employee benefits

Who this applies to: CFOs, controllers, finance directors, HR directors, benefits administrators, and plan administrators at employers that sponsor 403(b) plans using pre-approved documents.

The IRS has established a critical compliance deadline for 403(b) plan sponsors: all pre-approved 403(b) plan documents must be restated under Cycle 2 no later than December 31, 2026. Failure to meet this deadline could jeopardize a plan’s tax-advantaged status—creating significant operational, financial, and fiduciary risk. 

While the requirement itself is not new, many plan sponsors have not yet begun the restatement process. As year-end approaches, capacity constraints at document providers, recordkeepers, and advisors may create bottlenecks. Acting now will help ensure timely compliance and avoid last-minute complications.

Why the Cycle 2 restatement matters 

The IRS requires periodic restatements of pre-approved 403(b) plans to incorporate: 

• Legislative and regulatory changes 
• IRS guidance issued since the prior cycle 
• Updates to plan language and operational requirements 

The Cycle 2 restatement reflects changes since the first remedial amendment cycle for 403(b) plans, including updates related to hardship distributions, loan rules, and required minimum distributions, among others. 

Importantly, this restatement is not optional—it is a condition of maintaining the plan’s qualified status under Internal Revenue Code Section 403(b).

Who is affected?

This requirement applies to employers sponsoring 403(b) plans that use pre-approved plan documents, including: 

• Public schools and educational organizations 
• Tax-exempt organizations under IRC Section 501(c)(3) 
• Certain ministers and church-related organizations (depending on document structure) 

If your plan is individually designed, different rules may apply—but most 403(b) plans today utilize pre-approved document formats. 

Key action steps for plan sponsors

To help ensure compliance ahead of the December 31, 2026 deadline, we recommend the following steps:

1. Confirm your plan document type 

Determine whether your 403(b) plan uses a pre-approved document (vs. individually designed). 

• If you are unsure, consult with your recordkeeper, third-party administrator (TPA), or ERISA counsel. 
• This step is critical, as the Cycle 2 requirement specifically applies to pre-approved plans. 

2. Review the Cycle 2 restated document 

Once your provider issues the updated plan document: 

• Review the restated provisions carefully. 
• Pay close attention to operational changes that may affect plan administration or participant eligibility. 
• Coordinate with your advisor to understand any new responsibilities or compliance considerations. 

3. Adopt the restated plan by December 31, 2026 

Formal adoption must occur by the IRS deadline: 

• Execution typically requires an authorized employer representative. 
• Late adoption may require correction under the IRS Employee Plans Compliance Resolution System (EPCRS), which can involve additional cost and administrative burden. 

4. Retain the executed document 

Maintain a fully signed copy of the restated plan document: 

• Store it with your permanent plan records in your ERISA file. 
• Ensure it is accessible for auditors, regulators, or internal governance reviews. 

5. Distribute an updated Summary Plan Description (SPD) 

An updated SPD reflecting the restated plan provisions: 

• Must be provided to participants within 210 days following plan adoption.
• Should clearly communicate plan terms in a participant-friendly format.

6. Communicate material changes 

If the restatement introduces material changes impacting participant rights or benefits: 

• Provide clear and timely communication to participants. 
• Consider targeted messaging to affected populations. 
• Align communications with fiduciary best practices for transparency. 

Avoiding year-end capacity constraints 

A key practical consideration for 2026 is vendor capacity. Historically, plan sponsors that wait until the fourth quarter to begin restatement: 

• Experience delays in receiving documents 
• Encounter limited availability from TPAs and advisors 
• Risk missing the adoption deadline 

Starting the process early allows for: 

• Thorough document review 
• Adequate time for internal approvals 
• Proper coordination of participant communications 

Fiduciary considerations 

From a fiduciary perspective, timely compliance with the Cycle 2 restatement requirement is part of maintaining prudent plan governance. Failure to act could result in: 

• Plan disqualification risk 
• Increased scrutiny during audits 
• Operational failures requiring correction 

Proactive planning, documentation, and communication demonstrate sound fiduciary oversight and help protect both the plan sponsor and participants. 

