Case Managers Could Use Z Codes More for Patient Care and QI
By Melinda Young
ICD-10 Z codes were created to document patients’ psychosocial and economic risks but are underused in hospitals, research shows.
- Only a small fraction of patient encounters includes data from Z codes.
- Z codes are not reimbursed by most insurance, and there are no mandates for documenting them.
- Researchers found housing needs were more likely to be documented with Z codes than were food needs and other social determinants of health.
Case managers, providers, and health systems underuse ICD-10 Z codes eight years after they were first introduced. These codes could provide a wealth of data to researchers and case management quality improvement projects. They still hold promise to be a way for providers to collect reimbursement for their work to help patients with their social determinants of health (SDOH).1-3
The Centers for Medicare & Medicaid Services (CMS) created Z codes for voluntary documentation of psychosocial and socioeconomic risks related to SDOH. One goal is to assist with risk-adjusted models.3
“The reason for these codes is to document [health-related] factors we know are important overall and to help us understand which individual factors are leading to increases in healthcare utilization and costs,” explains David T. Liss, PhD, a research associate professor in the division of general internal medicine at the Northwestern University Feinberg School of Medicine.
Yet, new research shows only a small fraction of patient encounters include Z code data.1-3 “What’s unique about Z codes is any individual on the care team can add a Z code, including case managers and social workers,” says Wyatt P. Bensken, PhD, lead study author and an adjunct assistant professor in the department of population and quantitative health sciences in the school of medicine at Case Western Reserve University in Cleveland. “The downside is they’re not reimbursable or billable. They are not used to change the severity of the visit.”
Z Codes Are Underused
Recently, CMS announced its 2024 Inpatient Prospective Payment System will recognize homeless diagnosis codes as a complication or comorbidity because this condition brings a higher average cost to care for homeless individuals.4 Subcategories of Z59.01 (sheltered homelessness) and Z59.02 (unsheltered homelessness) were added in 2021.4,5
Attention to SDOH has snowballed in recent years, and this trend continues to grow, Bensken notes. But it is not translating into widespread use of Z codes, even in EDs where patients often present with issues affected by SDOH.
Researchers found a low prevalence of social Z code documentation in EDs across the United States. For instance, Z codes were documented only 4.5 times per 1,000 ED visits for youth younger than age 18 years, and 7.6 times per 1,000 for adults age 65 years and older. Males were close to twice as likely to have a Z code as females. The geographical distribution of Z codes was highest in the West and Northeast and lowest in the South and Midwest. Also, urban teaching hospitals documented social Z codes at nearly three times the rate of rural hospitals and significantly more than urban, nonteaching hospitals.6
There are many reasons why Z codes are underused in EDs, says Melanie Molina, MD, MAS, an emergency medicine fellow in the National Clinician Scholars Program at the University of California San Francisco (UCSF).
“First, many folks are unaware that social risk Z codes exist,” Molina says. “Second, there’s a lack of clarity on who can document social risk Z codes and who’s responsible for documenting them.” Typically, health systems and hospitals do not create systematic processes to ensure Z codes are documented, she adds.
“Third, there are inadequate or nonexistent financial reimbursements that would incentivize their documentation,” Molina explains. “Finally, within the ED specifically, there are often time constraints and competing priorities.”
For example, EDs deal with critically ill patients. This can limit consideration of social risk Z code documentation, Molina notes.
Assigning a case manager or care coordinator to the ED could help address patients’ social risk factors, but it does not mean they should be solely responsible for documenting the codes. “I think it would be best done on the back end, after the ED visit notes are completed, when coding professionals are reviewing the notes to add ICD-10 codes to the chart,” Molina says. “The coding professionals can perhaps look through either the ED provider or case manager notes to extract and document social risk Z codes.”
Patient populations that include high percentages of people with social issues would appear to be ideal places for case managers and providers to use Z codes. But it is not happening.
Going by the Area Deprivation Index (ADI), which is a census tract that measures neighborhood SDOH, Florida has higher neighborhood deprivation than Maryland. Yet, Z codes are used less commonly in Florida than in Maryland.1
“It’s counterintuitive because you’d think the more they’re needed, the more they’d be used,” Bensken notes.
