Appeal type: Inpatient Hospital
Decision: Unfavorable

 
We decided that the Plan does not have to pay for inpatient hospital services provided from December 22, 
2021, to December 25, 2021, at the Diagnosis Related Group (DRG) originally billed. 
 You asked the Plan to pay for the inpatient care at the DRG originally billed. You say that the diagnosis of 
J96.01 is billed appropriately. The Plan denied your request. The Plan says the secondary diagnosis of J96.01 
(acute respiratory failure with hypoxia) is not supported in the medical record. 
 
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 the secondary diagnosis of J96.01 (acute 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 care at the 
DRG originally billed. Our reviewer says that the secondary diagnosis of J96.01 (acute respiratory failure with 
hypoxia) is not supported in the medical record. Our physician reviewer found the documentation supported an 
admission for Dieulafoy lesion (hemorrhagic) of stomach and duodenum. 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 such as significant/high flow oxygen, positive 
airway pressure device usage, or mechanical ventilation. 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 gases (ABGs) 
consistent with the diagnosis. Record review showed no evidence of ABG or oxygen saturation criteria to 
support this diagnosis. There was no treatment consistent with acute respiratory failure, administration of 
oxygen (minimum 5 L/min or greater) or provision of positive airway pressure and/or mechanical ventilation. 
Physical exams consistently documented "RESP: Normal respiratory effort. Clear to auscultation bilaterally" 
and " no apparent distress". The patient had desaturation to 85% documented, however this was with exercise 
for home oxygen assessment and responded to 3 liters of oxygen. Hypoxia during exercise or ambulation is not 
considered respiratory failure.  
 
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 from December 22, 2021, to December 25, 2021, at the Diagnosis 
Related Group (DRG) originally billed.