Plan sponsors should act now

The Cycle 2 restatement deadline of December 31, 2026 is fast approaching. While the process is manageable, it requires coordination and timely action. Plan sponsors should act now to confirm their document status, engage their service providers, and begin the review and adoption process well in advance of year-end.

Key takeaways

• Confirm whether your 403(b) plan uses a pre-approved document, because the Cycle 2 restatement requirement applies specifically to pre-approved plans. 
• Adopt the restated 403(b) plan document by December 31, 2026, to help maintain the plan’s tax-advantaged status. 
• Review the updated plan provisions for changes that may affect plan administration, participant eligibility, or compliance responsibilities. 
• Retain the fully executed restated plan document with permanent plan records, so it is available for audits, regulators, or governance reviews. 
• Communicate updated plan terms and any material changes to participants within the required time frame.

Need help or have questions? Reach out to your BerryDunn or Creative Planning Retirement Services teams. 

Who this article applies to: Read this if you are a CEO, CFO, board member, or other professional involved in the Form 990 reporting process at a nonprofit organization that files Form 990.

You've probably heard the phrase "show the receipts." In today's world, this means being able to support your claims with clear evidence and documentation. While transparency has always been a cornerstone of the nonprofit sector, lawmakers and regulators are looking to place even more emphasis on transparency, accountability, and disclosure.

In April 2026, the US Department of the Treasury announced plans to revise Form 990. According to the announcement, the proposed revisions are intended to improve transparency, strengthen tax administration, and enhance reporting related to certain activities of organizations exempt under Internal Revenue Code Section 501(c)(3), including government contracts, government grants, and fiscal sponsorship arrangements. Treasury officials have indicated the initiative is intended to improve visibility into how charitable organizations receive and use funds, particularly where complex organizational structures exist.

Five legislative proposals focused on nonprofit transparency

In July, as a follow-up to the Treasury’s April announcement, the House Ways and Means Committee—the chief tax-writing committee in the US House of Representatives—approved five proposed pieces of legislation aimed at increasing transparency and accountability within the nonprofit sector.

1) Foreign Funding Transparency Act (H.R. 9772) – House Ways and Means Committee memo

• Requires tax-exempt organizations to collect and report to the IRS the aggregate amount of donations received from foreign nationals. 
• Mandates that tax-exempt organizations include as a separate line item the aggregate amount of donations received from those foreign nationals who are from a foreign country of concern (i.e., China, North Korea, Russia, Iran). 
• Addresses how dual citizenship is reported for foreign nationals from a country of concern to ensure accurate reporting.

2) Stopping Foreign Influence in Elections Act of 2026 (H.R. 9771) – House Ways and Means Committee memo

• Enacts a penalty on tax-exempt organizations that receive contributions from foreign nationals and then donate to a Political Action Committee (PAC) or a 501(c)(4). Penalty is twice the amount of the contribution given to the entity.
• Establishes secondary excise tax on tax-exempt organizations that contribute to a PAC or 501(c)(4) organization if they have received a contribution or gift from a foreign national within the last two years.
  • Excise tax on the first contribution is equal to 100% of the contribution to the PAC.
  • Excise tax on the second contribution is equal to 200% of the contribution to the PAC. 
• Suspends tax-exempt status for two years, beginning on the date a tax-exempt organization makes a third contribution to a PAC, and imposes an additional 200% excise tax.

3) Fiscal Sponsorship Transparency Act (H.R. 9721) – House Ways and Means Committee memo

• Requires tax-exempt organizations to disclose the following information regarding certain fiscally sponsored projects:
  • Name of each party, other than any individuals, subject to the arrangement
  • Aggregate amount of funds made available or transferred to the project
  • Description of the activities related to the amounts made available or transferred
  • Name of the individual designated as the principal officer managing the fiscal sponsorship arrangement on behalf of the organization
  • Date on which the arrangement began, and if applicable, the date on which the arrangement ended
• Imposes excise taxes on organizations acting merely as a conduit for a third party that is not tax-exempt.

4) Fair Treatment of Religious Organizations Act of 2026 (H.R. 9722) – House Ways and Means Committee memo

• Amends IRC §501 to require that determinations of religious purpose be made without regard to an organization's beliefs or practices concerning marriage, sexuality, or gender identity—even if inconsistent with public policy. Protections extend to §501(c) status, eligibility for deductible contributions, and any other federal benefit tied to charitable status. 
• Clarifies that a belief does not fail to be treated as a religious belief merely because it is not compelled by or central to a system of religion. 
• Applies to taxable years beginning after December 31, 2025.

