Best Practices for Hospital Z Codes
By Melinda Young
Hospital Case Management asked Tammy Love, RHIA, CCS, CDIP, director of coding classification and policy at the American Hospital Association (AHA) in Washington, DC, to answer a few questions via email about Z codes and what case managers need to know. The following transcript has been lightly edited for length and clarity.
HCM: What are the most essential things case managers should know about hospital Z codes and how to use them correctly?
Love: Social determinants of health (SDOH) describe problems or risk factors related to socioeconomic and psychosocial circumstances that may affect one’s health. Codes Z55-Z65 are used to document these circumstances in the patient’s medical record so they may be reported and addressed by case managers and other healthcare professionals. This is a dynamic set of codes that are updated frequently to expand code categories and allow code specificity so these important circumstances may be appropriately documented. In fact, the CDC released nine new Z codes in Q1 of this year.1
It is important that case managers are aware of where this documentation can be found in the health record so that it is readily available to assist them in managing a patient’s healthcare.
HCM: Have you observed any common mistakes or misunderstandings about using Z codes?
Love: The AHA has not observed any specific mistakes or common misunderstandings about the Z codes. However, providing education within the healthcare organization to all relevant team members that focuses on awareness and applicability of these codes is an important factor in the collection of these data. Z codes have historically been underused. A CMS report from 2021 showed that while the number of beneficiaries with Z code claims increased 12.6% from 2017 to 2019, only 1.59% of FFS [Medicare fee-for-service] beneficiaries had claims with Z codes in 2019.2
HCM: Do Z codes provide a greater incentive for health systems to invest in case management staffing and principles?
Love: There is substantial interest across healthcare systems in better understanding the needs of the patients and communities they serve. Data suggest that anywhere from 50%-80% of health outcomes are attributed to social factors. The Z codes are an important tool that can be used to capture information on the social drivers of health so case managers and others can better care for their patients and make appropriate referrals for social services. Additionally, capturing these data can better support assessment of patient risk and severity, which may impact future reimbursement and value-based payment models.
Oftentimes, hospitals may be limited in terms of physician capacity to screen for social determinants, but members of a patient’s care team, including case managers, can collect SDOH data in many cases. However, whether an organization invests more in case management staffing will be dependent on their unique circumstances, including the roles and responsibilities of other stakeholders in the community, their patients’ and communities’ specific needs, and the hospital’s or health system’s resources.
HCM: What are the latest trends/regulatory changes to Z codes? What are the most important things you believe case managers should know?
Love: As noted, it is important to gain an understanding of specific coding guidelines pertaining to SDOH ICD-10-CM codes. Staying abreast of specific AHA Coding Clinic advice and the current Official Guidelines for Coding and Reporting will provide insight as to the regulatory changes and any resulting revisions to these guidelines.
The AHA and others continue to work with CMS on standardizing screening tools for collecting these data and ensuring that social drivers of health are appropriately integrated in risk scores, reimbursement, and value-based payment models.
Additionally, [case managers should] stay informed of proposed and final payment rules published by the CMS each year for Inpatient Prospective Payment System [IPPS], Outpatient Prospective Payment System, and Physician Fee Schedule.
An important item to mention is that for the FY 2024 IPPS proposed rule, CMS [considered] the public comments in response to the FY 2023 IPPS/LTCH PPS proposed rule related to severity level changes to consider for FY 2024 rulemaking related to ICD-10-CM diagnosis codes that represent SDOH codes. As a result, CMS proposed changes to severity level designation for the following ICD-10-CM codes:
- Z59.00 (Homelessness unspecified) — Non-CC to CC for FY 2024;
- Z59.01 (Sheltered homelessness) — Non-CC to CC for FY 2024;
- Z59.02 (Unsheltered homelessness) — Non-CC to CC for FY 2024.
The FY 2024 IPPS final rule will include the outcome of the above noted proposals.
- Centers for Medicare & Medicaid Services. 2023 ICD-10-CM. Page last modified Sept. 6, 2023.
- Centers for Medicare & Medicaid Services. Utilization of Z codes for social determinants of health among Medicare Fee-for-Service beneficiaries. September 2021.
Hospital Case Management asked Tammy Love, RHIA, CCS, CDIP, director of coding classification and policy at the American Hospital Association in Washington, DC, to answer a few questions via email about Z codes and what case managers need to know.
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