Provider Notice issued 08/28/15

Hospital Inpatient Admission Orders and Use of Condition Code 44 Effective with Admissions On and After October 1, 2015

This notice serves to inform hospital providers about the Department of Healthcare and Family Services’ (the department) Office of Inspector General (OIG) requirements for:

• Inpatient admission orders in the medical records.

• Use of Condition Code 44 – Inpatient Admission Changed to Outpatient.

Inpatient Admission Orders

As per current OIG policy, Medicaid-participating hospitals must maintain a medical record with a valid inpatient admission order for each inpatient.

• The admission order must specify the admitting practitioner’s (or another practitioner who is responsible for the care of the patient and who is authorized to write orders under Illinois law) recommendation to admit with such language as “admit to inpatient”, “admit as an inpatient”, “for inpatient services”, or similar language specifying their recommendation for inpatient services. The use of inpatient and outpatient terms should not be ambiguous. The department does not permit retroactive orders.

• All inpatient admission orders must be legible, complete, dated, timed, and authenticated in written or electronic form prior to discharge. Authentication means identification of the author of a medical record entry by that author, and confirmation that the contents are what the author intended. Written signatures or initials, and electronic signatures or computer-generated signature codes, are acceptable as authentication. Stamped signatures are not acceptable. All authentications must include the initials of the signer's credentials.

• When verbal orders are given, they must be signed and dated before the member of the medical staff, or allied health personnel with clinical privileges recommended by the hospital medical staff and granted by the hospital governing board, leaves the area.”

• Telephone orders may be authenticated by the ordering practitioner or another practitioner who is responsible for the care of the patient and who is authorized to write orders under Illinois law. Telephone orders must be countersigned by the ordering practitioner or another practitioner who is responsible for the care of the patient as soon as practicable pursuant to a hospital policy approved by the medical staff, but no later than 72 hours after the order was given.

Condition Code 44 - Inpatient Admission Changed to Outpatient

Condition Code 44 must be used when the hospital determines that the inpatient admission was not medically necessary. It should be reported in FL 18-28.

In order for the hospital to use Condition Code 44, the following requirements must be met:

• The change in patient status from inpatient to outpatient is made prior to discharge of the patient from the hospital.

• A new order must be written for outpatient services.

The patient’s medical records should be carefully and fully documented with the reason for the change, new orders, and the care that was furnished to the patient. However, the original inpatient admission order is to remain in the medical records.

Example Scenario and Billing Requirements:

The patient was admitted with an inpatient order on January 1st. On January 2rd, the hospital determined that the inpatient admission was not medically necessary and the patient could have been placed in observation. A new order was written beginning January 2nd for outpatient services that included observation. The patient was discharged from observation on January 3rd and returned home.

• The hospital may submit an outpatient claim identifying FL 6 Statement Covers Period as January 1st through January 3rd. 

• Condition Code 44 must be utilized in FL 18-28. 

• Ancillary services provided from January 1st through January 3rd should be identified.

• Observation service dates should reflect January 2nd and January 3rd.

• No accommodation revenue codes should be placed on this outpatient claim.

As there was at least one Ambulatory Procedures Listing (APL) service on the claim (observation) beginning January 2nd, the claim will process through the Enhanced Ambulatory Patient Groups (EAPG) grouper. Claims billed with Condition Code 44 that do not contain at least one APL service will pay at zero and cannot be billed as fee-for-service under the hospital’s fee-for-service NPI.

Hospitals are reminded that if an inpatient claim is billed and the department’s Quality Improvement Organization denies that stay as not medically necessary, the hospital may not submit any claim for the stay.

Any questions regarding this notice may be directed to the Bureau of Hospital and Provider Services at 1-877-782-5565.

Felicia F. Norwood

Director