CurrentHumanaPolicy CP2O22002

Neonatal Intensive Care Unit (NICU) Guidelines

Defines Humana's billing requirements, documentation, DRG assignment and revenue-code based NICU level criteria for Florida, Kentucky and Oklahoma Medicaid products; applies to providers submitting NICU claims for Humana members in those states.

Policy Summary

PayerHumana

PolicyNeonatal Intensive Care Unit (NICU) Guidelines

Policy CodePolicy CP2O22002

Change TypeNo material change

Effective Date

Next Review Date

Key ActionProvide all relevant medical record documentation to support NICU revenue-code level assignment and DRG calculation; claims lacking documentation will be reimbursed at the highest level for which criteria are satisfied.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

3States covered

0-4NICU levels

0170-0174Revenue codes

789-795MS-DRG groups

NICU Level & DRG Assignment Criteria

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Level 0 — Revenue code 0170: Level 0 and Level 1 are considered newborn nursery; examples include observation for sepsis.

Level 1 — Revenue code 0171: Temperature instability; feeding irregularities; jaundice.

Level 2 — Revenue code 0172: Neonate not severely ill but needs more hours of nursing/medical care than typical neonates, as indicated by one or more of: hood oxygen or <=2 L/min via nasal cannula; administration of IV heplock medicines; weaning from NG/NJ feedings while increasing oral intake without IV fluids; weaning from isolette/radiant warmer to open crib without temperature support; documented episodes of apnea, bradycardia or desaturation; services for NAS with Finnegan score <=8; neonatal jaundice requiring phototherapy or bilirubin monitoring less frequently than every 12 hours.

Level 3 — Revenue code 0173: Level 2 requirements met plus temperature control modalities (isolette or radiant warmer) in use and a condition requiring 6 to 12 hours of active nursing and medical evaluation/treatment/support, as evidenced by one or more of: >2 L/min oxygen via nasal cannula; high flow nasal cannula; CPAP; stable chronic mechanical ventilation or conventional ventilator; umbilical venous catheter (UVC) or invasive cardiopulmonary monitoring (CPM); hypoglycemia requiring D-10 bolus therapy; NPO with either all NG feedings or total parenteral nutrition (TPN); NAS with three consecutive Finnegan >=8, two consecutive >=12, or pharmacologic management.

Level 4 — Revenue code 0174: Level 3 requirements met plus condition requiring ongoing evaluation, active management, or therapy adjustment with near-continuous nursing/medical support, as evidenced by one or more of: high frequency oscillatory ventilation (HFOV); IV bolus therapy, inotropic/chronotropic drugs, calcium channel blockers, or IV prostaglandin therapy; surgical repair of severe congenital defect (e.g., omphalocele repair, bowel resection for NEC, tracheoesophageal fistula repair); inhaled nitric oxide (iNO); extracorporeal membrane oxygenation (ECMO); therapeutic cooling; hyperbilirubinemia requiring exchange transfusion or IVIG; emergent events such as pulmonary or cardiac arrest.

inv-02: DRG minimum criteria by state

DRG assignment minimum criteria (state-specific examples)

Florida examples

Multiple MS-DRGs referenced (for example 580–640, 863) with minimum criteria tied to birth weight bands and clinical conditions, including ECMO, major procedures, RDS, major anomalies, congenital or perinatal infection, and transfer status; specific weight bands include <500 g, 500–999 g, 750–999 g, 1000–1249 g, 1250–1499 g, 1500–1999 g, 2000–2499 g, and >=2500 g as listed in the Florida policy.

Kentucky examples

MS-DRGs 790–795 and 789: assignment based on birth weight and gestational age bands (e.g., 790: <=999 g or GA 23–26 weeks or diagnosis P22.0 RDS; 791: 1000–2499 g or GA 27–36 weeks with one or more CMS Major Problems diagnoses; 792: 1000–2499 g without major problems; 793–794: full-term with major or significant problems; 795: normal neonate; 789: transfer or death).

Oklahoma examples

MS-DRG mappings (NO1–N76): minimum criteria include satisfaction of MS-DRG 789–795 criteria plus modifiers such as length of stay, transfer status, death before discharge, and specific birth weight ranges (for example, neonates with birth weight <750 g, 750–999 g, 1000–1499 g, 1500–1999 g, 2000–2499 g) and whether procedures were performed in the operating room as detailed in the Oklahoma tables.

inv-03: NICU DRG and Level Assignment Criteria

Humana requires specific minimum criteria (birth weight ranges, gestational age, procedures performed, and diagnoses) to assign MS-DRGs 789-795 and to determine NICU revenue code levels 0-4. Documentation must support the reported diagnosis codes and level-of-care charges.

