Monitor your facility's use of Condition Code 44

Catch inappropriate admissions up front

If your hospital frequently uses Condition Code 44 to change a patient's admission status, you may need to take a fresh look at your admissions process, according to Deborah Hale, CCS, president, Administrative Consultant Service LLC, a Shawnee, OK, consulting firm.

"The Centers for Medicare & Medicaid Services [CMS] have stated that use of Condition Code 44 should be a rare occurrence. When a hospital frequently uses Condition Code 44, it indicates a failure of the process for determining an appropriate level of care," she adds.

Now that CMS is expanding its Recovery Audit Contractor (RAC) program nationwide, it is more critical than ever for hospitals to look at their use of Condition Code 44 and examine how they are assuring that they are billing in the most appropriate manner, says Carol H. Eyer, RHIA, CHC, senior manager of clinical compliance with Pershing Yoakley & Associates' Atlanta office.

Examples of Overpayments

"Hospitals shouldn't be billing for anything that isn't supported in the documentation. The emphasis is on correct patient status. CMS doesn't want to pay for inpatient care for what could have been accomplished in an outpatient setting," she adds. (See chart, left, for examples of overpayments cited by RACs.)

Condition Code 44 allows hospitals to recoup reimbursement for some services when the bill for the entire episode of care otherwise would be denied, such as a late-night admission when there is no case manager around to determine the correct level of care.

"Because health care is delivered 24-7 in a variety of environments, there are a lot of nonspecific factors at the initial assessment when the doctor is determining if the patient needs to be admitted," adds Lorraine Larrance, BSN, MHSA, CPHQ, CCM, manager with Pershing Yoakley & Associates.

For instance, a patient may come to the emergency department at 2 a.m. and be admitted as an inpatient pending a diagnostic test that later determines the patient should have been treated as an outpatient and released. Without the option of using Condition Code 44, the hospital would not be paid for the stay because the patient's condition did not meet inpatient criteria, she adds.

However, Medicare's Conditions of Participation and MedLearn Matters SE0622 set out a very specific process for filing a Condition Code 44 claim, Hale adds.

"Too many hospitals are just changing the admission status without going through the process. It is a mistake for a hospital to believe that all they need to do is bill an outpatient claim with Condition Code 44. They have to correctly follow Medicare's requirements for determination by the hospital utilization review committee," she says.

A case manager cannot change a patient's admission status from inpatient to outpatient without going through the physician review process, Hale points out.

What to do if it's questionable

If a case manager reviews a case and determines that the patient does not meet admission criteria, he or she should ask the admitting physician if there is other information that would support an inpatient admission, she adds.

If the admitting physician is unable to provide information that would allow the case to meet admission criteria yet he or she continues to insist on an inpatient admission, the matter should be referred to two physician members of the hospital's utilization review committee, Hale says.

If after allowing the attending physician to present his or her reasons for admitting the patient as an inpatient, the utilization review committee determines that the patient's medical condition does not require inpatient admission, Condition Code 44 may be used to indicate that the patient's status is changed to outpatient if the following conditions are met: the patient still is in the hospital; the hospital has not submitted a claim to Medicare for the inpatient admission; a physician concurs with the utilization review committee's decision; or the physician's concurrence is documented in the medical record, she says.

"The change must be fully documented in the medical record and must include the physician orders, notes that indicate why the change was made, and the names of the participants who made the decision," Hale says.

When the hospital has determined that an admission meets the requirements for Condition Code 44, the entire episode of care should be treated as though the inpatient admission never occurred and should be billed as an outpatient episode of care. Examples of services that can be billed are X-ray tests, diagnostic laboratory tests, surgical dressings, and splints.

Condition Code 44 does not apply when the patient has been discharged prior to the utilization review and decision, Hale adds.