Sounds like you need to learn about how SAS macros work. The main thing to understand is that the macro logic just generates text that is then treated by plain old SAS the same as if that text had been typed as the original program.
Did you even have a macro to begin with in the original program that you are trying to update?
The snippet of code you included in your original code is normal SAS code that would be part of a DATA step. It is using macro VARIABLES to store values so that the code is little easier to edit, but it did not include any conditional logic (MACRO logic) that would require that it be part of a macro rather than open code.
The main problem with your attempt to modify the program is the LOGIC of what you are trying to do. You appear to want to test if one list is in another list. That syntax does not even exist. What did you mean by the condition (&dxlist in 'I420' 'I425' 'I426' )?
Are you asking if all of the codes in DXLIST are one of these three codes? Or perhaps the other way around, whether all three of these codes are in DXLIST?
Maybe you want it to be true when any of the codes in DXLIST are in the other list?
If you look at the logic of your original data step code you can see that what you need to do is index over one of these lists and compare an individual value from that list to the other list.
If you cannot use the IN operator you could probably do what you want using the INDEXW function instead, but you will probably need to remove all of those quotes. For example you could replace ('XYZ' in ('123','abc','XYZ')) with indexw('123 abc XYZ','XYZ').