While I have always emphasized the importance of putting all your client’s diagnoses on a claim – even the Z codes – this may be more important than you realize.

Although found in the DSM-5-TR, Z codes are typically not billable as primary or standalone diagnoses, except under EAPs or specific policies.  Because of this, clinicians may focus only on billable diagnoses like depression, anxiety, and adjustment disorders.  

Yet adding Z codes as secondary diagnoses to claims can be beneficial in many ways.  By painting a more comprehensive clinical picture, they can influence whether you are chosen for an audit by a health plan, whether sessions are approved, and even whether the health plan asks for money to be paid back.

In this article, I’ll review what Z codes are, give you lots of examples, and give you four really practical reasons why you should be including them on your claims, session notes, and treatment plans.

Let’s review: What are Z codes?   

Z codes are diagnosis codes listed near the back of the DSM-5-TR under “Other Conditions That May Be a Focus of Clinical Attention.” They help describe the real-life stressors affecting a client’s care, including concerns related to education, housing, finances, environment, relationships, and trauma or abuse history.  Some examples include:

• Z63.0: Problems in relationship with spouse or partner
• Z63.5: Disruption of family by separation or divorce
• Z63.4: Disappearance and death of family member (grief, loss)
• Z63.72: Alcoholism and drug addiction in family
• Z63.79: Other Stressful Life Events Affecting Family (e.g., family illness or separation)
• Z62.820  Parent (biological) child conflict
• Z60.3  Acculturation Difficulty
• Z56.0: Unemployment
• Z56.9: Problem Related to Employment, Unspecified (e.g., severe job dissatisfaction)
• Z65.3: Problems related to other legal circumstances (e.g., custody battles, lawsuits)
• Z62.812: Personal history of sexual abuse in childhood
• Z91.412: Personal history of adult sexual abuse

4 ways adding Z codes can be beneficial

Adding a Z code as a secondary diagnosis to a health care claim can be beneficial in many ways:

1. Supports medical necessity for care:  Health plans will audit your treatment based on “medical necessity” — whether they believe therapy is truly necessary.   Adding a relevant Z-code can make the clinical picture clearer.  For example, if you diagnose your client with an Anxiety Disorder, they may conclude that there is only a need for routine treatment. Adding Z63.5 (Disruption of family by separation or divorce) or Z56.2 (Threat of job loss) may help show what is driving the anxiety and why treatment is clinically appropriate.   It can even help shift a “routine” case to a “complex” case in the eyes of the insurance plan, reducing the chance of care denials.

2. Audit protection:  When you add Z codes on the claim, the additional information may even reduce the likelihood that the health plan will ask to audit your files.   For example, if a client meets the criteria for Major Depressive Disorder F32.9, adding Z56.0 (Unemployment) as a secondary diagnosis can speak volumes about why increased frequency of care or longer treatment lengths are justified –  without the health plan having to ask for your notes.

And if they do an audit, they will look for clinical consistency – and adding Z codes on claims, notes, and treatment plans shows you have consistently documented the full complexity of your client’s diagnoses and stressors.

3. Supports need for higher-level CPT codes or couples/family treatment:  If you do 60-minute sessions, couples/family therapy, or multiple sessions a week, documenting Z codes helps support that level of care.

• • CPT 90837:  If you regularly use 60-minute 90837 sessions, some plans will scrutinize these claims.  Adding Z codes on the claims can help show why the client’s clinical and environmental stressors make the longer session more clinically appropriate than a shorter one.  
  • CPT 90847: For couples or family therapy, adding Z codes can help explain why relational work is clinically necessary to treat the primary diagnosis.  For example, if your Identified Patient has a Generalized Anxiety Disorder, adding Z63.72 (Alcoholism and drug addiction in family) helps explain the need for couples or family treatment.
  • If you see clients more than once weekly, or the client is receiving both individual and family/couples therapy:  The addition of Z codes can help explain why more frequent sessions or multiple treatment formats make sense clinically.
    

4.   Shows you don’t use a default diagnosis:  Let’s say you had four clients with Major Depression.  Individualizing their diagnoses by adding appropriate Z codes to their claims can differentiate each case, showing that you aren’t automatically assigning the same diagnosis to every client.  

 How to find these codes

Z codes can be found in the DSM-TR-5 chapter “Other Conditions That May Be a Focus of Clinical Attention” (Page 715), or in the Appendix Index: Alphabetical Listing of Codes (Page 1241).  

But for those of you who don’t know where your DSM is (or true confession time, you never bought it), check out the free website  www.icd10data.com.   You can type a word into the search bar, such as “unemployment,” “acculturation,” “homelessness” or “burnout,” then choose the Z code with a green diamond in front of the code.  You may want to create a “cheat sheet” for the codes you use most often.  

Some final tips

• Be sure to put your Z-code (s) after your primary diagnosis/diagnoses.  You can add multiple Z-codes, if applicable.  
• Concerned about confidentiality?   You can select from hundreds of Z codes, ranging from vague to specific, to provide insurance plans with necessary case information without over-disclosing.
• When a client seeks therapy for a situational crisis like a painful divorce or grieving a loss but might not meet the criteria for a formal mental health diagnosis, check if the client meets the criteria for an Adjustment Disorder, with a Z-code secondary.  If not, contact the insurance to check coverage for Z codes as the primary diagnosis.
• At intake and throughout treatment, assess for stressors in the areas of finances, legal, housing, employment, education, and environment  Then be sure to briefly mention these regularly in your session notes.

The Takeaway

Even though Z codes usually are not billable on their own, adding them to your claims can give insurance plans context to help them understand your client’s situation.  They help show the complexity behind the primary diagnosis which may actually help prevent audits and can make a difference if the case is ever reviewed or audited. That’s why it is worth taking a few minutes at intake and throughout treatment to assess and document the environmental stressors affecting your client’s life.