The Impact and Challenges of Sequencing Z Codes for Reimbursement 

 

October 20, 2023 | By Jennifer McNamara, CCS, CPC, CDEO, CPMA, CRC, COSC, CGSC, COPC, AAPC Approved Instructor | CEO, Healthcare Inspired, LLC

Every year we get updates to the Official Guidelines for Official Guidelines for Coding and Reporting, and this year for reporting year 2024 we received an update regarding Chapter 21 for Follow up codes Z08 and Z09. The accurate sequencing of these Z codes was emphasized in the guideline update by reminding us that they can be used for both medical and surgical treatment. There are times when another surgical treatment follow up can only be described by using Z08 or Z09, but be cautious with these codes because the key word used is “Completed” treatment. There are times when a patient may be following up on various conditions and treatment has not been completed yet. Reimbursement can be impacted if we do not understand the basic requirements of using these codes and other Z codes that trigger reimbursement. Let’s look at the various Z codes and their impact.

Purpose of Z codes

The purpose of Z codes is outlined in Chapter 21 of ICD10-CM “Factors Influencing Health Status and Contact with Health Services” section (Z00 – Z99) of the ICD-10-CM coding manual. They are used to provide medical necessity for various factors that influence an individual’s health status and encounters with the healthcare system. Unlike codes used for specific diseases, injuries, or external causes, Z codes are applied in circumstances where the primary focus is on health status, preventive care, and reasons for seeking healthcare services that may not be related to a specific illness or injury.

Primary Diagnosis Requirements:

As you know, reimbursement hinges on the triggering of payment based on the reason for the encounter or the primary diagnosis in many cases which makes it imperative that we understand which Z codes can serve as primary and which cannot. The guidelines specify encounter scenarios where Z codes should be used as primary diagnoses, such as general examinations, screening, and encounters for specific procedures like antineoplastic therapy. 

Aftercare Encounters:

Aftercare encounters, especially in the realm of orthopedics, introduce a layer of complexity to coding practices. The guidelines highlight instances where aftercare codes can be used as primary or secondary, with variances such as indicating a follow up for a healing fracture with the 7th character of the appropriate fracture code from Chapter 19 of ICD10-CM. So, in some cases if you wish to report that a condition other than a healing fracture is being followed up on you would use a code from the Z47 category that have very specific reasons for the aftercare follow up such as: Explanations of a Joint prosthesis or for after an amputation. It can be easy to think that since they completed the treatment you can just use trusty old Z09 but remember if another code exists that more accurately describes the scenario, we should be using it. If you work in Orthopedics, I strongly encourage you to read all the language and coding conventions in the Z47 category that will impact your proper coding and reporting.

Here is an overview for reference:

Z42 Encounter for plastic and reconstructive surgery following medical procedure or healed injury

Z43 Encounter for attention to artificial openings 

Z44 Encounter for fitting and adjustment of external prosthetic device 

Z45 Encounter for adjustment and management of implanted device 

Z46 Encounter for fitting and adjustment of other devices Z47 Orthopedic aftercare 

Z48 Encounter for other postprocedural aftercare 

Z49 Encounter for care involving renal dialysis

Z51 Encounter for other aftercare and medical care

Status and History Codes:

Status codes are important because they convey the ongoing story of a patient’s condition or procedure. While not recommended as primary codes, their accurate use is needed to further detail that adds medical necessity. They should not be used when their description is already inherent to another code from another chapter of ICD10 such as subcategory T86.2, Complications of heart transplant, where it would not be necessary to also report the status of a Heart transplant with Z94.1. For history codes it is very important to identify a historical conditional that is clinically relevant to the present encounter. Per ICD10-CM Guideline Section I.C.20.c.4 we are to sequence a primary “Encounter For” code before including a history code, ensuring the logical flow of information.

Social Determinants of Health: A Missed Opportunity?

The healthcare industry is witnessing a shift towards Value-Based Care, emphasizing data collection to show patient well-being. Despite the availability of codes in the Z55-Z65 range for reporting SDOH since 2015, there remains an underutilization of this valuable information. Financial factors, a prominent SDOH, significantly impact patient populations, yet the direct link between reporting these codes and reimbursement incentives remains elusive. 

Here is an overview of the categories available:

Z55 Problems related to education and literacy 

Z56 Problems related to employment and unemployment 

Z57 Occupational exposure to risk factors 

Z58 Problems related to physical environment 

Z59 Problems related to housing and economic circumstances 

Z60 Problems related to social environment 

Z62 Problems related to upbringing 

Z63 Other problems related to primary support group, including family circumstances 

Z64 Problems related to certain psychosocial circumstances 

Z65 Problems related to other psychosocial circumstances

Revenue Impact of SDOH:

While SDOH codes might not directly result in a reimbursement triggering event, recent developments underscore their influence on reimbursement. Evaluation and Management updates have in recent years recognized SDOH reporting under the moderate level of risk which highlights the potential impact on reimbursement for chronic conditions managed at this level. Accurate documentation is vital for revealing the true cost and resources a patient is expected to consume by utilizing these codes. Data tracked by zip code, and other factors that are reported such as their age, disability status and the severity of their Chronic conditions like Diabetes, Hypertension and CKD will impact their ability to receive care. If a patient does not seek care due to a financial hardship, their condition will worsen, especially if they stop rationing medication to pay a utility bill or to buy food. If they get sicker then it becomes more costly to treat them resulting in high cost to the health system and the ripple effects continue.

Let us focus on telling the complete story, putting together the clinical, procedural, and social aspects, to enhance the quality of care provided and ensure a fair and just reimbursement system. Here are some tips to improve revenue and communication across teams:

1. Provider Education:
   • Educating providers ensure understanding of Z codes’ role in comprehensive documentation.
2. Review Clear Documentation Guidelines:
   • Regularly review the guidelines that will help your care teams apply Z codes accurately during different encounter types.
3. Integration into EHR:
   • Optimization and integration prompts providers to use Z codes appropriately in electronic health records.
4. Regular Audits and Feedback:
   • Audits identify areas for improvement, and feedback reinforces accurate Z code usage.
5. CDI Programs:
   • Clinical Documentation Improvement programs will enhance collaboration and accuracy.
6. Updates on Coding Guidelines:
   • Regular communication keeps providers informed about evolving coding standards. Now is a great time to review any changes for 2024 and any that may have been missed in previous years.
7. Provider and Staff Engagement:
   • A culture of engagement promotes open communication on the importance of Z codes. Remember the ICD10-CM official guidelines advise  coders and physicians to have a collaborative relationship. 

References:

https://www.cms.gov/files/document/fy-2024-icd-10-cm-coding-guidelines.pdf

Your next steps:

1. Contact NAMAS to discuss your organization’s coding and documentation practices.
2. Read more blog posts to stay updated on the 2023 Revisions to the 2021 E&M Guidelines.
3. Subscribe to the NAMAS YouTube channel for more auditing and compliance tips!
4. Check out the agenda for the 15^th Annual NAMAS Auditing & Compliance Conference and register to attend!

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