Appeal type: Inpatient Hospital
Decision: Unfavorable

 
We decided that the Plan does not have to pay for inpatient hospital care provided from July 24, 2021, to July 
27, 2021, as billed with Diagnosis Related Group (DRG) 291. 
 
You asked the Plan to pay for inpatient care as billed with DRG 291. You say that these services were 
medically necessary and are supported in the record. The Plan denied your request. The Plan says DRG 291 is not appropriate as the diagnosis of acute and chronic respiratory failure with hypoxia (J96.21) is not supported 
in the medical record. The Plan argues that DRG 292 is more appropriate in this case. 
 
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. 
 
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 inpatient care as billed with DRG 291. Our 
reviewer says that the diagnosis of acute and chronic respiratory failure with hypoxia (J96.21) is not supported 
in the medical record for this inpatient admission. Our physician reviewer found that the documentation 
provided supports an admission for acute on chronic diastolic heart failure. The record was examined for 
consistent documentation of acute respiratory failure, the presence of oxygen and/or carbon dioxide levels 
altered from baseline which are representative of this diagnosis persisting beyond initial management, and 
evidence of treatment consistent with acute respiratory failure. A life-threatening diagnosis of acute respiratory 
failure would include symptoms such as but not limited to markedly low oxygenation, respiratory distress, 
labored breathing, tachypnea, altered mental status, accessory muscle use and arterial blood gas consistent with 
the diagnosis. After additional review of the record, documentation remained incomplete and conflicting in 
support of the condition of acute respiratory failure. The enrollee presented with complaints of shortness of 
breath. The oxygen saturation was 91 percent on room air upon arrival to the emergency department, and 
increased to 95 percent on two liters of oxygen. The emergency department physical exam documentation 
indicates that the enrollees pulmonary effort was normal with normal breath sounds and no wheezing or 
rhonchi, and that the enrollee was not in acute distress. Desaturation during ambulation documented, however 
hypoxia during exercise or ambulation is not considered respiratory failure. The enrollee remained alert and 
oriented x3 with no documentation of altered mental status due to hypoxia, accessory muscle use, or markedly 
low oxygenation after initial focused treatment in the emergency department. The maximum oxygen supplied 
during this visit was two liters. The review has determined that the medical records do not support the billing of 
acute and chronic respiratory failure with hypoxia (J96.21). 
 
We looked at this physician's review, the file, and Medicare rules. Based on this information, we decided that 
Medicare rules for coverage of inpatient care as billed with DRG 291 have not been met. Therefore, we 
decided that the Plan does not have to pay for inpatient hospital care provided from July 24, 2021, to July 27, 
2021, as billed with Diagnosis Related Group (DRG) 291.