5) Tax Exempt Hospital Transparency Act (H.R. 9504) – House Ways and Means Committee memo

• Amends IRC § 6033 governing disclosure to require additional reporting from all tax-exempt hospitals, including: 
  • CMS certification number for each hospital facility
  • Value of the financial assistance provided during a taxable year
  • Number of completed financial assistance applications received, granted, and denied during a taxable year
• Requires the following additional reporting from large tax-exempt hospitals that have more than 100 inpatient beds:
  • Amount of spending to address the three highest priority health needs identified in the most recent Community Health Needs Assessment and a description of actions taken during the taxable year to meet each need
  • Amount of spending on: 
    • Quality improvement
    • Nonclinical programming
    • Other community benefits that the Secretary may prescribe
• Requires the following additional reporting from high revenue tax-exempt hospitals that have more than $100 million in net patient revenue: 
  • Spending on advertising costs
  • Information on health service lines
  • Information on 340B drug discount program

Importantly, while the House Ways and Means Committee has approved these proposals, they must complete the legislative process before becoming law. While specific details regarding potential changes to Form 990 remain unclear, the message from policymakers is not: changes are likely on the horizon.

What does this mean for tax-exempt organizations?

Currently, there are no immediate changes to Form 990 reporting requirements. Further, if history is any indication, modifications to Form 990 traditionally move at a deliberate pace and involve an extensive review and development process. This includes public comment periods, which allow practitioners, organizations, and other stakeholders an opportunity to provide feedback, ask questions, and seek clarification before any new requirements are finalized or enacted.

These recent developments serve as a helpful reminder that strong recordkeeping and documentation efforts remain crucial. Organizations should continue maintaining thorough support for their activities, grants, government funding, transactions, and governance practices. If future reporting requirements do emerge, an organization with sound documentation processes in place will generally fare better than those who do not.

Despite past precedent, could changes still be coming for the 2026 Form 990 as we approach the end of the year? Absolutely.

Key takeaways

• Recognize that proposed Form 990 revisions are intended to increase transparency around government grants, contracts, fiscal sponsorship arrangements, and other activities of tax-exempt organizations.
• Monitor the five nonprofit transparency bills approved by the House Ways and Means Committee, which must still move through the full legislative process before becoming law.
• Understand that no immediate Form 990 reporting changes apply yet, and any revisions may still involve review, development, and public comment.
• Maintain thorough documentation for activities, grants, government funding, transactions, and governance practices to better prepare for potential new reporting requirements.

About BerryDunn

The transparency conversation is still unfolding, and BerryDunn is actively monitoring all legislative and regulatory developments potentially affecting tax-exempt organizations. As additional guidance becomes available, we will continue to keep clients informed and help organizations understand what these developments may mean. Until then, we recommend watching for more developments and keeping your receipts. Learn more about our team and services.

Who this applies to: Broker-dealers and their audit committees/boards. 

The Public Company Accounting Oversight Board (PCAOB) recently released its 2025 Annual Report on the Interim Inspection Program Related to Audits of Brokers and Dealers, providing insight into the quality of broker-dealer audits and attestation engagements performed by PCAOB-registered firms. 

While the PCAOB reported improved inspection results in 2025, many of the deficiencies occurred in areas that remain a focus for SEC, FINRA, and PCAOB oversight. Broker-dealers should view the report as a roadmap to the areas most likely to attract regulatory scrutiny.

Inspection results continue to improve

The PCAOB inspected 61 firms and reviewed 103 broker-dealer audits during 2025. In its review, the PCAOB focused on areas involving heightened risk to investors and the protection of customer assets. Overall, inspection results improved across examination engagements, review engagements, and financial statement audits. 

The PCAOB found the following:

• Deficiencies in examination engagements (broker-dealers filing compliance reports) decreased to 40%, compared to 59% in 2024. 
• Deficiencies in review engagements (broker-dealers filing exemption reports) were 41%, generally consistent with the prior year. 
• Deficiencies related to sufficient or appropriate evidence in financial statement audits declined to 56%, compared to 66% in 2024.

