Appeal type: Inpatient Hospital
Decision: Unfavorable

 
We decided that the Plan does not have to pay for inpatient hospital services provided on February 11, 2022, to 
February 14, 2022, at the Diagnosis Related Group (DRG) originally billed. 
 You asked the Plan to pay for the inpatient hospital services at the DRG originally billed. You say that these 
services were reported correctly and are supported in the medical records. The Plan denied your request. The 
Plan says the submitted DRG for this claim is not appropriate, as the diagnoses of acute and chronic respiratory 
failure with hypoxia (J96.21) and acute and chronic respiratory failure with hypercapnia (J96.22) are not 
supported in the provided records. 
 
The Plan must follow Medicare rules. Medicare rules say that providers must report services correctly. 
Providers must report inpatient hospital services with the appropriate DRG, which is based, in part, on the 
reported principal and secondary diagnosis codes.   
 
In this case, you billed the inpatient services provided with acute and chronic respiratory failure with hypoxia 
(J96.21) and acute and chronic respiratory failure with hypercapnia (J96.22). We asked our physician reviewer 
to carefully review the case file and apply the relevant Medicare rules to determine if the Plan was correct in 
denying the request to pay for the inpatient hospital services at the DRG originally billed. Our reviewer says 
that these diagnoses are not supported in the medical record. Our physician reviewer found that the enrollee 
with chronic obstructive pulmonary disease (COPD) presented with shortness of breath and swelling in legs 
which grew worse over 2 weeks. He was recently ordered home oxygen but had not yet started. He denied 
fever/chills and was alert and oriented with a respiratory rate of 24-29 but in no acute distress with respiratory 
rate down to 20 on admission. Oxygen saturation was 79-83 on room air. He was treated with 5-6 L/m nasal 
cannula initially, bringing his oxygenation to 96% at rest then was transitioned to 4L/m on admission and after 
initial treatment in the emergency department. The partial pressure of oxygen in the arterial blood (PaO2) was 
52 mm Hg. Although the PaO2 was low, there was insufficient evidence from the provided documentation 
showing a high PaCO2 or change in PaO2 or PaCO2 significant over their baseline that would qualify as an 
acute episode of respiratory failure of any type. Also, clinically the enrollee was not reported to be in acute 
distress and did not require more than 4L/m of oxygen on admission. He was not treated with bilevel positive 
airway pressure (BiPAP) or other aggressive respiratory intervention. Therefore, the diagnoses of acute and 
chronic respiratory failure with hypoxia (J96.21) and acute and chronic respiratory failure with hypercapnia 
(J96.22) are not supported in the provided records.   
 
We looked at this physician's review, the file, and Medicare rules. Based on this information, we decided the 
medical records do not substantiate the DRG as billed. Therefore, we decided that the Plan does not have to pay 
for inpatient hospital services provided on February 11, 2022, to February 14, 2022, at the Diagnosis Related 
Group (DRG) originally billed.