UB04 Condition Codes Code 61: Cost Outlier

Overview

Condition codes are two-digit alphanumeric entries on the UB‑04 claim form that convey special circumstances or billing instructions to the payer. These codes are placed in fields 18 through 28. ^[1] lists code 61 as “Operating cost outlier not reported by provider.” This code indicates that the claim involves an operating cost outlier (i.e., a case whose actual costs exceed the fixed loss threshold), but the provider has not separately reported the outlier amount on the bill. ^[1] distinguishes code 61 from code 60 (“Operating cost day outlier – Payer code only”), which is exclusively a payer‑used flag. The MassHealth UB‑04 Billing Guide (August 2023) confirms that hospitals use the UB‑04 form for inpatient/outpatient claims and that condition codes are part of the standard data set. ^[2]

When to Use

Use condition code 61 when a claim involves an operating cost outlier but the provider does not include the outlier payment amount in the billing data. This commonly occurs when the payer (e.g., Medicare) calculates the outlier payment separately from the base DRG or per‑diem amount. ^[1] notes that code 61 is specifically “not reported by provider,” meaning the provider leaves the outlier calculation to the fiscal intermediary or contractor. Do not use code 61 if the provider is reporting a cost‑outlier amount in value codes (e.g., value code 17); in that case, the outlier is already stated, and code 61 would be contradictory. Also avoid confusing code 61 with code 60, which is designated as “Payer code only” and should never be entered by the provider. ^[1] Use code 61 only when the following conditions are met: (a) the case qualifies as an operating cost outlier under the payer’s rules, and (b) the provider chooses (or is required) to omit the outlier dollar amount from the bill.

Step‑by‑Step Claim Example

Consider a hospital submitting an inpatient claim for a DRG that includes an operating cost outlier. The hospital knows the case qualifies, but its billing system does not populate the outlier amount on the UB‑04. According to ^[1], the provider should apply condition code 61 in field 18 (or in a subsequent field if multiple codes are needed). The MassHealth UB‑04 Guide states that acute inpatient hospitals must use the UB‑04 form for paper claims. ^[2]

Example entry on the claim form:

• Field 04 (Type of Bill): 0110 (inpatient hospital)
• Field 18 (Condition Codes): 61
• Field 39–41 (Value Codes): left blank (no outlier dollar amount entered)
• Field 55 (DRG): appropriate DRG code
• Field 56 (DRG Weight): weight provided by payer

By placing code 61 in field 18, the provider signals to the payer that an operating cost outlier exists but that the dollar amount will be calculated by the payer’s system. ^[1] The claim is then processed with the outlier payment added at the payer side.

Common Mistakes & Audit Red Flags

Two frequent errors with condition code 61 are:

1. Using code 60 instead of 61 – Code 60 (“Operating cost day outlier – Payer code only”) is reserved for payer use. Providers who enter code 60 will likely have the claim rejected or returned. Always use code 61 when you are the provider not reporting the outlier amount. ^[1]

2. Omitting code 61 when an operating cost outlier applies – If the provider does not enter any condition code but the bill clearly represents a qualifying outlier case, payers may suspend the claim for manual review. The Noridian list explicitly includes code 61 to avoid such ambiguity. ^[1]

Audit red flags include: inconsistent use of code 61 – for example, having a value code showing an outlier amount and condition code 61 on the same bill (which is contradictory). Another red flag is failing to enter code 61 on cost outlier cases for which the provider later demands a separate outlier payment. Proper use of code 61 helps ensure transparent billing and prevents payment delays.

Related Codes/Fields

Code/Field	Description	Source
Condition Code 60	Operating cost day outlier – Payer code only (do not use by provider)	[1]
Condition Code 61	Operating cost outlier not reported by provider	[1]
Condition Code 62	PIP bill not reported by providers	[1]
Field 18–28 (UB‑04)	Location where condition codes are entered	[2]
Value Code 17 (operating cost outlier amount)*	Used when the provider does report the outlier dollar value	General UB‑04 standard (not in provided sources)

*Note: The provided sources do not contain a list of value codes; the reference to value code 17 is from standard billing practice and should be verified against the payer’s manual.

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References

[1] Noridian Condition Codes — https://med.noridianmedicare.com/web/jea/topics/claim-submission/condition-codes

[2] MassHealth UB-04 Guide — https://www.mass.gov/doc/ub-04-billing-guide-0/download