While inspection results improved, deficiencies remain common across broker-dealer audits and attestation engagements. 

Revenue remains the leading source of audit deficiencies 

Revenue testing was once again the area with the highest number of deficiencies. The PCAOB identified revenue-related deficiencies in 38 of 102 audits in which revenue was reviewed (37%).  

Common issues included: 

• Insufficient testing of commission, underwriting fee, and advisory fee calculations 
• Inadequate procedures to support revenue recognition under ASC 606, including the evaluation of performance obligations and related disclosures 
• Overreliance on information provided by broker-dealers or service organizations without sufficient testing 

Revenue is often one of a broker-dealer's most significant accounts and frequently involves management judgment and complex accounting considerations. Deficiencies in this area can result in audit adjustments, disclosure issues, and increased scrutiny from regulators, and they can potentially delay the completion of financial statement audits. Broker-dealers should ensure revenue streams are well documented and supported by controls that demonstrate compliance with ASC 606 and other applicable reporting requirements.

Continued scrutiny of customer protection and compliance requirements 

For broker-dealers that hold customer assets or are subject to customer protection requirements, the PCAOB again identified deficiencies related to compliance examinations. Many of these findings involved insufficient testing of controls over compliance with SEC financial responsibility rules.  

Key observations included:

• Insufficient testing of controls related to customer reserve calculations and possession or control requirements under the Customer Protection Rule 
• Failure to adequately evaluate important controls governing customer assets, including management review controls and controls over information used in regulatory calculations 
• Deficiencies in testing information produced by service organizations and information technology controls 

For broker-dealers subject to SEC Rule 15c3-3 or other financial responsibility requirements, weaknesses in compliance controls can lead to regulatory findings, increased examination activity, and questions about the safeguarding of customer assets. Strong documentation and effective controls are essential not only for audit purposes but also for demonstrating ongoing regulatory compliance. 

Evaluating audit results remains a challenge 

The PCAOB observed an increase in deficiencies related to auditors' evaluation of financial statement presentation and disclosures. Deficiencies in this area were identified in 27 audits (26%), up from 16% in the prior year.  

Examples included failures to identify:

• Incomplete or inaccurate disclosures related to revenue recognition under ASC 606, including required information about performance obligations 
• Financial statement presentation and disclosure issues involving cash flows, fair value measurements, and income taxes 
• Omitted or incomplete disclosures associated with related-party transactions, segment reporting, fair value measurements, and other required GAAP disclosures 

These findings highlight the importance of not only accurate accounting but also thorough disclosure reviews during the financial reporting process. 

Related-party relationships and transactions remain a regulatory focus 

The PCAOB continues to identify deficiencies associated with auditors' evaluation of related-party relationships and transactions. In 2025, deficiencies were identified in five of the 30 audits in which related-party relationships and transactions were reviewed (17%), compared to 36% in 2024. While this represents improvement from prior years, related-party arrangements remain an area of heightened scrutiny due to the unique business structures commonly found within broker-dealer organizations. 

Common findings included: 

• Insufficient testing of revenue and expense allocations between broker-dealers and affiliated entities 
• Failure to verify the accuracy and completeness of data used in allocating revenues and expenses between broker-dealers and their affiliates 
• Inadequate evaluation of whether allocations were consistent with written intercompany agreements 
• Omitted or incomplete related-party disclosures required under ASC 850 
• Insufficient communication of related-party matters to those charged with governance

Broker-dealers frequently operate within networks of affiliated entities and may share personnel, facilities, technology platforms, and operating costs across those entities. As a result, expense-sharing arrangements, management fee allocations, clearing relationships, and other affiliated transactions often attract audit and regulatory attention. Management should periodically review related-party agreements, ensure allocation methodologies are consistently applied and supported, and confirm that all required disclosures are complete and accurate.

Fraud-related procedures continue to attract attention 

The PCAOB also identified recurring issues related to journal entry testing and fraud risk considerations.  

