Coding for Social Determinants of Health: The New Rules for 2023 (“Z” codes)
September 5, 2023
In last week’s edition of Coffee & Coding, we began a dive into Social Determinants of Health (SDOH)—why they’re increasingly important and how they impact our work. Now let’s turn to the new rules for recording SDOH in patient encounters so you can accurately bill for them.
SDOH-related diagnosis codes—the “Z” codes—range from Z55 – Z65. Any provider (physicians, physician assistants, nurse practitioners) can apply them. Here’s a breakdown1 of these codes covering a range of non-medical issues that affect health status:
- Z55 – Problems related to education and literacy
- Z56 – Problems related to employment and unemployment
- Z57 – Occupational exposure to risk factors
- Z58 – Problems related to a physical environment
- Z59 – Problems related to housing and economic circumstances
- Z60 – Problems related to a social environment
- Z62 – Problems related to upbringing
- Z63 – Other problems related to a primary support group, including family circumstances
- Z64 – Problems related to certain psychosocial circumstances
- Z65 – Problems related to other psychosocial circumstances
These are ICD-10 Diagnosis codes and are not documented in the CPT Procedural portion of the charges. That raises the question: If the Z-codes do not affect the office/hospital procedural charges, why should it be important for a physician to document these?
The answer: As we noted previously, social determinants of health can impact a patient’s health more than the healthcare services they receive. However, studies have shown that only a small fraction of physician practices and hospitals in recent years were screening patients for SDOH.
Starting in 2023, providers are required to follow new Social Determinants of Health (SDOH) quality measures.
New Measures for Hospitals in 20232
On August 1, CMS released new Social Determinants of Health (SDOH) quality measures in the 2023 Medicare Hospital Inpatient Prospective Payment System rule. Under these measures, hospitals must report both (1) the percentage of their patient population that undergoes screenings for different SDOH factors and (2) the number of patients who screen positive within each specific category.
The new measurements encompass the screening and identification of health-related social needs at the individual patient level. These needs include food insecurity, housing instability, transportation requirements, challenges with utilities, and interpersonal safety. By pinpointing such unmet needs, hospitals are better equipped to provide comprehensive care, addressing factors that frequently play significant roles in health outcomes.
Changes for Health Plans in 2023
The Healthcare Effectiveness Data and Information Set (HEDIS) is a crucial tool utilized by over 90% of health plans in the United States to gauge their performance across vital aspects of care and service. Given its widespread adoption and precise metrics, HEDIS facilitates plan-to-plan comparisons. To ensure its ongoing relevance, the National Committee for Quality Assurance (NCQA) has instituted an annual evolution process for the measurement set through its Committee on Performance Measurement.
For the 2023 measurement year, NCQA has introduced revised quality measures within the HEDIS framework. This newly introduced measure encourages health plans to pinpoint and address their members’ unmet food, housing, and transportation needs.
2 Remington Report & Care Continuum Think Tank, “2023 Providers Are Responsible for Social Determinants of Health Quality Measures,” 2023 Providers are Responsible for Social Determinants of Health Quality Measures » Remington Report
For Medicare MCOs
Federal rules now require Medicare Managed Care Organizations (MCOs) to conduct an initial screening within 90 days of member enrollment. States increasingly require MCOs to identify SDOH needs in screenings. Some states also contractually require MCOs to either encourage or require their provider networks to incorporate needs screenings, and others require MCOs to reimburse providers for these.
Some recent trends in SDOH state requirements:
- Numerous states mandate that Managed Care Organizations (MCOs) or provider networks screen enrollees to identify SDOH requirements.
- States increasingly stipulate that MCO care management initiatives integrate SDOH considerations, fostering collaboration with community-based organizations and facilitating connections to social services and assistance.
- Requests for Proposals (RFPs) include directives for MCOs to infuse SDOH aspects into their Quality Assessment and Performance Improvement (QAPI) programs, along with the obligation to offer SDOH training to their personnel.
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CPC, CFPC, CEMC
Senior Manager, Regulatory and Coding Compliance