Durable Medical Equipment, Prosthetics, Orthotics and Supplies

Clinicians: Are You Ordering Oxygen for Your Patient?

Home use of oxygen and oxygen equipment is eligible for Medicare reimbursement only when a beneficiary meets all of the requirements set out in the CMS IOM, Publication 100-03, Medicare National Coverage Determinations (NCD) Manual, Chapter 1, Section 240.2 and the corresponding DME MAC Oxygen and Oxygen equipment LCD. When ordering oxygen therapy for a patient with Medicare, a blood gas study must be ordered and evaluated at the time of need. Time of need is defined as during the patient’s illness when it is presumed that oxygen therapy will improve the patient’s condition in the home setting. If the oxygen is initially prescribed at the time of hospital discharge, qualification testing must be performed within the 2 days prior to discharge home. Note that this 2-day prior to discharge rule does not apply to nursing facilities.

Claims for oxygen must be supported by medical documentation in the patient’s record:

  • A condition requiring the home use of oxygen;
  • The oxygen flow rate; and,
  • An estimate of the frequency, duration of use (e.g., two liters per minute, 10 minutes per hour, 12 hours per day), and duration of need (e.g., six months or lifetime); and,
  • Any concerns for variations in oxygen measurements that may result from such factors as the patients age, the patient’s skin pigmentation, that altitude level, or a decrease in oxygen carrying capacity (when applicable). 

The type of oxygen delivery system to be used must be specified (e.g., a stationary concentrator and portable gaseous tanks). If a portable system is ordered, there are specific requirements that must be included in the medical record, including that the patient is mobile within the home and that the qualifying blood gas study was performed either at rest or while exercising, but not while asleep. In addition, for scenarios where the beneficiary has different daytime and nighttime oxygen flow requirements, these values must be documented in the patient's medical record. This information is used by the DME supplier to determine the appropriate billing information for Medicare.

Medicare can make payment for home oxygen only when the patient's medical record shows that the beneficiary has a condition expected to improve with home oxygen therapy, and meets medical documentation, test results, and health conditions required for coverage.

The CERT contractor has identified multiple errors in claims received for oxygen equipment and supplies. These errors include:

  • Missing documentation of oxygen orders prior to claim submission.
  • No documentation to support continued need for home oxygen therapy.

For continued coverage of oxygen, documentation must be included in the medical record supporting continued medical need. If oxygen is initially prescribed for short term use, an evaluation of a repeat test is required as well as a new order.

DMEPOS suppliers are your partners in caring for your patient. They will not receive payment from Medicare for the items that are ordered if you do not provide information from your medical records when it is requested. Furthermore, not providing this information may result in your patients having to pay for the item themselves. To help patients, the DME suppliers and the Medicare Program, be sure to verify that the medical documentation supports the oxygen orders and CMNs as this allows Medicare to pay claims appropriately and efficiently.

For additional information and resources on Medicare's coverage of oxygen and oxygen equipment, visit the DME MAC contractor websites.

Reviewed 11/21/2024