Appeal type: Inpatient Hospital
Decision: Unfavorable

 
We decided that the Plan does not have to pay for inpatient hospital care provided from January 19, 2021, to 
January 22, 2021, as billed with Diagnosis Related Group (DRG) 189. 
 
You asked the Plan to pay for inpatient care billed with DRG 189. You say that these services were medically 
necessary and are supported in the record. The Plan denied your request. The Plan says DRG 189 is not appropriate as the diagnosis of acute respiratory failure with hypoxia (J96.01) is not supported in the medical 
record. The Plan argues that DRG 191 is more appropriate in this case, with chronic obstructive pulmonary 
disease (COPD) with acute exacerbation (J44.1) as the principal diagnosis. 
 
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 billed with DRG 189. Our 
reviewer says that the diagnosis of acute respiratory failure with hypoxia (J96.01) is not supported in the 
medical record for this inpatient admission. Our physician reviewer found  
 
That the enrollee with a history of hypertension, chronic obstructive pulmonary disease (COPD), 
hyperlipidemia, obesity, and hospitalization for COVID-19 infection one month earlier, presented for 
evaluation on January 19, 2021, reporting dyspnea. She reported that she had been discharged with 
supplemental oxygen at 6L per minute, which she had weaned to 1L per minute, with recent gradual increase to 
4L per minute. The Emergency Department physician described the enrollee as having tachypnea and 
accessory muscle use, decreased breath sounds, and no respiratory distress. The respiratory viral panel, 
including COVID-19, was without finding. Single view chest x-ray revealed mild cardiomegaly, hyperinflation 
and persistent interstitial infiltrates at the lung apices and lung bases. Computed tomographic angiogram of the 
thorax revealed mild centrilobular emphysema without focal airspace consolidation. The enrollee was admitted 
for the further evaluation and management of COPD exacerbation, receiving intravenous fluids, aerosolized 
bronchodilator medication, intravenous steroids, empiric intravenous antibiotics, and supplemental nasal 
oxygen at 3L per minute. She demonstrated clinical improvement, with discharge to a skilled nursing facility 
on January 22, 2021, to continue supplemental nasal oxygen, oral antibiotics, oral steroids, bronchodilator 
medication, Advair and Spiriva. The review has determined that the medical records did not support the billing 
of acute respiratory failure with hypoxia (J96.01). 
 
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 billed with DRG 189 have not been met. Therefore, we decided 
that the Plan does not have to pay for inpatient hospital care provided from January 19, 2021, to January 22, 
2021, as billed with Diagnosis Related Group (DRG) 189.