Appeal type: Inpatient Hospital
Decision: Unfavorable

 
We decided that the Plan does not have to pay for inpatient hospital services provided on February 9, 2022, to 
February 11, 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 this 
diagnosis was billed correctly. The Plan denied your request. The Plan says the billed diagnosis code of J96.91 
(resp failure, unspecified w/ hypoxia) is not supported in the medical record, resulting in a lower DRG being 
paid. 
 
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 diagnosis code J96.91 (resp failure, unspecified w/ 
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 at the 
DRG originally billed. Our reviewer says that the billed diagnosis code of J96.91 (resp failure, unspecified w/ 
hypoxia) is not supported in the medical record. Our physician reviewer found the enrollee was a then 68 year 
old male with a history of hypertension, Atrial fibrillation, diabetes mellitus, congestive heart failure, stroke 
and chronic kidney disease who presented to the emergency department (ED) with shortness of breath. He was 
evaluated and admitted with pneumonia.  In the ED he required 4 L O2. He had no issues related to respiratory 
distress during the hospitalization. 
 
Per Medscape Internal Medicine, Respiratory failure is a syndrome in which the respiratory system fails in one 
or both of its gas exchange functions: oxygenation and carbon dioxide elimination. In practice, it may be 
classified as either hypoxemic or hypercapnic. Hypoxemic respiratory failure (type I) is characterized by an 
arterial oxygen tension (PaO2) lower than 60 mm Hg with a normal or low arterial carbon dioxide tension 
(PaCO2). This is the most common form of respiratory failure, and it can be associated with virtually all acute 
diseases of the lung, which generally involve fluid filling or collapse of alveolar units. Some examples of type I 
respiratory failure are cardiogenic or noncardiogenic pulmonary edema, pneumonia, and pulmonary 
hemorrhage. 
 
Hypercapnic respiratory failure (type II) is characterized by a PaCO2 higher than 50 mm Hg. Hypoxemia is 
common in patients with hypercapnic respiratory failure who are breathing room air. The pH depends on the 
level of bicarbonate, which, in turn, is dependent on the duration of hypercapnia. Common etiologies include 
drug overdose, neuromuscular disease, chest wall abnormalities, and severe airway disorders (eg, asthma and 
chronic obstructive pulmonary disease. Respiratory failure may be further classified as either acute or chronic. 
Although acute respiratory failure is characterized by life-threatening derangements in arterial blood gases and 
acid-base status, the manifestations of chronic respiratory failure are less dramatic and may not be as readily 
apparent. 
 
Acute hypercapnic respiratory failure develops over minutes to hours; therefore, pH is less than 7.3. Chronic 
respiratory failure develops over several days or longer, allowing time for renal compensation and an increase 
in bicarbonate concentration. Therefore, the pH usually is only slightly decreased. The distinction between 
acute and chronic hypoxemic respiratory failure cannot readily be made on the basis of arterial blood gases. 
The clinical markers of chronic hypoxemia, such as polycythemia or cor pulmonale, suggest a long-standing 
disorder. 
 
Arterial blood gases should be evaluated in all patients who are seriously ill or in whom respiratory failure is 
suspected. Chest radiography is essential. Echocardiography is not routine but is sometimes useful. Pulmonary 
functions tests (PFTs) may be helpful. Electrocardiography (ECG) should be performed to assess the possibility 
of a cardiovascular cause of respiratory failure; it also may detect dysrhythmias resulting from severe 
hypoxemia or acidosis. Right-sided heart catheterization is controversial. Hypoxemia is the major immediate 
threat to organ function. After the patients hypoxemia is corrected and the ventilatory and hemodynamic status 
have stabilized, every attempt should be made to identify and correct the underlying pathophysiologic process that led to respiratory failure in the first place. The specific treatment depends on the etiology of respiratory 
failure. In this case, there was no clinical or laboratory evidence of acute 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 inpatient hospital services provided on February 9, 2022, to February 11, 2022, at the Diagnosis Related 
Group (DRG) originally billed.