Common findings included: 

• Failure to select journal entries with fraud-related characteristics 
• Incomplete journal entry populations 
• Insufficient testing of supporting documentation 
• Lack of rationale for excluding journal entries from testing 

Broker-dealers should view these findings as a reminder that fraud risk assessment extends beyond the audit process. Strong internal controls, management oversight, and monitoring activities can help identify unusual transactions before they become regulatory or financial reporting issues. Because fraud-related procedures remain a core PCAOB focus, weaknesses in these areas may attract increased attention during both audits and inspections.

Turning inspection findings into action 

The PCAOB's report is more than a summary of audit deficiencies. It provides broker-dealers and those charged with governance with valuable insight into the financial reporting, compliance, and control areas receiving the greatest regulatory attention. By understanding these common inspection findings, management can strengthen controls, improve documentation, enhance disclosures, and better position the organization for audits, examinations, and ongoing regulatory oversight.  

For broker-dealers, the strongest response to the PCAOB's inspection findings is a proactive one: 

• Identify gaps before the audit begins. 
• Strengthen controls before regulators identify deficiencies. 
• Maintain a year-round focus on financial reporting and compliance risks. 

Key takeaways

• Monitor PCAOB inspection findings to understand which broker-dealer audit and attestation areas are most likely to receive regulatory scrutiny. 
• Strengthen documentation, controls, and disclosures around revenue recognition, customer protection, related-party transactions, and fraud procedures. 
• Review audit readiness throughout the year so financial reporting and compliance issues can be addressed before audits, examinations, or inspections.

About BerryDunn

Our financial services team understands the complex regulatory environment that broker-dealers operate in and provides practical solutions to help you stay ahead of requirements. From broker-dealer financial statement audits to tax preparation, compliance, and consulting services, we tailor our services to meet your unique needs. Learn more about our team and services. 

Who this applies to: Those responsible for price transparency reporting, revenue cycle/registration, or contracting at an Inpatient Prospective Payment System (IPPS) hospital or in a reimbursement department at a healthcare facility. 

The Centers for Medicare and Medicaid Services (CMS) introduced Worksheet S-12 to Form CMS-2552-10, adding a new reporting requirement for certain IPPS hospitals. Effective for cost reporting periods ending on or after January 1, 2026, applicable hospitals must report the weighted median Medicare Advantage Organization (MAO) payer-specific negotiated charge by Medicare Severity Diagnosis Related Group (MS-DRG) for inpatient discharges during the cost reporting period.

What Worksheet S-12 measures and why it matters 

Although the worksheet refers to negotiated “charges,” the reported amount is better understood as the negotiated payment rate or estimated payment amount associated with a Medicare Advantage contract for a specific MS-DRG. These amounts generally do not tie directly to the actual payment received on each individual claim. Instead, the worksheet is intended to capture a standardized, discharge-weighted median negotiated amount for each applicable MS-DRG. 

CMS created Worksheet S-12 to collect MS-DRG-specific payment data for use in developing a market-based MS-DRG relative weight methodology beginning in FY 2029. Because CMS has stated that they may refine this methodology through future rulemaking before implementation, hospitals should monitor future rules and related guidance for updates.

Who must complete Worksheet S-12? 

Worksheet S-12 applies to subsection (d) hospitals, including applicable IPPS hospitals and subsection (d) Puerto Rico hospitals. The requirement does not apply to Critical Access Hospitals, inpatient psychiatric hospitals, inpatient rehabilitation hospitals, children’s hospitals, and cancer hospitals. CMS instructions also identify other limited exemptions, such as hospitals that do not negotiate payment rates and only receive non-negotiated payments, as well as hospitals paid under the Maryland Total Cost of Care Model during the model’s performance period.  

Hospitals should carefully evaluate whether they are subject to the requirement before preparing the cost report. Failure to complete the worksheet may result in the cost report being rejected, making early assessment and data preparation important. 

