The growing recognition of social determinants of health (SDOH) and their significant influence on patient outcomes is driving a push to integrate these factors into patient care plans. However, many physician practices are unaware of existing data infrastructures that can facilitate this crucial integration.
Dr. Margie Andreae, chief medical officer of billing compliance at Michigan Medicine, emphasizes the profound impact of SDOH. “The clinical care we provide only accounts for about 50% of the health factors that ultimately determine our health outcomes,” she states. “The other 50% are determined by social determinants of health, making them just as important to address if we want to improve the health of our patients.” This highlights the critical need to consider SDOH alongside traditional medical factors to achieve comprehensive patient care.
Recent updates to evaluation and management (E/M) outpatient and office-visit documentation, along with Current Procedural Terminology (CPT®) coding guidelines, now support the capture of SDOH data. These changes directly relate to determining the complexity level or duration of office visits. During the CPT and RBRVS 2022 Annual Symposium, Dr. Andreae, a member of the AMA/Specialty Society RVS Update Committee (RUC), explained that these coding modifications are significant because “payment for the visits will now incorporate the work that is already being performed by many and is now encouraged.” This shift in E/M coding acknowledges and incentivizes the crucial work of addressing SDOH in patient encounters.
With the implementation of the 2021 CPT E/M outpatient and office-visit coding guidelines, the level of E/M service is determined by either the total time spent on the date of the encounter or the complexity of medical decision-making (MDM). For E/M codes like 99204 and 99205 (for new patients with moderate to high MDM) and 99214 and 99215 (for established patients with moderate to high MDM), SDOH factors can significantly elevate the risk of complications, morbidity, or mortality. This is because SDOH can limit both treatment options and diagnostic capabilities.
Consider the example Dr. Andreae provided: a young man with a knee injury needing an MRI and orthopedic referral. His lack of health insurance and a low-paying job prevent him from affording these necessary steps. “Because you’re not able to get the additional data that you would like, this makes your management decisions more complicated and a higher level of risk,” Dr. Andreae clarified. In such cases, medical decision-making now recognizes “one undiagnosed new problem with an uncertain diagnosis,” classifying it as a moderate-level problem complexity due to the impact of SDOH. This integration of SDOH into E/M coding directly affects how patient care complexity is assessed and documented.
Nelly Leon-Chisen, executive director of coding and classification at the American Hospital Association, further highlighted the role of International Classification of Diseases 10th Revision codes (ICD-10) in addressing SDOH. ICD-10 Z codes, specifically categories Z55-Z65, are designed to identify SDOH factors influencing health status. These codes offer a valuable tool for physicians, hospitals, health systems, and payers to effectively track patient needs and develop targeted solutions for community health improvement. Coding SDOH using ICD-10 Z codes allows for a more comprehensive understanding of the factors impacting patient care beyond the clinical setting.
While the use of ICD-10 Z codes is currently voluntary, Leon-Chisen noted that organizations like the Centers for Medicare & Medicaid Services (CMS) and commercial payers have shown “great interest” in their adoption. Despite this interest, there are currently no direct financial incentives for utilizing SDOH codes. The most frequently used Z code, according to CMS data, is Z59.0, which indicates homelessness. Despite the documented impact of SDOH, the 2017 statistics reveal that only a small fraction (1.4%) of Medicare fee-for-service beneficiaries, approximately 467,000 out of 33.7 million, had claims including Z-code data.
Leon-Chisen emphasized the critical point: “if you don’t code it, you can’t count it—and it’s not showing up in the claims.” The broader vision is that consistent and widespread coding of SDOH will generate sufficient data to demonstrate that these factors contribute to higher service severity and intensity. This, in turn, could justify increased coverage and reimbursement for healthcare services that actively address patients’ social needs. Collecting SDOH data through claims is seen as the most straightforward method for payers to gain insights into these critical factors affecting patient populations. Ultimately, this data is essential to advocate for additional funding and resources to effectively address the social needs that profoundly impact patient health outcomes.
In conclusion, the integration of SDOH considerations into E/M coding and the utilization of ICD-10 Z codes represent a significant step forward in recognizing and addressing the holistic needs of patients. By acknowledging the profound impact of social factors on health outcomes within established coding frameworks, the healthcare system can move towards more equitable and effective patient care that considers the whole person, not just their medical condition. This evolution in E/M coding directly affects patient care by encouraging providers to account for and document SDOH, paving the way for improved resource allocation and targeted interventions to address health disparities.
