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While reviewing claims data patterns in quarter three (Q3) of 2025, Milliman observed a significant increase in paid amounts for claims billed under Healthcare Common Procedure Coding System (HCPCS) code A4352—intermittent urinary catheter; coudé (curved) tip, with or without coating (Teflon, silicone, silicone elastomeric, or hydrophilic, etc.), each—that deviates from historical trends and could have a meaningful impact on organizations participating in value-based risk arrangement such as Medicare Shared Savings Program (MSSP) or Accountable Care Organization (ACO) Realizing Equity, Access, and Community Health (REACH).
Historical context: How CMS has previously targeted suspect billing in REACH and MSSP models
The Centers for Medicare and Medicaid Services (CMS) has historically taken steps to mitigate the effect of significant, anomalous, highly suspect billing (SAHS) activity in both the REACH and MSSP models to ensure ACOs are not penalized for spending outside their control. A 2024 CMS rule1 on SAHS billing activity specified that for both REACH and MSSP, durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) claims with either of the urinary catheter HCPCS codes A4352 or A4353 (intermittent urinary catheter, with insertion supplies) would be removed from calendar year (CY) 2023 financial calculations for performance year (PY) 2023 and all subsequent benchmark calculations that used CY2023. This change was at least partially due to findings from the National Association of ACOs (NAACOS) that urinary catheter payments increased from $153 million in 2021 to $2.1 billion in 2023, driven largely by seven companies accounting for the majority of 2023 spending.2
In 2024, CMS provided additional guidance that the A4352 code was replaced with A5057—ostomy pouch, drainable, with extended wear barrier attached, with built in convexity, with filter, (1 piece), each—while A4353 continued to be excluded under SAHS.3 In MSSP, the two HCPCS codes were excluded from all CY2024 calculations, similar to the 2023 policy. Under REACH, the codes were excluded from both the PY and benchmark years (BYs).4
CMS has stated its commitment to continue monitoring and adjusting expenditures in future CYs for SAHS if warranted but has not yet released guidance on addressing SAHS billing activity in CY2025.3