Z Codes (ICD-10)

This article contains information that is helpful for Headway providers. If you are a client and have questions, check out our support articles for clients!

Z Codes are very important particularly for social determinants of health. It is encouraged to keep this information (Z codes) as a secondary code for the purpose of data collection to better inform quality of care.

What are Z Codes?

Z codes are ICD-10 codes indicating “Factors influencing health status and contact with health services” and subcategory “Persons with potential health hazards related to socioeconomic and psychosocial circumstances”.   

Who decides on Z code limitations?

Most of the limitations to the use of Z Codes are set by the payers.  Some Z codes are limited by the level of licensing of the provider.  CMS (Center for Medicare Services) usually leads the inclusion and exclusion rules and other insurance payers often follow.  

Why did you make this change?

When a claim includes this code, it is to be used along with a primary diagnosis code that describes the disorder, illness or injury.

The “Z” code is secondary and falls within a broad category labeled “Factors Influencing Health Status and Contact with Health Services” and subcategory “Persons with potential health hazards related to socioeconomic and psychosocial circumstances”.   For this reason this one code as primary, if it is a Z code, does not support medical necessity.

I’ve been coding this way and I haven’t had a denial– why do I need to make this change?

Although payers may have paid some of these claims, the Z code does not indicate medical necessity. Insurance companies may or may not “catch” this error during initial claims processing.

If they catch the error, they will deny the claim.

If they don’t catch the error, they might never “reverse the decision." However, these claims are at risk for review– sometimes years after the date of service.

What happens to my previous claims that were denied for Z Code use?

If you have had denied claims as a result of a Z Code, we may reach out to you and ask what diagnoses you would like to use as the primary diagnosis and resubmit your claims.

Ideally, with the Z code rules in place, we will prevent denied claims so that there will be no need for you to submit new information to correct the claims.

How do I determine which diagnosis is most appropriate?

Often there are F codes that describe a symptom that would accurately represent the clinical presentation for which you might have only used a Z code.

Although we cannot recommend a Diagnosis code for a primary Mental, Behavioral and Neurodevelopmental Disorder (F10-F99). Following each of the more commonly used Z codes below are some examples of primary diagnosis codes that have been used by other providers with the secondary Z codes.

For Z56.9  - Unspecified problems related to employment (includes Occupational Problems NOS):

For Z60.0 - Problems of adjustment to life-cycle transitions (includes Empty nest syndrome, Phase of life problem, Problem with adjustment to retirement)

For Z63.0 - Problems in relationship with spouse or partner (Relationship distress with spouse or intimate partner)

For Z63.4 - Disappearance and death of family member (Assumed death of a family member, Bereavement)

Will the insurance company be suspicious if I change my diagnosis for a regular client?

No, insurance companies will not be suspicious if you change the diagnosis code for a regular client. As you work with a client you often will gain insight which will result in clarity and more specificity for a diagnosis code. There are also other reasons and presentations that may contribute to a change of codes.

The codes that are primary codes are more specific, and the Z code can remain as a code, just not the first listed!

What are the benefits of coding according to the ICD-10 rules?

As a provider you are the key responsible person for determining medical necessity. Using a “disorder, illness or injury” code as a primary diagnosis demonstrates medical necessity which would then be reflected in your notes.

Using the ICD-10 enables greater specificity in identifying mental health conditions. It also provides better data for measuring and tracking mental health care utilization and the quality of patient care.

This means that:

• You'll have fewer denials.
• As you work within the ICD-10 rules, your sessions are billed “cleaner” and there will be fewer requests for notes or additional information from the insurance companies.

What changed?

Nothing! The Z code guidelines are not new and they are being inconsistently enforced. As payers update both their policies and their claims processing we’ll see more requests for documentation to validate medical necessity for the services provided that are attached to a “Z code” diagnosis. 

What do the DSM and ICD have in common?

ICD and DSM are identical in some ways and differ in others. However, both systems represent codes disorder, injuries, and diseases which provide medical informatics such as automated decision support, claims process in billing, statistics on morbidity & mortality, and social determinants of health.