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 $2.1 billion in 2023, driven largely by seven companies accounting for the majority of 2023 spending.2
In 2024, CMS provided additional guidance that the A4352 code was replaced with A5057—ostomy pouch, drainable, with extended wear barrier attached, with built in convexity, with filter, (1 piece), each—while A4353 continued to be excluded under SAHS.3 In MSSP, the two HCPCS codes were excluded from all CY2024 calculations, similar to the 2023 policy. Under REACH, the codes were excluded from both the PY and benchmark years (BYs).4
CMS has stated its commitment to continue monitoring and adjusting expenditures in future CYs for SAHS if warranted but has not yet released guidance on addressing SAHS billing activity in CY2025.3
Anomalous billing patterns observed in recent healthcare claims data
We identified anomalous 2025 Q3 billing patterns in the 100% Innovator Research Medicare fee-for-service (FFS) DMEPOS claims, with a significant increase in spending on HCPCS code A4352, surpassing the 2023 levels that CMS previously classified as SAHS billing activity. Figure 1 shows monthly nationwide paid amounts on DMEPOS claim lines billed with HCPCS code A4352 by incurred month.
Figure 1: Total paid amounts ($M) by month on HCPCS code A4352 claims
The significant change in total paid amounts is driven by a small group of tax identification numbers (TINs). Figure 2 displays, by month, the proportion of nationwide spending on HCPCS code A4352 attributed to these TINs, with those representing a small share (<1% total 2025 spend) grouped into “All Other TINs.” As shown, three organizations/TINs account for almost 95% of nationwide billing to this code by September 2025 and commence their billing to a large degree in April 2025, when we begin to see a large increase in the nationwide total paid amount.
Figure 2: TIN share of nationwide spending on HCPCS code A4352 claims (2025)
Figure 3 shows the trends in paid amounts for HCPCS code A4352 claims by beneficiary state from 2024 to 2025. While increases were observed in every state, some states trended more than 50 times their 2024 spending, indicating that the significant increase in billing could have regional impacts.
Figure 3: Statewide 2024 to 2025 paid trends on HCPCS code A4352 claims
The surge in billing activity under HCPCS code A4352: Implications for ACOs
It will be important for ACOs taking risk for total cost of care to be aware of the significant increase in billing activity under HCPCS code A4352 and to monitor changes in billing of this code over time. Beginning in January 2026, ACOs should consider tracking the two new HCPCS codes established by CMS to break out hydrophilic catheters from A4352 (A4296 and A4297) as some of the utilization in the existing code may shift to the new codes.5 When monitoring these trends, the Local Coverage Determination (LCD)6 should be referenced to understand coverage criteria.
While the increase is clearly significant, further investigation is needed to determine if the billing meets the criteria of being anomalous and highly suspect and if HCPCS code A4352 will be eligible for SAHS in CY2025. ACOs should continue to monitor the billings associated with their attributed population to ensure the validity of these claims and address any material catheter spending where appropriate.
1 Medicare program: Mitigating the impact of significant, anomalous, and highly suspect billing activity on Medicare shared savings program financial calculations in calendar year 2023, 42 C.F.R. § 425 (2024). Retrieved February 27, 2026, from https://www.federalregister.gov/documents/2024/09/27/2024-22054/medicare-program-mitigating-the-impact-of-significant-anomalous-and-highly-suspect-billing-activity.
2 Tong, N. (February 14, 2024). 'A giant unknown': Dissecting the catheter fraud scheme for ACOs. Fierce Healthcare. Retrieved February 27, 2026, from https://www.fiercehealthcare.com/payers/giant-unknown-what-alleged-2b-medicare-catheter-fraud-scheme-means-acos.
3 Adjustments to mitigate the impact of significant, anomalous, and highly suspect billing activity on Shared Savings Program financial calculations involving calendar year 2024 or subsequent calendar years, 42 C.F.R. § 425.672 (2024). Retrieved February 27, 2026, from https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-425/subpart-G/section-425.672.
4 Centers for Medicare and Medicaid Services. (December 3, 2025). ACO REACH model performance year 2026 model update – quick reference. Retrieved February 27, 2026, from https://www.cms.gov/priorities/innovation/aco-reach-model-performance-year-2026-model-update-quick-reference.
5 Centers for Medicare and Medicaid Services. (n.d.). Centers for Medicare & Medicaid Services’ (CMS’) Healthcare Common Procedure Coding System (HCPCS) Level II final coding, benefit category and payment determinations: First biannual (B1), 2024 HCPCS coding cycle, p.13. Retrieved February 27, 2026, from https://www.cms.gov/files/document/2024-hcpcs-application-summary-biannual-1-2024-non-drug-and-non-biological-items-and-services.pdf.
6 CMS’s LCD for Urological Supplies is available at https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?LCDId=33803.