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September-October 2020

Audit Alley: How to Expel Acute Respiratory Failure Denials
By Tonya Shelton, RHIT, CCS, CCDS
For The Record
Vol. 32 No. 5 P. 8

By now, most facilities have experienced many claim denials regarding the assignment of code J96.XX for acute respiratory failure. Although there are several reasons for claim denials, including lack of medical necessity, authorizations, and inputting and coding issues (eg, not documented by the physician, improper sequencing), facilities have seen a specific increase in denials based on what the payer deems as “lack of clinical indicators to support the condition.” Acute respiratory failure is one of several “high-risk” diagnoses that are frequently denied—even if indicators are present.

Acute respiratory failure is defined as respiratory dysfunction resulting in hypoxemia (low arterial oxygen levels), hypercapnia (elevated levels of carbon dioxide gas), or a combination of the two. Always due to an underlying condition, respiratory failure is a life-threatening ailment. It is usually the final pathway of a disease process or a combination of different processes. It can arise from an abnormality in any of the components of the respiratory, central nervous, or peripheral nervous systems and the respiratory and chest wall muscles.

Patients with acute respiratory failure require repeated assessments and close observation.

The Nitty Gritty
The ICD-10-CM Official Guidelines for Coding and Reporting provide instruction on the proper sequencing of acute respiratory failure. They are as follows:

Acute Respiratory Failure as Principal Diagnosis
A code from subcategory J96.0, Acute respiratory failure, or subcategory J96.2, Acute and chronic respiratory failure, may be assigned as a principal diagnosis when it is the condition established after study to be chiefly responsible for the hospital admission. The selection is supported by the Alphabetic Index and Tabular List.

However, chapter-specific coding guidelines (such as obstetrics, poisoning, HIV, and newborn) that provide sequencing direction take precedence.

Acute Respiratory Failure as Secondary Diagnosis
If it occurs after admission or it is present on admission but does not meet the definition of principal diagnosis, respiratory failure may be listed as a secondary diagnosis.

Sequencing of Acute Respiratory Failure and Another Acute Condition
When a patient is admitted with respiratory failure and another acute condition (eg, myocardial infarction, cerebrovascular accident, aspiration pneumonia), the principal diagnosis will not be the same in every situation. This applies whether the other acute condition is a respiratory or a nonrespiratory condition.

Selection of the principal diagnosis depends on the circumstances of admission. If both the respiratory failure and the other acute condition are equally responsible for the admission and there are no chapter-specific sequencing rules, the guideline regarding two or more diagnoses that equally meet the definition for principal diagnosis (Section II, C.) may be applied in these situations.

If the documentation is not clear as to whether acute respiratory failure and another condition are equally responsible for occasioning the admission, query the provider for clarification.

To clinically validate acute respiratory failure, look for consistent documentation of the condition and the underlying cause. Identify the signs/symptoms, such as shortness of breath, dyspnea, tachypnea, labored breathing, wheezing, stridor, use of accessory muscles, nasal flaring, intercostal retractions, cyanosis, lethargy, and inability to speak in full sentences.

Review the patient’s ABGs (arterial blood gases), looking for pH below 7.35, pCO2 above 50 mmHg, PaO2 below 60 mmHg, and SpO2 below 91%, taking into account those patients with COPD whose level of decompensation would be determined from their usual state of normalcy rather than the typical baseline levels.

With CO2 in blood being an acid, an acutely elevated CO2 should have a low pH. As seen in severe COPD, high CO2 and normal pH indicate a compensated respiratory acidosis. Determine whether the patient required supplemental oxygenation (eg, Venturi mask, BiPAP, mechanical ventilation). Keeping in mind that although supplemental oxygen is a good indicator, it is not the final determinant in diagnosing acute respiratory failure.

Review nursing notes for details on daily treatment and services. Take note of the patient’s appearance. Review the patient’s response to treatment. Was there a noted improvement? Did the condition extend the length of stay or increase nursing care and monitoring?

Although the above indicators are commonly used to support acute respiratory failure, providers can use any clinical indicator they deem appropriate to support their diagnosis. Patients shouldn’t have to meet every single criterion to determine whether they have the condition.

Coding Clinic Fourth Quarter 2017, page 110, Omitting ICD-10-CM Codes, states, “If after querying, the attending physician affirms that a patient has a particular condition in spite of certain clinical parameters not being met, the facility should request the physician document the clinical rationale and be prepared to defend the condition if challenged in an audit. The facility should assign the appropriate code(s) for the conditions documented.”

Coding Clinic Fourth Quarter 2016, page 147, Clinical Criteria and Case Assignment, states, “While physicians may use a particular clinical definition or set of clinical criteria to establish a diagnosis, the code is based on his/her documentation, not on a particular clinical definition or criteria. In other words, regardless of whether a physician uses the new clinical criteria for sepsis, the old criteria, his personal clinical judgment, or something else to decide a patient has sepsis (and document it as such), the code for sepsis is the same—as long as sepsis is documented, regardless of how the diagnosis was arrived at, the code for sepsis can be assigned.”

Denials Management
Depending on the contract terms, payers may use clinical criteria to their advantage. If specific criteria are being used by the payer, the hospital needs to know those details. Good denials management begins with good contract management.

It is highly recommended to involve a physician in the appeals letter-writing process. In the response, address the reasons listed for the denial. Be sure to stick to the medical facts and avoid overt criticism of the denial itself.

Denials are not necessarily due to mistakes—they may be the result of conflicting opinions about what constitutes certain disease processes. According to Coding Clinic First Quarter 2004, pages 18 to 19, attending physicians are ultimately responsible for the final diagnosis because their diagnosis is based on the patient’s complete clinical picture. Through this guidance, the federal government recognizes that the attending physician is the best person to assign diagnoses, but it has left the path open for payers to circumvent the physician’s judgment.

Revenue departments need to know that denials occur for a variety of reasons. Poor physician documentation may very well be an issue. That, of course, must be addressed and should be captured in the clinical documentation improvement process.

All facilities should emphasize prebill audits, the development of robust clinical documentation improvement departments, and physician and coder education. These practices can assist in the overall process of obtaining reimbursement as quickly as possible and reduce preventable denials.

However, there are other reasons for denials, including conflict over certain high-risk (high-dollar) records and the payer’s willingness to argue the disease process even in the face of obvious indicators. Because of the inherent conflict between the payer’s reviewers and the attending physician’s diagnosis, it’s still possible to be denied payment—even if everything is correct. Although that conflict may be financially motivated, consistent, clear physician documentation will ultimately prevail during the appeals process.

— Tonya Shelton, RHIT, CCS, CCDS, is an inpatient compliance specialist at Medical Audit Resource Services.