MS-DRG assignment uses birth weight and gestational age bands plus diagnosis lists (CMS Major Problems or Significant Problems) and procedures. Examples: DRG 790 — neonate with birth weight <=999 g, GA 23–26 weeks, or neonatal RDS (P22.0); DRG 791 — neonate 1000–2499 g or GA 27–36 weeks with one or more CMS Major Problems; DRG 792 — neonate 1000–2499 g or GA 27–36 weeks without major problems; DRG 793 — full-term (>=37 wks) with one or more CMS Major Problems; DRG 794 — full-term with one or more CMS Significant Problems; DRG 795 — normal neonate not requiring care outside newborn nursery; DRG 789 — transfer to another acute care facility or death.

Revenue code level assignment (0170–0174) requires documentation meeting level-specific clinical examples; if documentation for a billed revenue code is insufficient, Humana will reimburse at the highest NICU revenue code for which criteria are satisfied.

Procedure considerations

Some DRG assignments consider whether an operating room procedure other than minor surgery was performed when differentiating N-code mappings and related minimum criteria (birth-weight bands referenced for N48–N76 mappings).

Revenue Codes, ICD-10, and MS-DRG References

NICU revenue codes by levelRevenue

0170	Level 0 NICU / newborn nursery revenue code
0171	Level 1 NICU revenue code
0172	Level 2 NICU revenue code
0173	Level 3 NICU revenue code
0174	Level 4 NICU revenue code

ICD-10-CM neonatal respiratory codes referencedICD-10

P22.0	Neonatal respiratory distress syndrome (RDS)
P22.1	Transient tachypnea of the newborn
P22.8	Other respiratory distress of newborn
P22.9	Respiratory distress of newborn, unspecified

MS-DRG neonatal groupsmixed

789	Neonate transferred to another acute care facility or has died
790	Critically ill neonate: birth weight <=999g, gestational age 23-26 weeks, or neonatal RDS (P22.0); most complex care
791	Neonate 1,000-2,499g or GA 27-36 weeks with one or more CMS Major Problems diagnoses
792	Neonate 1,000-2,499g or GA 27-36 weeks without major problems
793	Full-term neonate (>=37w) with one or more CMS Major Problems diagnoses
794	Full-term neonate (>=37w) with one or more CMS Significant Problems diagnoses
795	Normal neonate not requiring care outside newborn nursery

NICU revenue codesRevenue

0170	Level 0 NICU / newborn nursery
0171	Level 1 NICU / newborn nursery
0172	Level 2 NICU
0173	Level 3 NICU
0174	Level 4 NICU

inv-08: DRG minimum criteria by birth weight / gestational age / condition

ScopeNumerous MS‑DRGs require specific minimum clinical criteria including birth weight ranges, gestational age bands, presence of major procedures or anomalies, neonatal RDS, infections, transfer status, or death as listed in state sections.

Examples (Florida)DRGs 580–614 and others specify birth weight bands (eg, <500g, 500–749g, 750–999g, 1000–1249g, 1250–1499g, 1500–1999g, 1500–2499g) and criteria such as ECMO or major procedures.

Examples (Kentucky)DRGs 790–795 and 789 reference birth weight and gestational age thresholds plus CMS Major/Significant Problems lists to meet minimum criteria for assignment.

Examples (Oklahoma)Oklahoma uses MS‑DRG mappings (NO1–N76) with minimum criteria including birth weight bands, transfer status, length of stay and whether procedures were performed.

inv-09: Birth weight and gestational age thresholds for DRG assignment

Critical low birth weight<= 999 grams maps to DRG 790 (critically ill neonate)

Low birth weight band1,000–2,499 grams maps to DRG 791 or 792 depending on presence of CMS Major Problems diagnoses (GA 27–36 weeks)

Full‑term band>= 37 weeks gestational age maps to DRG 793 or 794 depending on Major vs Significant Problems; 795 for neonate not requiring nursery care

Intermediate birth weight bands (state examples)Florida and other state sections list bands such as 500–749g, 750–999g, 1,000–1,249g, 1,250–1,499g, 1,500–1,999g with condition‑specific rules (eg, RDS, major anomaly, major procedure).

Documentation, Authorization & Reimbursement Notices

Documentation Required

Documentation Required for Leveling & DRG Assignment

During the NICU stay the provider must supply all relevant documentation (medical records, flow sheets, orders, progress notes, nursing documentation, ventilator/respiratory records, weight and feeding records, and any other pertinent clinical documentation) to support level-of-care, utilization management, and DRG leveling. Documentation must clearly show medical necessity for each billed NICU revenue code and for the number of days billed.

