A Condition Code 44 is a billing code used when it is determined that a traditional Medicare patient does not meet medical necessity for an inpatient admission.
- An order to change the patient status from Inpatient to Observation (bill type 13x or 85x) MUST occur PRIOR TO DISCHARGE.
- The order is necessary if the patient does not meet medical necessity to support the second midnight of hospitalization, is ready for discharge, and does not meet exception criteria below.
- Patient only hospitalized one midnight, but is appropriate to be inpatient because of the
following:- Exception Criteria
• Patient expired
• Patient left AMA
• Patient discharged to hospice (new election)
• Patient required a ventilator
• Patient was transferred to another hospital for higher level of care
• Patient experienced a “faster than expected recovery”
- Exception Criteria
- Patient only hospitalized one midnight, but is appropriate to be inpatient because of the
- The order must be approved by BOTH the attending physician and a UR/UM Committee member.
- The change must be fully documented in the record:
- Change in status order
- Notes indicating why the change was made
- The care provided to the beneficiary
- Participants in making the decision to change the status
- The beneficiary must be provided with a Medicare Outpatient Observation Notice (MOON).
- Requirement to notify (not that he/she has to agree)
- Document in the record MOON given but refusal to sign
- If notification does not occur prior to discharge, the claim should be filed as a no-pay bill type (110)
with all days and charges as non-covered. - Medicare Advantage (MA) Plans may or may not use this process depending on their contract.
Download the complete tip, Condition Code 44.