Policies that improve reimbursement for tracking these needs in the Medicare program could increase the number of older patients whose social needs are met.
CHICAGO, Sept. 30, 2021 - Only 1.3% of Medicare beneficiaries, or about 724,000 individuals, had their social needs tracked in their 2018 health care claims, according to new research from NORC at the University of Chicago.
Social determinants of health (SDOH) are the non-medical conditions of people’s lives—such as housing, food security, and air quality—that impact overall health. According to the World Health Organization, SDOH account for up to
55% of an individual’s health outcomes. In recent years, the Medicare program has implemented numerous initiatives to address beneficiaries’ SDOH.
SDOH are tracked in Medicare using Z codes—ICD-10-CM codes in reimbursement claims that document non-medical factors affecting a patient’s health. Providers are not reimbursed for such claims, however, creating a barrier to uptake. According to the NORC research team, experts and policymakers recommend expanding the use of Z codes, including implementing policies that reimburse providers for using Z codes, to ensure that patients’ social needs are tracked and met.
“Despite the health care system’s widespread focus on individuals’ social needs, few providers are using the existing tools to document patients’ social needs,” said Caroline Pearson, senior vice president at NORC. “Without better reimbursement or other incentives to encourage the use of Z codes, plans and providers will continue to struggle to identify and address unmet social needs.”
Social needs were more frequently documented for beneficiaries who are racially and ethnically diverse, enrolled in Medicare Advantage, and dually eligible for Medicare and Medicaid coverage.
While general use of Z codes in Medicare is limited, the social needs of some beneficiaries were more likely to be documented. Dual eligible beneficiaries are low-income or disabled individuals who also qualify for Medicaid coverage. These dual eligible beneficiaries were three times more likely to have Z codes documenting their social needs (3.2% of duals) than non-duals (1.1%). Diverse populations were also more likely to have documented social needs, with Black (1.8%) and Hispanic (1.6%) beneficiaries being more likely to have SDOH Z codes than whites (1.3). Finally, Medicare Advantage enrollees were slightly more likely (1.5%) to have documented Z codes than traditional Medicare Fee-for-Service (1.2%).
Use of Z codes uneven across the United States
The use of Z codes is also not distributed evenly across the country. Instead, their use is concentrated in select counties and particular health systems, such as areas with large health care systems near Boston and the San Francisco Bay area. The county with the highest proportion of beneficiaries with documented Z codes is Suffolk, MA (6%), where beneficiaries have access to large health care systems such as Massachusetts General Hospital and Boston Medical Center.
“Some hospitals and Medicare Advantage plans have encouraged their providers to begin using Z codes to identify beneficiaries with SDOH risks,” said Dianne Munevar, senior director at NORC. “Those efforts are likely driving higher rates of Z codes among Medicare Advantage enrollees, as well as geographic concentrations of Z codes around specific health systems.”
NORC produced an analysis of Medicare beneficiaries with documented social needs in their administrative claims. This Spotlight on Health analyzed summary statistics on key demographic fields of Medicare beneficiaries with SDOH-related Z codes (Z55-Z62, Z63-Z65) for Medicare Advantage and traditional FFS Medicare. NORC developed a heat map of the percent of Medicare beneficiaries with at least one SDOH-related Z code by county, highlighting counties with the top 5% share of beneficiaries with at least one SDOH-related Z code.
This analysis used the Centers for Medicare & Medicaid Services’ Master Beneficiary Summary File (MBSF) to analyze beneficiaries with at least one SDOH Z code in a 2018 claim or encounter record and 12 months of continuous enrollment in a calendar year. Comparisons assessed the proportional differences between summary characteristics among those with SDOH-related Z codes and those without SDOH-related Z codes. All statistical tests were performed at the 95% confidence level using the Chi-square test.
Z codes included in this analysis were Z55 (problems related to education and literacy); Z56 (problems related to employment and unemployment); Z57 (occupational exposure to risk factors); 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); and Z65 (problems related to other psychosocial circumstances).
The analysis presented here follows a recent NORC report for Better Medicare Alliance on Innovative Approaches to Addressing Social Determinants of Health for Medicare Advantage Beneficiaries. Read the full report
About NORC at the University of Chicago
NORC at the University of Chicago conducts research and analysis that decision-makers trust. As a nonpartisan research organization and a pioneer in measuring and understanding the world, we have studied almost every aspect of the human experience and every major news event for more than eight decades. Today, we partner with government, corporate, and nonprofit clients around the world to provide the objectivity and expertise necessary to inform the critical decisions facing society.
Contact: For more information, contact Eric Young at NORC at
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