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Note: Compliance with Condition Code 44 - A practical approach

Medicare Weekly Update, April 14, 2009

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Editor’s note: Judith Kares, JD, CPC, regulatory specialist for HCPro, Inc., is the author of this week’s note from the instructor.

This week, let’s continue our focus on the so-called Condition Code 44 process. If followed carefully, this process would permit hospitals to convert what would otherwise be non-covered inpatient services under Part A to outpatient services under Part B. Once converted, presumably, these services would then be subject to the same terms and conditions of coverage as if they actually had been provided in the outpatient setting.

Our focus last week was on the technical requirements that must be met in order for the hospital to successfully convert the patient’s status from inpatient to outpatient. These requirements include the following:

• The decision to change status must be made by the hospital’s “Utilization Review Committee” (UR Committee) (one “member” of the UR Committee can make the decision, with the attending physician’s agreement; in all other cases, the decision must be made by at least two “members”);
• The change in status must be made prior to discharge or release of the patient and before the hospital has submitted a claim for the inpatient admission;
• A physician must agree with the decision;
• The physician’s agreement must be documented in the patient’s medical record; and
• The UR Committee must provide written notice to the hospital, the patient and the patient’s physician within two days (but not later than the patient’s discharge or release from the hospital) of the change and its impact on the patient, including financial liability for applicable deductible and coinsurance amounts.

Although Case Management or other Utilization Review staff will likely initiate the process, the hospital needs to assure that it meets all technical requirements. The best way to do this is to create a Condition Code 44 Change-in-Status Form (CC 44 Form). This will assure that all appropriate individuals are contacted and participate in the change in status process, as required. At a minimum, the CC 44 Form should include the following:

• A brief statement indicating that the hospital has decided to change the patient’s status from inpatient to outpatient, including its rationale for doing so;
• A statement indicating that the patient’s attending physician was informed and invited to participate in this decision;
• A statement indicating the impact of the change in status on the patient, including resulting financial liability for applicable deductible and coinsurance amounts;
• Three signature lines for the following individuals:
  • A “member” of the UR Committee (preferably an MD or DO, to assure that the individual is an official member of the UR Committee, as well as a physician, for purposes of the physician signature requirement). This signature line should indicate that the individual is signing the form for and on behalf of the UR Committee, and that he/she is a physician (an MD or DO);
  • The patient’s attending physician (certainly desirable, but not absolutely necessary, so long as a second member of the UR Committee signs the form, and assuming that at least one of the UR Committee members is a physician). This signature line should indicate that the individual is signing the form as the patient’s attending physician; and
  • A second “member” of the UR Committee (preferably an MD or DO, to assure the individual is an official member of the UR Committee, as well as a physician, for purposes of the physician signature requirement). This signature line should also indicate that the individual is signing the form for and on behalf of the UR Committee, and that he/she is a physician (an MD or DO).

You need at least two signatures on the form—that of one member of the UR Committee, along with the signature of either the attending physician or a second member. The original form should be retained in the patient’s medical record, with copies distributed to the patient and attending physician (which meets the hospital’s notification requirements), and a final copy should be retained in the records of the UR Committee. 

In addition, depending upon the nature of the services (e.g., observation), you may need additional physician orders, documentation in the medical record, etc., in order to meet whatever coverage requirements those particular services would have been subject to, if they had actually been provided in the outpatient setting. This appears to be what the CMS representative to whom Kimberly Hoy spoke several weeks ago was suggesting. (See Kimberly’s note in the March 31 Medicare Weekly Update for further discussion of this issue.)

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