Appeal type: Medical necessity
Decision: Overturned in Part

Diagnosis: Chronic Lung Disease

Treatment: Inpatient revenue code 0173 newborn - level III nursery/level III provided for Dates of Service A and again for Dates of Service B

The insurer denied coverage for inpatient revenue code 0173 newborn - level III nursery/level III provided for Dates of Service A and again for Dates of Service B.

The denial is modified.

Dates of Service A:

The infant was born 88 days earlier at 24 weeks gestation. Thermoneutrality was maintained with a double wall isolette. The patient had continuous cardiopulmonary monitoring including pulse oximetry. A physician assistant (PA) documented the infant was stable on nasal cannula oxygen (O2) at 0.5 liters per minute (LPM). The attending Neonatologist documented that the infant was on high-flow nasal cannula (HFNC) at 5 LPM with a fraction of inspired oxygen (FIO2) of 0.25. For apparent gastrointestinal reflux, the infant was receiving Reglan and Prevacid. 

According to Milliman Care Guidelines (MCG) 25th Edition (2021), Neonatal Facility, Level III (LOC-006), Level III indications include: Respiratory failure requiring ventilatory support (e.g., mechanical ventilation, continuous positive airway pressure, or high-flow nasal cannula of greater than 1 liter per minute and Level II indications include: Convalescent care for infant after Level III or Level IV neonatal intensive care unit stay who has continued moderate needs (e.g., advancing enteral feeds, titration of medications).

Accordingly, for Dates of Service A, in view of the above care rendered including HFNC and need for nursing care with a 1:2 or 1:3 nursing to patient ratio, re: continuous monitoring for apnea/bradycardia/pulse oxygen desaturations, q 8 hours feeding PO or gavage, frequent adjustments in FiO2 (fraction of inspired oxygen) and cannula flow rates, administration of multiple medications, and maintenance of thermoneutrality in an isolette, Level III care was indicated. 

Dates of Service B: 

As documented by a Registered Nurse (RN), the infant was in an open crib requiring nasal cannula 23% at 1 LPM.  Feedings were well tolerated. A Nurse Practitioner (NP) similarly documented CLD (chronic lung disease) on nasal cannula 1 L 21% (room air). Respiratory medications included Theophylline, Xopenex, Pulmicort, Hydrochlorothiazide, and Aldactone. 

As above per MCG 25th Edition, Intensity of Care Criteria 2- Continuing Care (LOC-11) indications include: 1) Supplemental oxygen needed via hood or nasal canula at less than 2 L/min and 2) Other clinical situation (e.g., needed treatment or intervention, postoperative state, acuity of illness, diagnosis) such that a ratio of 3 or 4 neonates per registered nurse is clinically necessary and appropriate.  Accordingly, allowing for innocent discrepancies in the medical record, this infant's respiratory support for Dates of Service B was essentially no greater than nasal cannula 1 LPM.  Frequent adjustments in FiO2 were not necessary. Also, he did not require an isolette for thermoregulation and had started to breastfeed. All feedings were by mouth (PO). 

Accordingly, for Dates of Service B, the level of respiratory support, monitoring and nursing care expected was at a 1:3 to 1:4 nurse to patient ratio. Therefore, the level of care best met Level II. 

Based on the above, the insurer's denial must be modified. 

The health care plan did not act reasonably and with sound medical judgment and in the best interest of the patient. The medical necessity for inpatient revenue code 0173 newborn - level III nursery/level III provided for Dates of Service A is substantiated.

However, the health care plan did act reasonably and with sound medical judgment and in the best interest of the patient. The medical necessity for inpatient revenue code 0173 newborn - level III nursery/level III for Dates of Service B is not substantiated.

Based on the above, the insurer's denial must be modified.