Oxygen & Oxygen Equipment

Affected Providers

Physicians and non-physician practitioners who write prescriptions for oxygen and oxygen equipment.

HCPCS & CPT Codes

Local Coverage Determination (LCD): Oxygen and Oxygen Equipment (L33797) has the current HCPCS and CPT codes.

Background

According to the 2024 Medicare Fee-for-Service Supplemental Improper Payment Data, the improper payment rate for oxygen supplies and equipment is 11.3%, with a projected improper payment amount of $81 million.

You must meet the provisions in National Coverage Determination (NCD): Home Use of Oxygen (240.2). We outline other policy requirements in Article: Oxygen and Oxygen Equipment (A52514) and LCD L33797.

Denial Reasons

Insufficient documentation accounted for 59.3% of improper payments for oxygen supplies and equipment during the 2024 reporting period, while no documentation (3.6%) and other errors (37%) also caused improper payments. “Other” errors include duplicate payment, non-covered or unallowable service, or ineligible Medicare patient errors.

Preventing Denials

Nationally Covered Indications & Documentation

We cover home oxygen therapy and oxygen equipment for acute or chronic conditions, short- or long-term basis, when the patient shows hypoxemia.

We base the first oxygen therapy claims for hypoxemic patients on a clinical test their treating practitioner orders and evaluates. This test is usually a measurement of the partial pressure of oxygen (PO2) in arterial blood. We also accept an arterial oxygen saturation measurement obtained by ear or pulse oximetry when the patient’s treating practitioner orders, evaluates, and supervises it or when a qualified provider or lab services supplier performs it. We don’t consider a DME supplier to be a qualified provider or lab services supplier (but hospitals certified to do these tests are).

When you use both the arterial blood gas and oximetry studies to document the home oxygen therapy need and the results are conflicting, we prefer the arterial blood gas study for documenting medical need.

At the time of need, perform required qualifying arterial blood gas or oximetry studies. For patients at home, the time of need is when the treating practitioner presumes that providing oxygen will improve the patient’s condition. For hospital inpatients, the time of need is within 2 days of discharge. For patients whose first oxygen prescription doesn’t start during an inpatient hospital stay, the time of need is when the treating practitioner notes the signs and symptoms of illness that the patient can relieve by using oxygen at home.

We define patients showing hypoxemia using these clinical criteria:

• Group 1:
  • An arterial PO2 at or below 55 mm Hg, or an arterial oxygen saturation at or below 88%, taken at rest, breathing room air.
  • An arterial PO2 at or below 55 mm Hg, or an arterial oxygen saturation at or below 88%, taken during sleep for a patient who shows an arterial PO2 at or above 56 mm Hg, or an arterial oxygen saturation at or above 89%, while awake; or a greater than normal fall in oxygen level during sleep (decrease in arterial PO2 more than 10 mm Hg, or decrease in arterial oxygen saturation more than 5%) associated with symptoms or signs reasonably attributable to hypoxemia (for example, impairment of cognitive processes and nocturnal restlessness or insomnia). In either case, we provide coverage only for oxygen use during sleep, and then we’ll only cover 1 type of unit. We don’t cover portable oxygen in this situation.
  • An arterial PO2 at or below 55 mm Hg, or an arterial oxygen saturation at or below 88%, taken during exercise (defined as either the patient’s functional performance or a formal exercise test), for a patient who shows an arterial PO2 at or above 56 mm Hg, or an arterial oxygen saturation at or above 89%, during the day, while at rest. In this case, the provider provides supplemental oxygen during exercise if the oxygen use improves the hypoxemia shown during exercise when the patient was breathing room air.
• Group 2: Coverage is available for patients whose arterial PO2 is 56–59 mm Hg, or whose arterial blood oxygen saturation is 89%, and who have at least 1 of these:
  • Dependent edema suggesting congestive heart failure
  • Pulmonary hypertension or cor pulmonale, found by measuring pulmonary artery pressure, gated blood pool scan, echocardiogram, or “P” pulmonale on an electrocardiogram (EKG) (P wave greater than 3 mm in standard leads II, III, or AVFL)
  • Erythrocythemia with a hematocrit greater than 56%

In reviewing the arterial PO2 levels and the arterial oxygen saturation percentages specified above, Medicare Administrative Contractors (MACs) must consider variations in oxygen measurements that may result from the patient’s age, skin pigmentation, altitude level, or decreased oxygen carrying capacity.

Non-Covered

We won’t cover home oxygen therapy and oxygen equipment in these circumstances:

• Angina pectoris in the absence of hypoxemia. This condition generally isn’t the result of low oxygen level in the blood. There are other preferred treatments.
• Breathlessness without cor pulmonale or evidence of hypoxemia. Although intermittent oxygen use is sometimes prescribed to relieve this condition, it’s potentially harmful and psychologically addicting.
• Severe peripheral vascular disease resulting in clinically clear desaturation in 1 or more extremities. There’s no evidence that increased PO2 improves the oxygenation of tissues with impaired circulation.
• Terminal illnesses unless they affect the patient’s ability to breathe.

Portable Oxygen Systems

We cover a portable oxygen system if the patient is mobile within the home, and you did the qualifying blood gas study while they were at rest (awake) or during exercise. If you only did the qualifying blood gas study during sleep, we deny portable oxygen as not reasonable and necessary.

If the patient meets coverage criteria, usually we pay separately for a portable oxygen system and the stationary system. See exceptions in Article A52514.

If we cover a portable oxygen system, the supplier must provide whatever oxygen quantity the patient uses; Medicare’s payment is the same regardless of the quantity dispensed.

Documentation Requirements

To justify payment, you must meet specific requirements when ordering DMEPOS.