Provide complete clinical records supporting level of care for every billed NICU revenue code
Include dates of service and number of days billed with supporting clinical justification
When multiple DRGs could apply, Humana assigns the DRG reflecting the most complex services

Note

DRG Outlier Review (Kentucky — effective May 29, 2025)

For claims with a discharge date on or after May 29, 2025 (Kentucky), Humana will review additional factors when calculating DRG outlier payments. This review includes verification that billed days meet medical necessity and examination of claim data elements used to support outlier calculation.

Review whether any billed days lack medical necessity documentation
Confirm level of care reported by NICU revenue code per MCG Health criteria
Verify the number of days billed and the specific dates of service

Denial Risk

Documentation and Reimbursement Adjustment

If documentation for a billed NICU revenue code does not establish that the criteria for that revenue code were met, Humana will adjust reimbursement. Payment will be recalculated using the highest NICU revenue code for which criteria are documented and satisfied. Providers should expect utilization management or claims review requests and should timely furnish requested records to avoid reimbursement adjustments or denials.

Reimbursement may be reduced to a lower NICU revenue code level when documentation is insufficient
Timely respond to record requests for utilization management and DRG leveling
Follow any state-specific guidance (e.g., OHCA guidance for Oklahoma) when applicable

Key Terms and NICU Level Definitions

inv-13: Neonate

DefinitionNeonate: An infant who is less than four weeks old.

Clinical contextApplies to DRG and revenue‑code assignment and documentation review for neonatal care.

Related codesNeonatal respiratory diagnoses (eg, P22.x) and CMS problem lists are used to determine DRG placement.

inv-14: Prematurity

DefinitionPrematurity: Birth before 37 weeks and 0 days gestational age.

RelevanceGestational age bands (eg, 23–26, 27–36, >=37 weeks) are used with birth weight to assign MS‑DRGs 790–795.

Clinical impactPrematurity is a primary risk factor for neonatal RDS and influences DRG 790 eligibility.

inv-15: Extreme prematurity

DefinitionExtreme prematurity: Birth before 28 weeks and 0 days gestational age.

AssociationMost cases of neonatal RDS occur before 28 weeks and extreme prematurity is a key factor in DRG severity assessments.

DRG relevanceExtremely premature infants are contemplated in criteria for high‑acuity DRGs such as 790 and related state mappings.

inv-16: Level 2

DefinitionLevel 2: Neonate not severely ill but needs more nursing and medical care than typical neonates, evidenced by one or more examples (hood oxygen or <=2 L/min nasal cannula, IV heplock meds, weaning from NG/NJ feeds, documented apnea/bradycardia/desaturation, NAS with Finnegan <=8, phototherapy or bilirubin monitoring).

Revenue code0172 is the designated revenue code for Level 2 care.

Documentation noteRevenue code should be supported by chart evidence of the listed clinical examples; Humana will reimburse at the highest level supported by documentation.

inv-17: Level 3

DefinitionLevel 3: Level 2 requirements plus temperature control modalities and conditions requiring 6–12 hours of active nursing/medical evaluation, treatment and support (eg, >2 L/min NC, HFNC, CPAP, conventional ventilation, UVC or invasive cardiopulmonary monitoring).

Revenue code0173 is the designated revenue code for Level 3 care.

Documentation noteLevel assignment must be supported in the medical record; insufficient documentation results in reimbursement at the highest substantiated level.

inv-18: Level 4

DefinitionLevel 4: Level 3 requirements plus need for near‑continuous nursing/medical support for conditions such as HFOV, IV inotropes/chronotropes, ECMO, inhaled nitric oxide, therapeutic cooling, major surgical repair, exchange transfusion or emergent events.

Revenue code0174 is the designated revenue code for Level 4 care.

Documentation noteLevel 4 designation requires chart evidence of ongoing near‑continuous interventions; lacking documentation will downgrade reimbursement to the highest supported level.

inv-19: DRG 790

DRG descriptionDRG 790: Critically ill neonate intended for infants with birth weight <= 999 g, gestational age 23–26 weeks, or diagnosis of neonatal RDS (ICD‑10‑CM P22.0).

PurposeAssigned for neonates requiring the most complex care and prolonged hospital confinement.

DocumentationHumana uses peer‑reviewed literature definitions and all relevant documentation to validate diagnosis codes; codes not meeting requirements are excluded from DRG calculation.