Compliant capture of SDOH and chronic conditions a healthy imperative

We know about the bad examples. 

 

Insurance companies adding diagnoses solely to inflate risk scores and payment. We’ve seen the Office of Inspector General (OIG) audit reports, and a recent damning story in the Wall Street Journal (see below).

 

Fraud should be called out, fined, and punished, when it occurs.

 

But let’s pause for a minute to talk about the good. And perhaps even defend Medicare Advantage and what it does well.

 

Insurance companies, payers, hospitals underreport diagnoses too. And that does no one any good, including the patient.

 

Social determinants of health should be captured, as should chronic conditions.

 

Doing so accounts for true patient complexity and leads to a healthier patient. Capturing these conditions can control costs by moving the treatment upstream and not letting underlying conditions fester, or patients with housing instability vanish and miss appointments.

 

CMS is pushing for value-based care, moving treatment up the chain and out of less costly settings. That means capturing conditions and starting treatment before chronic conditions and SDOH bloom into acute life-saving emergencies.

 

Not that we need confirmation, but CMS has data that shows that obese patients with diabetes consume more resources. It also has data to confirm that patients who are homeless or suffering from housing instability consume more resources, too. 

 

Here’s what CMS has to say in the 2025 IPPS final rule of housing instability (as captured by the Z59 code series):

 

“Similar to homelessness, inadequate housing and housing instability are circumstances that can impede patient cooperation or management of care, or both. In addition, patients experiencing inadequate housing and housing instability can require a higher level of care by needing an extended length of stay.

 

As discussed in the proposed rule, housing instability encompasses a number of challenges, such as having trouble paying rent, overcrowding, moving frequently, or spending the bulk of household income on housing. These experiences may negatively affect physical health and make it harder to access health care. Studies have found moderate evidence to suggest that housing instability is associated with higher prevalence of overweight/obesity, hypertension, diabetes, and cardiovascular disease, worse hypertension and diabetes control, and higher acute health care utilization among those with diabetes and cardiovascular disease.”

 

Why shouldn’t SDOH and its associated chronic conditions be captured—every time?

 

You have to be compliant, of course. Mining for prior homeless states for housed patients should be an obvious no-no. In-home nurse assessments are risky.

 

But active conditions and current patient states? Get them documented and coded. 

 

A recent OIG roundtable conversation on YouTube (link below) presents the case fairly—for both sides, including Medicare Advantage organizations.

 

One of the panelists raised a great point that capturing these conditions is not enough. Capture must then be communicated back to the provider so that they can be added to the plan of care. For example, if a CDI or coding reviewer captures a missed diagnosis of HIV, that should be communicated to the patient’s PCP, who could then proscribe appropriate treatment (antiretroviral medication).

 

This closes and completes the loop.

 

Norwood is your compliance partner

 

Need help with a code audit, or compliant depiction of patient risk? Contact us at solutions@norwood.com 

 

References

• CMS, 2025 IPPS final rule
• Wall Street Journal, Insurers Pocketed $50 Billion From Medicare for Diseases No Doctor Treated
• OIG Roundtable 94: Is Adding a Diagnoses to a Med. Advantage Patient FWA or Positive Step in SDOH?