Core data needed to complete Worksheet S-12 

• The hospital’s most recent Hospital Price Transparency Machine-Readable File (MRF) as of the hospital’s cost report filing date, which should include MAO payer-specific negotiated charges 
• Detailed inpatient discharge data from the hospital’s Electronic Medical Record (EMR) or patient accounting system, organized by payer, plan, and MS-DRG 
• Identification of capitated and non-capitated Medicare Advantage plans, because capitated arrangements are excluded from the weighted median calculation but may still be needed for reconciliation and audit support 
• MS-DRG grouping or mapping information, particularly when negotiated charges are not identified directly at the MS-DRG level and must be cross-walked from another classification system 

Why the MFRs matters 

The Hospital Price Transparency MRF is central to Worksheet S-12 because it is the source for the MAO payer-specific negotiated charges. Hospitals should confirm that their file is available, complete, and formatted in a way that allows negotiated charges to be matched to MAO plans and MS-DRGs. If the file is incomplete or difficult to use, the hospital may face significant challenges preparing the worksheet accurately and timely.

Building the discharge detail file 

The discharge detail file should be developed from the hospital’s EMR or patient accounting system and should include one line per inpatient discharge. The file should be based on discharge dates within the hospital’s fiscal year and should include inpatient bill types, such as 11x claims, while allowing the hospital to identify transfers, denied claims, outpatient accounts, and claims pending appeal. 

• Account number or other unique discharge identifier 
• Discharge date 
• Discharge disposition or other indicator used to distinguish true discharges from transfers 
• Financial class 
• Payer plan name 
• Payer plan code 
• MS-DRG 
• Capitation indicator 
• Claim status, including indicators for denied claims, outpatient claims, and claims pending appeal 

A clean discharge detail file is essential because the weighted median calculation depends on matching each applicable Medicare Advantage discharge to the correct negotiated charge. Each discharge should appear on a single line so that the data can be sorted, filtered, reconciled, and matched consistently.

How to calculate the weighted median negotiated charge 

To calculate the weighted median Medicare Advantage payer-specific negotiated charge, the hospital should first isolate inpatient discharges associated with Medicare Advantage plans. The negotiated charge from the MFR should then be matched to each discharge based on the MAO payer and the applicable MS-DRG. If a discharge or negotiated charge is not already identified at the MS-DRG level, the hospital must perform an appropriate crosswalk or grouping process. 

1. Assign each Medicare Advantage inpatient discharge a payer-specific negotiated charge using the MAO plan and coded MS-DRG. 
2. If the discharge is not coded to an MS-DRG, map the applicable classification, such as an APR-DRG, to the appropriate MS-DRG for matching. 
3. Exclude capitated discharges and other accounts that should not be included in the calculation, while retaining them as needed for reconciliation and a solid audit trail. 
4. Sort the remaining records by MS-DRG and negotiated charge from lowest to highest. 
5. For each MS-DRG, identify the median negotiated charge. If the number of discharges is odd, use the middle value. If the number of discharges is even, average the two middle values. 
6. Enter the resulting median negotiated charge on Worksheet S-12 only for MS-DRGs that had applicable discharges during the fiscal year. 

How to prepare for Worksheet S-12 

Hospitals should begin preparing for Worksheet S-12 well before the cost report filing deadline.  

Key steps to take now:  

1. Validate the hospital’s MRF. 
2. Confirm Medicare Advantage payer mappings. 
3. Develop a discharge-level data extract. 
4. Identify capitated arrangements. 
5. Test the median calculation process. 

Early preparation can help reduce filing risk, support reconciliation, and avoid last-minute issues with cost report software edits. 

Because Worksheet S-12 connects Hospital Price Transparency data, Medicare Advantage contracting information, and Medicare cost report reporting, the preparation process will likely require coordination among reimbursement, finance, revenue cycle, contracting, and information technology teams.

Key takeaways

• Determine whether your hospital is required to complete Worksheet S-12 before beginning Medicare cost report preparation. 
• Validate the hospital’s MRF to confirm Medicare Advantage negotiated charge data is complete and usable. 
• Build a discharge-level data file that connects Medicare Advantage inpatient discharges to payer plans and MS-DRGs. 
• Exclude capitated arrangements and other non-applicable accounts from the weighted median calculation while retaining support for reconciliation. 
• Coordinate across reimbursement, finance, revenue cycle, contracting, and IT teams to reduce filing risk and support timely reporting.

About BerryDunn

BerryDunn’s healthcare reimbursement team can help hospitals prepare for Worksheet S-12 by evaluating applicability, reviewing MRF readiness, developing discharge-level data extracts, mapping Medicare Advantage plans and MS-DRGs, and creating a defensible approach to the weighted median calculation. If your organization has questions about this new Medicare cost report requirement or needs support preparing for implementation, we can help. Learn more about our team and services.

