Underutilization of ICD-10-CM Z Codes for Medicare Beneficiaries

CMS report is based on 2016-2017 data.

It’s been two years since the American Hospital Association (AHA) shouted from the rooftops that documentation by any interprofessional team would be accepted as validation to use the ICD-10-CM Z codes, as opposed to only documentation by physicians.

In the social determinants of health (SDoH) age, these Z codes are viewed as a logical way for healthcare organizations to recoup the massive costs incurred for treatment and hospitalization of admissions related to non-clinical psychosocial and socioeconomic needs. However, if the healthcare industry has learned one thing over the years, it is never to cloud an issue with logic.

The release of the January 2020 Centers for Medicare & Medicaid Services (CMS) Office of Minority Health Issue Brief reveals the glaring reality of how infrequently those ICD-10-CM Z codes are being used. In the issue brief, Z Codes Utilization among Medicare Fee-for-Service (FFS) Beneficiaries in 2017, a snapshot is provided:

Among 33.7 million total Medicare FFS beneficiaries in 2017, just 1.4 percent had claims with Z codes.
The five most utilized Z codes were:
- Z59.0 – Homelessness
- Z60.2 – Problems related to living alone
- Z63.4 – Disappearance and death of family member
- Z65.8 – Other specified problems related to psychosocial circumstances
- Z630 – Problems in relationship with spouse or partner
Of the 467,136 Medicare beneficiaries with Z code claims,
- 334,373 individuals (72 percent) had hypertension
- 248,726 individuals (53 percent) had depression
In addition, for this same population:
- 349,658 individuals (75 percent) were not dual-eligible
- 117,478 were dual-eligible (25 percent)
- 161,559 individuals (35 percent) were under 65 years of age.
Z59.0, homelessness, was the only Z code with a higher utilization for males than females.

There is one important fact to bear in mind about the results. The data is from 2016-2017. While not long ago, this was just as organizations were becoming aware of the dramatic financial implications of the SDoH, and potential value of the codes. However, it was still prior to the heavy industry emphasis for organizations to use the codes.

Even though CMS missed a prime opportunity to provide organizations a fiscal hand by approving Z59.0, homelessness, as a co-morbidity for the 2020 Inpatient Prospective Payment System (IPPS), the codes are of undeniable value to healthcare organizations. They speak to population health needs by providing valuable case mix complexity data to organizations, plus countless other fiscal imperatives (e.g., grants, cross-sector collaboration, mergers, and acquisitions).

Appropriate use of the ICD-10-CM Z codes will not only impact future reimbursement but all current advocacy efforts underway by entities to increase the codes available for use. Expanded utilization will also continue to force CMS’s hand in approving the codes’ reimbursement.