Data Reporting Limitations Need to Be Addressed When Including SDOH Z Codes on Medical Claims

While institutional and professional medical claims accommodate up to 25 and 12 ICD-10-CM diagnosis codes respectively, experts say this isn’t always enough space to meet new and emerging value-based payment and quality measure requirements. That’s especially true when you start adding Z codes for social determinants of health (SDOH) that have continued to expand in specificity and scope since they were first introduced in 2016.

This expansion comes in the wake of an increased focus on health equity and reducing healthcare disparities. As of January 1, 2024, the Centers for Medicare and Medicaid Services (CMS) started requiring hospitals to screen inpatients for five specific SDOH domains: food insecurity; housing insecurity; interpersonal safety; transportation insecurity; and utilities. The agency also introduced two inpatient quality reporting measures for SDOH — screening for SDOH and positive rate for SDOH — and began paying for SDOH screening via a new code, HCPCS code G0136.

In addition, risk-based payment models continue to evolve, and Z codes will play an important role, says Dawn Carter, BSBA, CPC, CRC, CPMA, CDEO, CPCO, CSPO, director of product strategy at Centauri Health Solutions in Scottsdale, AZ. “Right now, risk models don’t include these codes, but work is ongoing to determine how social risk will be captured,” she says. “In addition, CMS is already using them for health equity summary scores and the health equity index. Payers need providers to report these codes, so they get a score that accurately captures the risk of their members.”

Developed for Medicare Advantage plans, the health equity summary score is a barometer of the quality of care delivered to patients with specific race, ethnicity, dual-eligibility, and low-income status characteristics. The health equity index summarizes performance on Star Ratings measures among individuals with specific social risk factors.

Technology is also an important driver of increased Z code capture. More specifically, artificial intelligence-enabled tools and terminology service mapping technologies make it easier than ever to help detect and capture SDOH information from physician notes, problem lists, and patient histories, Carter says.

Addressing Medical Claim Limitations

However, experts agree that current-day institutional and professional claims post a concerning barrier to data integrity. In the FY 2024 IPPS final rule, CMS responded to commenters asking for additional instruction on how to prioritize the use of SDOH diagnosis codes to ensure that all the medical diagnoses that govern mortality and readmission rates are also captured. A few commenters suggested that CMS consider expanding the number of diagnosis codes that can be submitted or designing a way to report Z codes separately from other diagnosis codes on the claim form. Ultimately, the agency said to submit proposed changes directly to the National Uniform Billing Committee (NUBC).

“NUBC will take its lead from the X12 committee that deals with the technical specifications of the 837 electronic claim transaction,” says Carter. “It’s hard to say who will act first — NUBC or the X12 committee.”

In the absence of more expansive claim forms, organizations can take several steps to promote data integrity.

It starts with ensuring your electronic health record (EHR) vendor can accommodate as many diagnosis codes as possible. “If your (EHR) can’t work with you to accommodate additional codes, it might be time to look for another vendor,” Carter says. “Health plans may eventually profile providers relative to how many SDOH codes they report because it affects their health equity score and other metrics, and a system issue will not be an excuse for not reporting these codes.”

Next, organizations should develop a policy that identifies which SDOH codes are a top priority to send to payers. “When it comes down to those last few available slots on a claim, coders need to know what’s most important,” says Keisha Tolbert, MA, RHIA, CHPS, director of practice advancement at AHIMA.

For example, at Denver Health, medical coders can capture up to 99 diagnosis codes in the EHR. They code all relevant SDOH codes for internal use, but they don’t report all of the codes to payers, says Hollie Gonzalez, RHIT, director of hospital and physician coding services. ICD-10-CM code Z59 (homelessness), however, is one exception. “We have always picked this up, but now we are hypervigilant about it because it’s a [complication and comorbidity]. We sequence it higher, so it lands on the medical claim,” she adds.  

Organizations may also decide to include SDOH codes on medical claims when those codes reflect circumstances that directly impact patient care and outcomes (e.g., food insecurity or lack of transportation) as well as SDOH codes that might convey the prevalence of certain social determinants and help justify why payers should cover a particular service (e.g., diabetes prevention) or pay for certain types of providers such as community health workers.

Organizations should make these decisions with key stakeholders at the table, says Tolbert. This includes the health information (HI) director, coding director, quality director, chief nursing officer, case management director, chief of medical staff, clinical support system analysts, and others.

Finally, when a patient has more than the allowable number of diagnosis codes, Carter says organizations can — and should — split the medical claim. “A claim system can be modified to do this splitting automatically via a rule,” she says. “It sounds technically difficult to do, but it’s not.”

She provides this guidance: Report HCPCS code G0136 with all relevant Z codes on a separate medical claim. CMS now permits providers to use this code specifically when administering an SDOH screening, and the code aids in tracking screening utilization for health equity metrics. Some payers may also permit a separate claim with CPT code 99499 (with a zero-dollar charge) and all relevant Z codes.

“Not capturing all codes is a great disservice to patients who require care coordination in addressing their SDOH. Documenting and collecting it but not putting it on the claim is better than nothing, but the government and other entities must have a way to see the prevalence of these conditions in the population,” says Carter. “Those claims are what tells the government and other entities about utilization of services and who needs services and what kind. If data integrity is a priority, organizations will make the necessary changes to their systems to ensure the codes are submitted.”

HI professionals can help their organizations make informed decisions about how and when to report Z codes for SDOH on medical claims, experts say. The goal is to promote data integrity and help meet strategic goals for health equity.

Lisa A. Eramo, MA, is a freelance healthcare writer based in Cranston, RI.