Bensken and colleagues found 2.1 times use of Z-codes in Maryland than in Florida. They also noted Z codes were more commonly used at major teaching facilities and for patients with Medicaid or no insurance.
The findings may suggest Maryland hospitals put better systems in place for documenting Z codes. For instance, the state uses an innovative healthcare system with demonstration projects and unique reimbursement, changing the way payment is made.
“That forward-thinking, innovative healthcare allows more attention to these social codes,” Bensken says. “Also, state-level policies give an indication of the climate of state and social risk and needs. Maryland has Medicaid expansion, and Florida does not.”
Other research shows housing needs are frequently identified among socioeconomic Z codes. But it is rare for healthcare providers to document Z codes for food, utility bills, and transportation.2
“We looked at a four-year, pre-COVID era to [study] Z codes, how often they’re used, and which patients were receiving Z codes,” Liss says.
Liss and colleagues pulled claims data from commercial plans for patients mostly younger than age 65 years and from Medicare Advantage plans for older patients between 2016 and 2019. Only 1.8% of eligible adults with private insurance were assigned ICD-10 Z codes about their community and social needs out of nearly 30 million claims.2
“We think, anecdotally, that we’re incrementally increasing the use of Z codes in recent years,” Liss says.
But use remains low, especially for male patients. “We saw higher rates amongst females and conditions that were either behavioral health or substance abuse-related,” Liss says.
It is possible Z codes have been used more since 2019 as awareness of SDOH has expanded. “Everything I’ve seen and heard is that the screening for these needs has gone up in these years,” Liss adds.
It also is possible case managers and other staff are screening for SDOH but are not documenting it in Z codes, Liss says. “Our strong hunch is there is underdocumentation,” he adds.
The lack of direct reimbursement is a disincentive to people taking the time to document with Z codes. Because the codes are not routinely used, there are unanswered questions about why some providers use them. For instance, are they used to identify the causes of healthcare encounters, or as a screening tool?
“If you were to conduct screening and ask patients to [complete] a questionnaire about food, housing, and other needs, you could use Z codes for screening for future healthcare needs,” Liss explains. “We don’t know if they’re being used retrospectively to document healthcare causes, as well as for screening.”
If Z codes are used for screening, then one finding about which SDOH were documented was puzzling. “We saw a lot related to housing, but we saw [nearly] zero Z codes for things like food insecurity, transportation, and utility bills,” Liss says. “It was surprising to us, and it leads me to a hunch that these were not used for screening.”
There is a lot of food insecurity in the United States. If the code were used for screening, there would be more Z codes related to food access, Liss adds.
All the social needs identified in Z codes are important for clinicians, case managers, public health officials, and others to know. “All the evidence shows that social determinants of health and social risk factors are the major drivers of the majority of most patients’ and healthcare populations’ needs,” Liss says. “These are factors impacting patients’ health. We know they’re important, but there’s still a lot we don’t know.”
The government could require Z code documentation, and case managers or care coordinators could help ensure they are captured in the data.
“Case managers or care coordinators certainly would be well-positioned to understand these needs of patients and could, therefore, document these needs through Z codes,” Liss says. “If they document it, they could use Z codes for quality improvement projects.”
- Bensken WP, Alberti PM, Baker MC, Koroukian SM. An increase in the use of ICD-10 Z-Codes for social risks and social needs: 2015 to 2019. Popul Health Manag 2023;26: 113-120.
- Liss DT, Cherupally M, Kang RH, et al. Social needs identified by diagnostic codes in privately insured U.S. adults. Am J Prev Med 2022;63:1007-1016.
- Centers for Medicare & Medicaid Services. Utilization of Z codes for social determinants of health among a sample of Medicare Advantage enrollees, 2017 and 2019. April 2022.
- Centers for Medicare & Medicaid Services. CMS proposes policies to improve patient safety and promote health equity. April 10, 2023.
- Tanicala A. CMS to recognize homelessness as a CC. HINT. April 25, 2023.
- Molina MF, Pantell MS, Gottlieb LM. Social risk factor documentation in emergency departments. Ann Emerg Med 2023;81:38-46.
Case managers, providers, and health systems underuse ICD-10 Z codes eight years after they were introduced. These codes could provide a wealth of data to researchers and case management quality improvement projects. They still hold promise to be a way for providers to collect reimbursement for their work to help patients with their social determinants of health.
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