Appeal type: Inpatient Hospital
Decision: Unfavorable

 
We decided that the Plan does not have to pay for inpatient hospital care provided from February 4, 2021, to 
February 5, 2021, as billed with Diagnosis Related Group (DRG) 180. 
 
You asked the Plan to pay for inpatient care as billed with DRG 180. You say that these services were 
medically necessary and are supported in the record. The Plan denied your request. The Plan says DRG 180 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 181 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 180. 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 enrollee presented to 
the outside facility with a chief complaint of "hypoxemia and hemoptysis" in the setting of lung cancer. The 
enrollee was noted to have orders for supplemental oxygen as needed (PRN) at baseline, and while this was 
documented to "not be used until last night", the enrollees baseline saturations would be expected to be 
abnormal to qualify to use home oxygen in the outpatient setting, even if as needed. The enrollee was described 
upon transfer to be in no acute distress, with normal and non-labored respirations with clear lungs to auscultate. 
The enrollee was acknowledged to have a saturation of 89%, however this was noted to be greater than 95% 
once low flow oxygen was applied as ordered. The enrollee was stated to be at "baseline" for chronic 
obstructive pulmonary disease (COPD) per the history and physical and would be given scheduled and PRN 
nebulizers as per expected management and home medications related to chronic lung disease in the setting of 
being a heavy smoker. The Pulmonary consult stated the enrollee had an episode of "falling out" associated 
with coughing up large amounts of blood, and while the enrollee was described to "turn blue", this was 
transient, and the enrollee was given supplemental oxygen but recovered per the outside emergency medical 
services runsheet. The enrollees saturation on February 4th was noted to be 96% and again was described as 
unlabored in respiratory effort. The orders for inpatient admission stated "lung cancer, hypoxemia" as the 
admitting diagnoses. Orders included using low flow oxygen up to 2 liters with a goal saturation of 93%. No 
arterial or venous blood gas results were found in the record. While it is acknowledged the enrollee presented 
to the outside facility with saturations described to be "in the 70's", these findings did not persist, and saturation 
levels were not noted to persist be below 89% on room air in the setting of COPD and lung cancer. The 
enrollees saturation levels were supported to be promptly responsive to low flow oxygen per the vital signs in 
the progress notes, and in the body of the discharge summary no provider support of aggressive measure 
related to the findings was found. Consistent provider physical examinations noted unlabored and even 
respiratory effort without significant tachypnea. The review has determined that the medical records did 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 180 have not been met. Therefore, we 
decided that the Plan does not have to pay for inpatient hospital care provided from February 4, 2021, to 
February 5, 2021, as billed with Diagnosis Related Group (DRG) 180.