Appeal type: Inpatient Hospital
Decision: Unfavorable

We decided that the Plan does not have to pay for inpatient services provided from November 24, 2020, 
through November 26, 2020 with the reported secondary diagnosis, J96.21, acute and chronic respiratory 
failure with hypoxia. 
 
You asked the Plan to pay for inpatient services provided from November 24, 2020, through  
November 26, 2020 with the reported secondary diagnosis, J96.21, acute and chronic respiratory failure with 
hypoxia. The Plan denied your request. The Plan says while acute on chronic respiratory failure with hypoxia 
was documented in the record, other provider documentation was unclear and/or inconsistent regarding this 
condition. The documentation supports an admission for further evaluation and treatment of pneumonia. 
 
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 secondary diagnosis, J96.21, acute and 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 inpatient 
services provided with the reported secondary diagnosis, J96.21, acute and chronic respiratory failure with 
hypoxia. Our reviewer says that the documentation does not support that the inpatient care is payable as billed. 
Our physician reviewer found that the medical records provided do not include sufficient documentation to 
validate that J96.21 was a valid diagnosis for this inpatient encounter. Medicare rules state, "For Medicare to 
consider coverage and payment for an item or service, the information submitted by the supplier or provider 
must corroborate the service so we can confirm Medicare coverage has been met." "Physicians must report 
services correctly. There are certain types of improper coding that physicians must avoid. Procedures should be 
reported with the most comprehensive CPT code that describes the services performed. Physicians must avoid 
upcoding. A HCPCS/CPT code may be reported only if all services described by that code have been 
performed." Also, coding guidelines state code assignment is based on clear and consistent physician 
documentation and without such documentation accurate code assignment cannot be achieved. When 
documentation in the medical record is unclear, conflicting, ambiguous or incomplete, it is the responsibility of 
the hospital to request a pre-bill physician clarification be completed prior to billing and reporting the diagnosis 
in question.  
 
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 services provided from November 24, 2020, through November 26, 2020 with the reported 
secondary diagnosis, J96.21, acute and chronic respiratory failure with hypoxia.