CMS IPPS Proposed Rule: Expansion of SDoH Designations as CCs

In its Inpatient Prospective Payment System (IPPS) Proposed Rule for the 2025 fiscal year (FY), the Centers for Medicare & Medicaid Services (CMS) is considering a change in the severity level designation for the social determinants of health (SDoH) diagnosis codes denoting inadequate housing and housing instability from non-complication or comorbidity (Non-CC) to complication or comorbidity (CC).

Consistent with the annual updates to account for changes in resource consumption, treatment patterns, and the clinical characteristics of patients, CMS is recognizing inadequate housing and housing instability as indicators of increased resource utilization in the acute inpatient hospital setting.

“Inadequate housing” is defined as an occupied housing unit that has moderate or severe

physical problems, such as plumbing, heating, electricity, or upkeep issues. CMS describes concerns with patients living in inadequate housing by noting they may be exposed to health and safety risks that impact healthcare services, such as vermin, mold, water leaks, and inadequate heating or cooling systems.

Housing instability encompasses difficulties related to paying rent, overcrowding, frequent relocations, and/or other financial challenges associated with maintaining housing. While not directly citing from external sources, CMS asserts that studies have demonstrated moderate evidence linking housing instability to a higher prevalence of conditions such as overweightness/obesity, hypertension, diabetes, and cardiovascular disease, as well as poorer management of hypertension and diabetes, with increased acute healthcare utilization among individuals with these conditions (CMS-1808-P). Expanding on this impact, CMS suggests that these circumstances could lead to limited or no access to prescription or over-the-counter medications, inadequate storage facilities for medications, and challenges in adhering to medication regimens.

Based on an analysis of resource use data extracted from claims in the September 2023 update of the 2023 FY MedPAR file for seven ICD-10-CM diagnosis codes describing inadequate housing and housing instability, CMS is proposing to elevate the severity level designation of these codes from Non-CC to CC for the 2025 FY:

• Z59.10 (Inadequate housing, unspecified);
• Z59.11 (Inadequate housing, environmental temperature);
• Z59.12 (Inadequate housing, utilities);
• Z59.19 (Other inadequate housing);
• Z59.811 (Housing instability, housed, with risk of homelessness);
• Z59.812 (Housing instability, housed, homelessness in past 12 months); and
• Z59.819 (Housing instability, housed unspecified).

Evaluating the data in this category and selection for this change is a deviation from typical CMS practices for CC designation, as the quantity of these Z codes are minimal; however, CMS believes that this is likely related to the new releases of many of the subcategories in the Z59.00 category, as well as the lack of financial alignment.

CMS expects an increase in Z code utilization as a result of the IQR Social Drivers of Health initiatives. This change continues to demonstrate the commitment by CMS to health equity as well as whole-person care.