How Z-codes could be eating into your medical savings


When a patient is referred to a pathologist or radiologist by their doctor for specific tests needed to correctly diagnose or determine how severe a specific condition is and the condition is a Prescribed Minimum Benefit (PMB), an emergency or on the list of chronic conditions, the cost should be covered from the risk pool (pool of funds) and not from the member’s savings, or if there are no savings, rejected.

Medical scheme claims are assessed according to ICD10 codes, a process which happens routinely without human intervention. If the ICD10 code does not indicate a PMB, emergency or chronic condition, the claim would be paid from the savings account or not at all. As no diagnosis has yet been made by the doctor, a PMB ICD10 code cannot be noted on the form by the doctor requesting the tests.

However, once the tests are done, the pathologist can only write a report, not diagnose the condition. Only the treating doctor can do that. The lab therefore sends a report to the doctor; but it submits the account for the tests directly to the medical scheme, with a generic or “Z” ICD10 code.

The Medical Scheme’s system does not recognise the ICD10 code as referring to a PMB, emergency or chronic condition and therefore doesn’t pay for it from the risk pool.

Most members don’t even notice that these accounts are being paid from their medical savings accounts which might be one of the reasons why some savings accounts are used up early in the year.

Correct benefit pool

The Council for Medical Schemes (CMS) says it is always the treating doctor who is responsible to provide the final diagnostic code and it may not be provided or changed by the scheme. “If the scheme changes the code, the patient is then actually diagnosed by a person (not necessarily a clinically trained person) who did not consult with the patient, which is not allowed and may lead to legal action.”


But the buck stops with the member

“The member should ensure that a diagnostic code is added on the account and remind the treating healthcare practitioner to provide the codes. Although healthcare practitioners submit accounts to medical schemes, the members are ultimately responsible to ensure submission of their accounts within 120 days after the day of service,” the CMS says.



Agility Health director of product development Dr Jacques Snyman says in the case of a follow-up of a previously diagnosed condition, the correct ICD codes are available. Doctors often supply them on the pathology request forms, “however these might not be captured by pathologists’ practices, who for convenience often simply use z-codes”.

He advises medical scheme members to confirm that the doctor enters the code on the pathology request form.

Snyman says Agility Health provides its client scheme members with a care-path for their specific disease, and their claims are decided on based on the care-path rather than the ICD code provided. “The care-path describes the frequency, type and numbers of clinical visits and tests usually associated with a specific diagnosis.” It also allows for the care-path to be updated should the patient need additional care or tests,” he says.

He advises members to ask their doctors to provide them with a list of their diagnoses and codes, as these are very useful when engaging with call centres from the schemes as well. “In terms of the rules of the scheme, it is a member’s responsibility to ensure claims are correctly submitted, which includes the use of the correct ICD code,” he says