Revenue Cycle

Q&A: Condition code 44 and physician review

Recovery Auditor Report, December 24, 2009

Q: I had a question about the requirement for hospital use of condition code 44. It is my understanding that there is a need for the involvement of two physicians: one who is the attending and the second who makes the medical necessity determination. We have discussed this requirement and the process at our physician-led utilization review (UR) committee; they have elected to delegate the medical necessity level of care recommendation (inpatient or observation) to the case managers. In other words, their comments were they do not know the Interqual criteria set and would prefer to defer to the expertise of the trained case managers. Their findings/recommendation would have to be in concurrence with the attending physician before condition code 44 is used. What are your thoughts on this?
A: This is a problem on several levels. First, the whole point of the review is that that second level physician review should take place on every case that fails Interqual. So the fact that the physicians do not know Interqual should not be a driving factor. There certainly are cases that fail Interqual that should be outpatient level of care, but there are also a good number of cases that fail Interqual that are correctly certified as inpatients. Second, there is nothing in the Conditions of Participation that allow the UR committee physicians to delegate their responsibility to a nonphysician (or someone who is not able to admit patients to the hospital). Transmittal 1803, released October 1, 2009, makes this extremely clear by indicating this change to the Manual:
For Condition Code 44 decisions, in accordance with 42 CFR §482.30(d)(1), one physician member of the UR committee may make the determination for the committee that the inpatient admission is not medically necessary. This physician member of the UR committee must be a different person from the concurring physician, who is the physician responsible for the care of the patient.  
I think that when they say "one physician member," they clearly mean "one physician member." This function is usually performed in real time by a physician advisor trained in CMS rules and regulations regarding medical necessity, and has access to evidence-based data that would allow them to risk stratify patients. Obviously, many hospitals have difficultly finding the person, or more likely persons, with the requisite skill sets and availability. Currently, approximately 25% of hospitals outsource this function.
Editor’s note: Thanks to Joe Zebrowitz, MD, executive vice president for Executive Health Resources, for answering this question.

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