Underutilization of Z-Codes: Impact on Documenting Social Determinants of Health


The utilization of Z-codes for recording social determinants of health is notably low, as indicated by two distinct studies. Although these codes were integrated into ICD-10 to aid healthcare establishments in documenting and monitoring social determinants of health, recent findings published in Health Affairs Scholar highlight their underutilization.

The initial study, conducted by University researchers, revealed a significant underuse of Z-codes across a broad spectrum of social determinants of health, despite their potential usefulness. While more than half of the surveyed hospitals employed the Z-code for addressing housing insecurity, their application remained sparse for other determinants.

In a separate investigation by experts from the Colorado School, it was discovered that Z-code utilization was 50 percent more prevalent among Medicaid recipients compared to those commercially insured. Additionally, these codes were most frequently utilized within mental health or psychiatric contexts.

Z-codes were introduced into the healthcare coding system in response to the industry’s heightened focus on social determinants of health (SDOH) within the ICD-10 framework. These codes offer healthcare providers a means to record an SDOH diagnosis for patients, aiding in the documentation of these factors, particularly as payment models increasingly integrate quality measures associated with identifying and tackling SDOH.

Covering various common SDOH, such as education, employment, housing, social environment, and others, Z-codes present a structured approach to capture these determinants. However, despite their potential benefits, data indicates their underutilization. According to a study by NYU researchers involving nearly 6,000 US hospitals, approximately 56 percent utilized at least one Z-code for one patient annually, yet the diversity in Z-code types remained limited.

The predominant Z-code during the study’s assessment period from 2017 to 2021 was Z59, linked to housing and economic circumstances, utilized by 56 percent of the observed hospitals. Conversely, fewer than 10 percent of hospitals employed other Z-code types. The researchers noted a higher likelihood of Z-code usage in general medicine hospitals, teaching hospitals, larger health system affiliates, and medium to large-sized hospitals.

The researchers highlighted the insufficiency in healthcare settings regarding the comprehensive understanding and attention given to Social Determinants of Health (SDOH). They proposed the necessity for hospitals to adopt extensive training programs that prioritize all SDOH domains, advocating for robust systems and partnerships to address the multifaceted non-medical needs patients might present, extending beyond housing.

Additionally, the second study conducted by researchers from CU Anschutz and Johns Hopkins mirrored these findings. It revealed a notably low utilization of Z-codes, with variations observed in the demographic distribution among patients receiving these codes in their medical records.

Analysis demonstrated that Medicaid patients exhibited a 50 percent higher Z-code utilization compared to commercially insured patients. This trend could potentially be linked to the higher likelihood of SDOH experiences among Medicaid patients, although the available data didn’t delve deeply into this aspect. Moreover, Medicaid patients tended to receive Z-codes associated with economic hardships, while commercially insured patients were more inclined to receive those linked to social relationships.

Furthermore, disparities surfaced concerning the settings where patients received Z-code documentation in their medical records. Mental health and psychiatric settings emerged as the most common, yet there were distinctions based on insurance type. Medicaid patients were more prone to receiving Z-codes in inpatient settings, while commercially insured patients predominantly received them in outpatient settings.

The primary concern highlighted in the study remains the overall low utilization of Z-codes. According to the study’s lead author, an assistant professor and health economist at the Colorado School of Public Health, the imperative lies in healthcare offices being able to identify and properly document the social factors impacting a patient’s health.

A statement from a leading education institute health economist emphasized the critical need for healthcare offices to address social factors impacting health. However, the underutilization of the system designed to track these factors is a clear issue that demands attention. The researchers hope their findings can guide efforts to address this gap.

To encourage wider adoption, the experts suggested integrating Z-codes into specific quality payment models and 1115 waiver programs. Additionally, they stressed the importance of enhanced provider education to drive increased utilization of these codes.