I don't see CC in the tabular of my book (in the Z67 or Z05 sections) that have been putting the DRG in the 794. It must be a vendor issue.
The MS-DRGs for newborns are somewhat different. It is not an encoder error. Before I get into that, a note about reportable diagnosis codes. Always keep in mind that you only report the diagnosis codes that meet criteria for reporting as a principal diagnosis code or additional diagnosis code. Begin your determination of which diagnoses should or should not be reported by a review of Sections II and III for the criteria applicable to most inpatient encounters. Then consider also additional instruction elsewhere in the coding guidelines. For newborn encounters see also OCG I.C.16.a.6 for details on perinatal guidelines.
Z67 codes are status codes. As per OCG I.C.21.c.3, "A status code is informative, because the status may affect the course of treatment and its outcome."
Now, I will discuss the DRGs. The ICD-10-CM/PCS MS-DRG v34.0 Definitions Manual can be found at https://www.cms.gov/ICD10Manual/version34-fullcode-cms/fullcode_cms/P0001.html
Scroll down to MDC 15 and click. Next click on Normal Newborn. You will see a description of what is classified to DRG 795 Normal Newborn. First you'll see a list of principal diagnoses. Next on this page, you will see a list of secondary diagnosis. The heading title for the secondary diagnoses is rather interesting: "AND NO SECONDARY DIAGNOSES OR ONLY SECONDARY DIAGNOSES." That means if you have a newborn encounter and the secondary diagnosis code doesn't appear on this list then it will be classified to a different DRG.
At the top of the page you will find an arrow pointing up. Click on the arrow pointing up to take you back to the previous page. Now click on Neonate with Other Significant Problems. At the top of this page you will see an interesting statement: "Principal or secondary diagnosis of newborn or neonate, with other significant problems, not assigned to DRG 789 through 793 or 795."
Z67.40 does not appear on the list of the secondary diagnoses on the DRG 795 Normal Newborn page so it has to be classified to a different DRG. It is not classified to DRG 789 through 793 or 795, so it is classified to DRG 794. I am not saying that makes sense. I am just noting that it is not an encoder error.
To explain this, I used a resource that is available to the public on the Internet. There are resources available for purchase that make it easier to visualize the process with the use of decision trees. It has been a long time since I've used on of them so it might be better for others to provide examples of those resources available for purchase that they find useful.