Code blue in jail and prison or other institutions refers to a medical emergency.
When they call code blue in jail or any other institution it means that someone is likely suffering a heart attack or a patient is in cardiopulmonary arrest, requiring a team of providers (sometimes called a 'code team') to rush to the specific location and begin immediate efforts to hopefully bring the patient back to life or prevent them from dying.
Code blue is a serious thing when you hear it and it means someone it likely about to die if they do not get the help they need in time.
So when you're working in a jail or prison or you're an inmate in prison or jail and hear code blue it means that someone is in serious bad health and needs help.
It could be an employee or an inmate.