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Tip: How to use condition code 44 to change patient status

Patient Financial Services Weekly Advisor, March 25, 2005

Editor's note: This week's tip is provided by Valerie Rinkle, MPA, revenue cycle director for Asante Health System in Medford, OR:

Facilities can change a patient's status through the use of condition code 44 (inpatient admission changed to outpatient), effective April 1, 2004. This is for use on outpatient claims only, when the physician ordered inpatient services, but upon internal utilization review (performed before the claim was originally submitted), the hospital determined that the services did not meet its inpatient criteria.

Medicare last September released Transmittal 299 (click here) which describes how a hospital may change a patient's status from inpatient to outpatient. The Transmittal also describes the appropriate use of condition code 44 in Form Locator (FL) 24-30, or its electronic equivalent, on outpatient claims (type of bill 13X, 85X).

For cases in which a hospital utilization review committee determines that an inpatient admission does not meet the hospital's inpatient criteria, the hospital may change the beneficiary's status from inpatient to outpatient and submit an outpatient claim (13x, 85x) for medically necessary Medicare Part B services that were furnished to the beneficiary, provided all of the following four conditions are met:

1. The change in patient status from inpatient to outpatient is made prior to discharge or release, while the beneficiary is still a patient of the hospital;

2. The hospital has not submitted a claim to Medicare for the inpatient admission;

3. A physician concurs with the utilization review committee's decision; and

4. The physician's concurrence with the utilization review committee's decision is documented in the patient's medical record.

When the hospital determines that it may submit an outpatient claim according to the conditions described above, treat the entire episode of care as though the inpatient admission never occurred. Bill it as an outpatient episode of care.

Due to these new requirements, hospitals are revisiting their operational processes for case management services. In addition, hospitals are advised to provide re-education to physicians regarding what constitutes inpatient status v. observation status.

Therefore, the provider in the above instance could not submit their claim with condition code 44, since the change in patient status was not made prior to release. Consult your FI for specifics on how to handle this claim.

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