Who this article applies to: Compliance officers, revenue integrity directors, clinical documentation improvement specialists, clinical documentation and coding auditors, and healthcare providers at healthcare facilities or medical practices. 

It may feel at times like CPT® (Current Procedural Terminology) coding never changes—until it does. The American Medical Association (AMA) annually updates the CPT code set, with main revisions becoming effective January 1, 2027. These changes often require organizations to rethink documentation, coding, workflows, education, and auditing. CPT coding updates may be sporadic and unique, but early organizational preparation can minimize disruptions.

The impacts of CPT code changes may reverberate well beyond the coding department. Significant CPT revisions can affect the productivity, coding accuracy, denial rates, reimbursement patterns, compliance monitoring, Electronic Health Record (EHR) builds, payer contract assumptions, and audit findings of coding and revenue cycle teams. Even seemingly straightforward code changes can trigger extensive downstream impacts if documentation expectations, charge capture workflows, and system configurations are misaligned. Organizations should therefore approach major CPT updates as cross-functional operational changes, rather than as isolated coding updates, and prepare early. 

One CPT change, organization-wide impact 

The upcoming 2027 obstetric coding changes provide an excellent example of the broad impact code changes can have across an organization. Beginning January 1, 2027, maternity care reporting will undergo one of its most significant changes in decades, bringing an end to the long-used global obstetric package model. The resulting increase in Evaluation and Management (E/M) service reporting will require complete and accurate documentation to support code selection.

This shift to increased E/M coding for obstetric services reinforces an important lesson that is applicable to other service lines. Major CPT revisions, such as for obstetrics, rarely involve code changes alone. In the obstetrical example, use of increased E/M coding will require documentation improvements and EHR template revision, workflow redesign, provider education, and ongoing auditing to ensure compliance with the resulting changes.

Preparation will be especially important for these code sets because many patients receiving antepartum services in 2026 may continue their maternity care into 2027, when the new reporting structure takes effect. Organizations will need to consider how visits, documentation, charge capture, payer requirements, and patient encounters that cross the implementation date will be managed. Without proactive planning, organizations put themselves at increased risk for a cascade of events beginning with incomplete documentation and inconsistent coding, leading to potential delayed claims, payer denials, and confusion among providers and revenue cycle teams. Developing clear guidance before the updated code implementation will help ensure continuity of care, accurate reporting, and a smoother operational transition. 

Six steps to prepare for CPT changes

1. Start planning early. Identify affected specialties, workflows, payer policies, and EHR implications to allow time for meaningful education and implementation of changes. 
2. Engage multiple departments. Build a multidisciplinary workgroup that includes coding, compliance, revenue cycle, clinical leaders, operational leaders, and information technology representatives. 
3. Focus on documentation, not just codes. New codes often introduce new documentation requirements that all clinical staff, coders, providers, and auditors should be aware of. Perform documentation gap assessments to identify where provider education may be needed before the effective date. 
4. Evaluate technology. Validate EHR templates, charge capture tools, coding edits, payer rules, reporting systems, and analytics dashboards prior to January 1. 
5. Monitor performance after implementation. Conduct focused post-implementation audits of documentation, coding accuracy, denial trends, and reimbursement patterns to identify improvement opportunities and provide feedback. Use findings to provide timely feedback and make necessary adjustments.  
6. Communicate consistently. Provide staff and colleagues with regular updates and clear guidance throughout the transition period. Having a clear point of contact gives everyone a reliable resource for questions throughout the transition. 

Plan now for upcoming CPT code changes 

Major CPT revisions rarely involve coding changes alone; rather, they prompt cascading operational changes. Successful implementations occur when coding, documentation, compliance, clinical operations, IT, and revenue cycle teams begin planning well before the effective date. Organizations that start now will be best positioned to maintain compliance, support accurate reimbursement, and minimize operational disruption when the next major CPT update arrives. Now is the time to begin. 

BerryDunn can help  

Our healthcare compliance team can help. We incorporate deep, hands-on knowledge with industry best practices to help your organization manage compliance and revenue integrity risks. Learn more about our healthcare compliance consulting team and services.