Simplifying the Use of Condition Code 44 versus Part A-to-Part B Rebilling

A complex process is simplified in a tabular comparison.

Not infrequently, in the process of utilization review (UR), we run into situations in which, as physician advisors, we get to review Medicare cases that do not match their original “label” (i.e. the initial status selection was likely not a proper one).

And while patients initially placed into observation care can be easily admitted as inpatients simply by having an attending provider enter a valid (and ideally, signed) inpatient order, the reverse scenario is not as simple. The purpose of this article is to compare the nature and proper application of Condition Code 44 (CC44), as opposed to the Part A-to-Part B rebilling process. It is a fairly complex topic, so in order to make it easier for everyone, we have decided to present it in a simple two-table format.

First, let’s compare the regulatory references, definitions, and components of both processes in Table 1.

Now, let’s compare the operational details and the downstream implication of the processes in Table 2.

As far as the auditing implications go, both the initial expectations and the final outcomes of both processes have to be scrutinized.

Even though the Centers for Medicare & Medicaid Services (CMS) anticipates that with appropriate education, “the need for hospitals to correct inappropriate admissions and to report Condition Code 44 should become increasingly rare,” the use of this option is highly resource-dependent. Use of Condition Code 44 notifies CMS of the ongoing concurrent review when the initial status application was corrected while the patient is still in the facility. As the final status becomes outpatient, such a case is not likely to be audited for any inpatient audit targets (i.e., short-stay audits, DRG validation audits, etc.)

Conversely, application of the Part A-to-Part B rebilling process (if the facility chooses to use Condition Code W2) notifies CMS that the UR process was applied retroactively and not concurrently. Since the final status of the patient remains inpatient, such a case would be subject to any potential inpatient type audits, as mentioned above. If the code W2 is not applied and all that is reported is an inpatient stay with a 0-1 day length of stay, the event would likely make the case subjected to short stay audits. In addition, these cases would definitely be captured by the PEPPER data for potential outlier risk for one-day medical and surgical stays.

In conclusion, we would strongly encourage the use of Condition Code 44 over Part A-to-Part B rebilling. The rationale for this recommendation is multifaceted (full disclosure: just in our opinion):

• More transparent and compliant process
• Better justifies the patient’s status and appropriate billing in real time
• Shorter time to reimbursement (time value of money); no double-claim submission
• If done promptly, with the capture of at least eight hours in observation care, likely better reimbursement
• Improved finance and case management staff process flow
• No effect on readmissions
• Likely lessened audit risk
• Exclusion from PEPPER one-day surgical/one-day medical reporting

Based on resource availability, such as UR representation in emergency departments, these factors should be considered in the management of the Medicare FFS population.