Podcast: Improvement with a solid condition 44 process

Steve Wright:

Welcome to another edition of our ongoing Optum360 podcast series on topics related to hospital utilization review. I'm Steve Wright, a marketing director at Optum360. Our podcast today is about creating a solid condition code 44 process. Without proper use of the condition code 44 process, patient status and proper reimbursement can be compromised. I'm joined today by my colleague, Dr. Kurt Hopfensperger who is a subject matter expert on all things related to utilization review. Welcome Kurt.

Kurt Hopfensperger:

Thanks Steve. Always a pleasure to be here.

Steve Wright:

So Kurt, to frame our conversation, can you describe the regulatory requirements for condition code 44?

Kurt Hopfensperger:

Steve, I like to think of the condition code 44 process, which applies at a minimum to traditional Medicare inpatients as really all about protecting the patient or the Medicare beneficiary. When I mention Medicare, I'll be referring to traditional fee for service Medicare not necessarily Medicare advantage. Under Medicare, patients have different copayments and deductibles based on their status as an inpatient or an outpatient, often receiving observation services. Also inpatient status affects out of pocket expenses in other ways such as the three-day qualifying stay for skilled nursing facility placement. So the idea behind condition code 44 is that once a Medicare patient is admitted as an inpatient to the hospital, there can't be an arbitrary downgrade to outpatient observation without in a sense due process. If the hospital's utilization review process concludes that the patient should never have been an inpatient during this day, then the attending physician and one, usually a physician, member of the utilization review committee must agree on that.

Kurt Hopfensperger:

The UR committee physician should review the record and then notice must be given to the patient of the downgrade to outpatient. And both the agreement of the attending and the UAR committee physician along with the clinical reasons for the downgrade must be documented in the medical record. The attending physician must always be given an opportunity to present his or her views as well. And this protects the patient from, as I mentioned, an arbitrary downgrade where, for example, a new attending physician the next morning simply writes an outpatient order on an inpatient without seeking the input of the UR committee, that would simply be an invalid order.

Steve Wright:

So given the number of stakeholders involved in this process and the collaborative nature of the condition code 44 process, what are the best practices involving physician engagement with this process?

Kurt Hopfensperger:

I think it's important to educate physicians on the hospital staff that although the initial inpatient order was in a sense, quote wrong unquote, it doesn't in any way reflect on the clinical care that the patient received only the patient's status, nor does it mean that the patient should not have been put into the hospital only that the patient should be receiving those hospital services on an outpatient or observation basis rather than an inpatient basis. Attending physicians don't have the time or the inclination to keep up to date on the rules, the regulations and the literature regarding inpatient status. That's the role of the UR department and the physician advisor and occasionally a course correction so to speak is needed.

Kurt Hopfensperger:

It's also good to remind attendings who might be resistant to or not understand the condition code 44 process that first of all, the physician advisor is in a sense a consultant on patient status who's there to give good advice to the attending and second, not following the UR recommendations to downgrade can have real consequences for the patient. The most obvious example of those consequences would be a patient who's going to a skilled nursing facility. It's possible that if the patient has an inappropriate inpatient stay because the attending refused to follow a condition code 44 recommendation, the patient could even have to pay back the cost of that nursing home stay.

Steve Wright:

Great great insights Kurt. And looking at the impact of this process on the hospital, what are the revenue implications for not following a good condition code 44 process?

Kurt Hopfensperger:

If a hospital does not identify mistaken inpatient admissions for its Medicare patients before those patients are discharged, then it should identify those post-discharge and submit a provider liable bill to Medicare. This is often going to result in a much lower payment reflecting only part B allowable charges. If a hospital never identifies a mistaken inpatient admission, then there's not only a revenue risk should that case be audited and denied in the future, but also a compliance risk. A third risk is that the condition code 44 process does not run in a timely manner and the patient is discharged prior to accumulating at least eight hours of medically necessary observation services during their stay should observation services in a medical patient be appropriate. In that case, the revenue could be substantially less in line with a part B rebilling situation as I mentioned earlier. The best approach is to identify inappropriate inpatient admissions quickly, utilize the case management staff and the physician advisor and act on them with the condition code 44 process prior to discharge.

Steve Wright:

That's great advice Kurt. It seems that revisiting existing condition code 44 processes is a good use of a hospital's time.

Kurt Hopfensperger:

Yes absolutely, Steve.

Steve Wright:

Well, thanks Kurt. That's all the time we have for today. Thanks for sharing your expertise and I hope this has been meaningful for our listeners. Please be on the lookout for additional episodes of our podcast and thanks to our listeners for their commitment to make healthcare better for everyone.