Inpatient Facility Coding & Compliance Alert

Question: A patient was formally admitted as an inpatient, per physician orders. The Utilization Review Committee determined that the inpatient admission was not medically necessary, but the patient remained an inpatient. Can the hospital change the status of the inpatient bill to outpatient?

Wisconsin Subscriber

Answer: In cases where a hospital Utilization Review Committee determines that an inpatient admission does not meet the hospital’s inpatient criteria, the hospital may change the beneficiary’s status from inpatient to outpatient and submit an outpatient claim (Type of Bill 13x, 85x) for medically necessary Medicare Part B services that were furnished to the beneficiary. This is an acceptable approach, provided all of the following conditions are met:

• The change in patient status from inpatient to outpatient is made prior to discharge or release, while the beneficiary is still a patient of 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; and
• The physician’s concurrence with the utilization review committee’s decision is documented in the patient’s medical record.

When the hospital determines that it may submit an outpatient claim according to the conditions described above, the entire episode of care should be treated as though the inpatient admission never occurred. You bill the treatment as an outpatient episode of care.

Remember: When the hospital submits a 13x or 85x bill for services furnished to a beneficiary whose status was changed from inpatient to outpatient, you must also report Condition Code 44 (Inpatient admission changed to outpatient).

Caveat: This answer is for a Medicare patient. The definition of Condition Code 44 from the NUBC (National Uniform Billing Committee) is different from the more stringent Medicare requirements. When you’re dealing with payers other than Medicare, follow the guidance that payer gives you.