Wrong Surgical or Other Invasive Procedure Performed on a Patient — NCD 327 | CMS Coverage Update

TL;DR: The Centers for Medicare & Medicaid Services modified NCD 327, the wrong surgical or other invasive procedure coverage policy, with an effective date of January 9, 2026. Here's what billing teams need to know.

CMS wrong surgical procedure coverage policy NCD 327 has been on the books since 2009, but this January 2026 update makes it worth a fresh look for every billing team handling surgical claims. The policy establishes that CMS will not reimburse any surgical or invasive procedure performed erroneously on a Medicare beneficiary — full stop. No specific CPT or HCPCS codes are listed in this policy because it applies across the entire surgery section of CPT, plus invasive procedures like percutaneous transluminal angioplasty and cardiac catheterization.

Quick-Reference Table

CMS Wrong Surgical Procedure Coverage Criteria and Medical Necessity Requirements 2026

The core rule in NCD 327 Medicare is straightforward: CMS does not cover a surgical or invasive procedure when a practitioner performs the wrong procedure on a Medicare beneficiary.

The medical necessity argument doesn't save you here. CMS's position is that a wrong procedure — by definition — cannot be a "reasonable and necessary" treatment for the patient's actual condition. That's the language of Section 1862(a)(1) of the Social Security Act, and NCD 327 applies it directly.

The determining factor is documented informed consent. A procedure is considered wrong if it is not consistent with the correctly documented informed consent for that patient. Your documentation is the line between covered and non-covered.

This coverage policy applies broadly. The policy definition of "surgical and other invasive procedures" covers every procedure in the surgery section of CPT. It also covers invasive procedures outside the surgery CPT range — cardiac catheterization, percutaneous transluminal angioplasty, biopsies, probe and catheter placements through needle or trocar entry, and minimally invasive dermatological procedures including excision and deep cryotherapy for malignant lesions.

Prior authorization does not appear as a stated requirement in NCD 327. But prior auth on the front end — verifying that the procedure authorized matches the procedure documented in consent — is exactly the kind of internal control that prevents a claim from running into this NCD on the back end.

CMS Wrong Surgical Procedure Exclusions and Non-Covered Indications

NCD 327 is entirely a non-coverage policy. There are no covered indications — the policy exists to define what CMS refuses to pay for. That said, the policy is more specific about its exclusions than most billing teams realize.

Three situations explicitly fall outside the "wrong procedure" definition:

Emergent intraoperative situations. If an emergency arises during surgery and there's no time to get informed consent, the resulting procedure is not considered erroneous under this NCD. Document the emergent circumstance thoroughly in the operative record.

Intraoperative discovery of adjacent pathology. If the surgeon opens and finds pathology close to the intended site — and the risk of a second surgery outweighs the benefit of stopping to consult the patient — the deviation from the original plan is not a wrong procedure. This is a judgment call. Your documentation needs to reflect the clinical rationale clearly.

Unusual physical configurations. Discoveries like unexpected adhesions, an unusual spine level, or extra vertebrae that require a change in plan during surgery are not captured by this NCD. Again, the operative note carries the weight here.

The real issue is this: these exceptions are clinical, not administrative. Your billing team can't apply them at the claim level without clear documentation from the clinical team. If the operative note doesn't explain why the procedure differed from consent, you have a coverage problem.

Coverage Indications at a Glance

CMS Wrong Surgical Procedure Billing Guidelines and Action Items 2026

This is where wrong surgical procedure billing becomes your team's operational problem. NCD 327 spans every care setting — inpatient hospital, outpatient hospital, SNF, home health, physicians' services, FQHC, and rural health clinics. Every billing team touching surgical claims should run through these steps now, before January 9, 2026.

CPT, HCPCS, and ICD-10 Codes for Wrong Surgical Procedure Under NCD 327

This policy does not list specific CPT, HCPCS, or ICD-10 codes. That's intentional — and it's the most important thing to understand about wrong surgical procedure billing under this NCD.

NCD 327 applies to all procedures described in the surgery section of CPT. It also applies to other invasive procedures outside the surgery CPT range. CMS's own policy language names specific examples — percutaneous transluminal angioplasty, cardiac catheterization, biopsy, excision, deep cryotherapy for malignant lesions, and probe or catheter placements requiring needle or trocar entry into a body cavity.

The absence of a code list means there's no way to carve out your specialty or your procedure mix. If you bill surgical CPT codes and your patients are Medicare beneficiaries, this NCD applies to your claims.

Procedures explicitly excluded from the NCD 327 definition include examinations using instruments like otoscopes and very minor procedures like drawing blood. But everything between those and multi-organ transplantation — which the policy explicitly names as within scope — is potentially subject to NCD 327.