Social determinants of health (SDOH) significantly impact Medicare spending variations, leading the Centers for Medicare and Medicaid Services (CMS) to incentivize providers to address these factors. CMS introduced ICD-10 Z codes for SDOH in 2015 and has proposed rules to increase reimbursements for treating patients with these codes. These measures aim to improve care quality and lower costs by addressing non-medical factors influencing health outcomes. Click here for article.
SDOH contribute up to 37% of geographic variation in Medicare spending, prompting CMS to incentivize providers to address these factors.
In 2015, CMS introduced ICD-10 Z codes for SDOH, but their usage remains low, with only 0.11% of Medicare claims using these codes in 2019.
The 2025 proposed IPPS rule aims to increase reimbursements for treating patients with Z codes related to homelessness, based on their higher resource use.
CMS policies, including the Inpatient Quality Reporting (IQR) program and new G codes for Community Health Integration (CHI) and Principal Illness Navigation (PIN), support the collection and use of SDOH data to improve patient care and reduce costs.
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