Corporate Compliance

Note: Condition Code 44 - Let's focus on process

Medicare Insider, April 7, 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 is the first of two additional Instructor’s Notes that will focus on Condition Code 44. Last week, Kimberly Hoy brought up some additional questions about the conversion of inpatient hours to observation time, following a Condition Code 44 change of inpatient status to outpatient care. That article prompted several additional questions from readers, including questions about the process that hospitals need to follow in order to assure that they receive essentially the same reimbursement for those inpatient services as they would have received if the services actually had been provided in the outpatient setting. 

Rather than following up on the specific questions, let’s take a quick look at the so-called Condition Code 44 process, which is actually established as part of hospitals’ Conditions of Participation with Medicare. Under the related regulations, the change in status decision must be made by hospitals’ “Utilization Review Committee.” Those individuals specifically authorized to become “members” of the UR Committee are designated by profession and include the following: doctors of medicine and osteopathy (of which there must be at least two members), as well as doctors of dental medicine and/or surgery, podiatry, and optometry; chiropractors; and clinical psychologists. No non-practitioners are included in the regulations as qualifying for “membership” on the UR Committee. 

Whether an individual qualifies as a member of the UR Committee is important, because the change of status decision can be made by one member of the UR Committee, so long as the patient’s attending physician concurs with the decision (or does not present their views [presumably in opposition to the decision] when given an opportunity). In all other cases, the decision to change the patient’s status must be made by at least two members of the UR Committee. 

In an MLN Matters Article intended to clarify the process, CMS noted that case managers, who are not licensed practitioners authorized under state law to admit patients to the hospital, do not have the authority to change a patient’s status from inpatient to outpatient. CMS did, however, encourage and endorse the participation of case management staff in the change of status process, particularly with regard to identifying and applying relevant inpatient criteria, facilitating communication between practitioners and the UR Committee, and assisting the UR Committee in the decision-making process.

Once the UR Committee has made the decision to change status, the hospital must meet the following additional criteria for the change in status to be effective:

  • 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; and
  • The physician’s agreement must be documented in the patient’s medical record.

Assuming that all criteria are met, the hospital may submit a 13X outpatient claim for the services provided during the inpatient stay (assuming they meet relevant outpatient coverage criteria), reporting Condition Code 44 in one of the Condition Code FLs (FLs 18-28 on the UB-04) on the claim.

Next week’s Instructor’s Note will continue our discussion of the Condition Code 44 process, focusing on some practical suggestions for how hospitals can efficiently implement an effective change in status process.

Related source authorities include the following:



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