UB04 Condition Codes Code 66: Provider Does Not Wish Cost Outlier Payment

Overview

Condition Code 66 is used on the UB‑04 claim form to indicate that the provider does not wish to receive a cost outlier payment for the billed episode of care. This code instructs the payer to calculate reimbursement based on standard prospective payment rates without adding any cost‑outlier adjustment, even if the case qualifies for outlier criteria. ^[1]

The code is reported in Field 18–28 (Condition Codes) of the UB‑04. It is distinct from payer‑only outlier indicators (e.g., Code 60, “Operating cost day outlier – payer code only”) because it is voluntarily elected by the provider. ^[1]

Providers may select this option when they believe the standard payment sufficiently covers costs or when they wish to simplify billing by avoiding outlier documentation and reconciliation. ^[2]

When to Use

Use Condition Code 66 only when the provider has made a deliberate decision to forgo any potential cost‑outlier payment for the inpatient stay. Common scenarios include:

• The case’s actual costs are unlikely to exceed the outlier threshold, so no additional payment would be received. ^[1]
• The provider prefers to avoid the administrative burden of submitting detailed cost data or defending outlier calculations in an audit. ^[2]
• The provider has a contractual or internal policy to not request outlier add‑on payments for certain patient populations. ^[1]

Do not use Code 66 when the claim is already subject to a payer‑only outlier code (e.g., Code 60 or 61). The payer’s systems may ignore Code 66 if a mandatory outlier code is present. ^[1]

Step‑by‑Step Claim Example

Scenario: A hospital treats a Medicare inpatient with a diagnosis typically associated with high costs (e.g., sepsis with mechanical ventilation). The hospital determines that the standard MS‑DRG payment is adequate and does not want to pursue an outlier add‑on.

1. Complete the UB‑04 header – Patient name, Medicare ID, admission/discharge dates, and provider information. ^[2]
2. Enter the principal diagnosis and procedures in Fields 67–76 as usual.
3. In Field 18–28 (Condition Codes), enter “66” in the first available two‑digit field. Do not enter any other cost outlier condition code (such as 60 or 61) in the same claim. ^[1]
4. Complete all other required fields, including value codes for charges and covered days.
5. Submit the claim through the standard electronic or paper process. ^[2]

Result: The payer processes the claim at the base MS‑DRG rate. If the claim would have triggered an outlier payment, that add‑on is suppressed.

Common Mistakes & Audit Red Flags

Mistake	Consequence	Prevention
Using Code 66 together with a payer outlier code (60 or 61)	Payer may reject the claim or ignore Code 66, resulting in unintended outlier payment.	Use Code 66 alone; never combine with other outlier indicator codes. [1]
Claiming outlier payment on a later corrected claim after using Code 66	Appears as a billing error or upcoding attempt.	Once Code 66 is used, the provider has waived outlier payment for that stay. Do not reverse the election without payer approval. [1]
Using Code 66 for a non‑inpatient claim (e.g., outpatient)	Code 66 is valid only for inpatient PPS claims.	Verify the claim type; outpatient claims use different condition codes. [2]
Missing documentation of why outlier was declined	Audit may question if the provider was under‑coding or trying to avoid scrutiny.	Maintain an internal note or policy statement documenting the decision. [2]

Related Codes/Fields

Code / Field	Description	Relationship to Code 66
60	Operating cost day outlier (payer code only)	Payer‑initiated indicator; do not use with Code 66. [1]
61	Operating cost outlier not reported by provider	Indicates the provider did not submit outlier data; similar intent but may be payer‑assigned. [1]
67	Beneficiary elects not to use LTR days	Another “opt‑out” code for a different payment provision (long‑term care days). [1]
Value Code 01	Most common charges	Used to report total charges; outlier calculations often depend on this value. [2]
Field 18–28	Condition Codes location	All six two‑digit condition code fields; Code 66 occupies the first available slot. [2]

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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