four areas: cardiac pacemaker revision, hip and knee revision and infection, gynecologic oncology surgery, and a catch-all circulatory base DRG. CMS restructured each one rather than deleting it outright.

The New DRG Families

Three of these families lost severity levels. Pacemaker revision went from five DRGs to two. Hip and knee revision went from three to one, and DRG 449 has no CC/MCC split at all. Knee infection went the same way into DRG 400. Where severity no longer splits the DRG, a CC query no longer moves the payment.

Three Consolidations That Cut Relative Weight

Collapsing a three-level family into one DRG sets the new weight below the old top level, so cases that used to group with an MCC lose the most.

The 10% cut cap applies only to DRGs that keep their number, and these cases land on new numbers, so nothing limits the drop.

The gynecologic consolidation depends on your mix. V44.0 dropped the ovarian versus non-ovarian split, so old 737 cases lose and old 740 cases gain. Whether your program nets up or down is arithmetic on your own case distribution.

Periprosthetic Joint Infection Is Now the Swing Factor

DRG 403 runs the other way.

A hip or knee revision with an MCC groups to 449 at a relative weight of 3.2995. The same case with periprosthetic joint infection documented as the principal diagnosis groups to 403 at 5.0061, which is 52% more relative weight on the same surgery. For a knee infection case with an MCC, the move from old 485 to 403 is an increase of 55.1%, one of the few places where this restructuring pays more than V43.1 did.

So PJI specificity in the principal diagnosis position is worth querying on every revision case. A 52% swing that turns on a single diagnosis is also the pattern payer DRG validation targets, so the documentation behind it has to hold up.

What Puts a Case in the New Spinal Fusion Family

DRGs 523, 524 and 525 are the highest-weight additions in V44.0. At 13.7443, DRG 523 ranks sixth among all 766 weighted MS-DRGs, behind only CAR-T therapy, heart transplant, extensive burns, ECMO and lung transplant.

Extensive fusions previously scattered across DRGs 426-428 and 456-458. Two different things now lead into the consolidated family, and grouping single codes and pairs through V44.0 shows both:

The first path is level count. A single code for more than seven thoracic joints reaches the family on its own.

The second path catches rules out. A 2-4 level lumbar fusion and a 2-7 level thoracic fusion each group to 448 alone, but billed together they reach 525, without either code asserting more than seven levels. A fusion spanning two regions of the spine can land in the extensive family on the strength of the combination.

A CDI trigger or audit filter keyed only on the high-level fusion codes will therefore miss multi-region cases, which are the more common presentation. Appendix D of the V44.0 Definitions Manual carries the qualifying combinations. Validate whatever you build against the grouper before trusting it.

Severity splits this family normally. The same thoracolumbar fusion groups to 525 with no CC or MCC, 524 with a CC, and 523 with an MCC.

Relative Weights Moved Almost Everywhere

Recalibration is budget neutral in aggregate, which hides how far individual DRGs moved. Exactly one of the 752 carried-over DRGs kept its V43.1 weight.

The largest increases went to DRGs that kept their numbers:

Thirty-eight DRGs landed at exactly -10.00%, the cut cap. The uncapped calculation for each was worse, and the remainder tends to arrive in later years.

Because so little held still, year-over-year case mix index comparisons now blend grouper restructuring with real changes in acuity. CMS does not publish a hospital-level CMI restated under V44.0. Separating the two means running your own FY 2026 discharges through both V43.1 and V44.0 and comparing.

Code Set Changes

Those are billable codes. Published counts of 190 new and 30 retired diagnosis codes, and 103 new and 38 retired procedure codes, include non-billable header entries, so the change in codes you can put on a claim is smaller than the headline.

Three of the new diagnosis codes carry MCC status:

• J4B, pulmonary mycetoma
• K6A.01, prevesical abscess
• K6A.09, other pelvic abscess

Each one is enough on its own to move a simple pneumonia case from DRG 195 to DRG 193. None of the three exists in V43.1, so an encoder still loaded with last year's code set rejects them as invalid instead of crediting the severity.

See the Resplit Yourself

Every figure above came out of the V44.0 grouper, and you can reproduce them. Load the demo case on the MS-DRG grouper, a 64-year-old with lumbar spondylolisthesis, an extensive thoracolumbar fusion, and post-operative respiratory failure. It groups to DRG 523.

Change the grouper version dropdown to V43.1 and group the identical claim. It returns 456, in a family that no longer exists. Nothing about the claim changed, only the version.

The uterine consolidation shows the same way. Principal diagnosis C54.1 with procedure 0UT90ZZ groups to 733 under V44.0 and 741 under V43.1.

Five Things to Check Now

1. Key version selection off discharge date, not admission date, from-date or bill date. A stay admitted September 20 and discharged October 3 belongs to V44.0. Check the encoder, the pre-bill DRG in the EHR, contract modeling and denial tools separately, because they often disagree.
2. Purge retired DRG numbers from every hard-coded list. Denial rules, CDI triggers, audit selection, transfer flags and implant reports that name 466-468 or 485-487 will stop matching without erroring. Rules written against 456-458 will miss the fusion cases now in 523-525.
3. Repoint CDI effort. CC queries no longer move DRG 211, 449 or 400. PJI as principal diagnosis, and MCC capture for 403 versus 404, now carry the weight.
4. Hold September discharges on V43.1. A replacement claim for a September discharge has to regroup under V43.1. Systems that always run the current grouper will assign V44.0 numbers to cases that belong in retired DRGs.
5. Restate FY 2026 under V44.0 before reporting any CMI trend.

V44.0 runs through March 31, 2027. Every annual release since V40.0 has been followed by a mid-year update in April, so whatever you build to validate this one is worth keeping.

Relative weights here were read from the V44.0 grouper's cost weight file and reflect the corrected FY 2027 values. Relative weight is not payment: actual reimbursement also applies wage index, capital, DSH and IME adjustments, and outlier payments. Group your own claims before relying on any figure above.