Appeal type: Inpatient Hospital
Decision: Unfavorable

 
We decided that the Plan does not have to pay for the inpatient hospital services provided from May 4, 2021, 
through May 7, 2021, and billed with a principal diagnosis code of J96.21. 
 
You asked the Plan to pay for the inpatient hospital services as billed. You say that these services have been 
appropriately billed based on the medical records. The Plan denied your request. The Plan says there is a more 
appropriate diagnosis code for enrollee's condition than what was billed. 
 
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 principal diagnosis code, J96.21, defined as acute 
on chronic respiratory failure with hypoxia. 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 as billed. Our reviewer says that the documentation does not support the inpatient 
hospital services as billed. Our physician reviewer found that the reviewed documentation indicates that the 
enrollee was a then, 77-year-old male with a medical history of chronic obstructive pulmonary disease (COPD) 
requiring continuous supplemental oxygen. Though he reported intermittent compliance with supplementation 
oxygen utilizing it only when his saturation of peripheral oxygen dropped below 90%, he endorsed that failed 
to improve his shortness of breath. He presented to the emergency department for evaluation of shortness of 
breath which had progressively worsened over the course several days. He endorsed acute dyspnea with any 
exertion and chronic cough productive of clear sputum. While it is acknowledged the patient had "pursed lip 
breathing and tachypneic" per the emergency department provider on presentation, the documentation also 
supported that the patient had been non-compliant with his baseline oxygen therapy prior to presentation. 
Additionally, both the emergency department provider and the history and physical exam documentation 
indicates the patient had not been using his required prescription home O2 supplementation prior to 
presentation to the facility. Assessment by the attending per the history and physical exam states, "Patient is in 
no respiratory distress. He has reduced breath sounds. He has minimal wheezing." The subsequent day the 
Pulmonology Consultant documented, Currently, oxygenation is 96% on 3 L/min. in no distress on 
supplemental oxygen" and "Patient is in no respiratory distress. He has reduced breath sounds. He has minimal 
wheezing. The review has determined that the documentation did not support payment for the inpatient 
hospital care as billed with principal diagnosis code J96.21, defined as acute on chronic respiratory failure with 
hypoxia.  
 
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 the inpatient hospital services provided from May 4, 2021, through May 7, 2021, and billed with a principal 
diagnosis code of J96.21.