Changes in Medicare Payment for Oxygen and Oxygen Equipment

The Centers for Medicare & Medicaid Services (CMS) has announced new oxygen payment rules and supplier responsibilities required by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).  The final provisions implementing these changes were included as part of the final rule titled "Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B (CMS-1403-FC)". See the Related Links inside CMS.

The new rules permit the supplier to retain ownership of oxygen equipment after receiving payment for furnishing oxygen and oxygen equipment for 36 continuous months. The rental payment covers the equipment, contents, maintenance, and supplies and accessories such as tubing or a mouthpiece.  After the 36 month payment period, the supplier is required to continue furnishing the equipment, supplies, accessories, and contents and for ensuring the equipment is in good working order for any period of medical need for the remainder of the five year reasonable useful lifetime of the equipment.  There will be no additional Medicare payment for the equipment, supplies, accessories, or repairs for the remainder of the reasonable useful lifetime as Medicare's payments during the 36-month rental period cover all of these costs.  However, after 36 months, Medicare will pay for oxygen contents for gaseous or liquid oxygen equipment.  Also, Medicare will pay for one, in-home, routine maintenance and servicing visit for oxygen concentrators and transfilling equipment every 6 months during 2009 only, beginning six months after the end of the 36-month rental period.  This payment will be made if the supplier visits the beneficiary's home, performs any necessary maintenance and servicing, and inspects the equipment to ensure that it will function safely for the next 6 months.  CMS has solicited comments about whether maintenance and servicing payments should continue after 2009 as part of the rulemaking process.  

CMS will continue to provide additional program guidance over the next few months on specific policies and rules related to implementation of the changes to Medicare payment for oxygen and oxygen equipment mandated by both MIPPA and the Deficit Reduction Act of 2005.

Medicare payment for durable medical equipment (DME), prosthetics and orthotics (P&O), parenteral and enteral nutrition (PEN), surgical dressings, and therapeutic shoes and inserts is equal to 80 percent of the lower of either the actual charge for the item or the fee schedule amount calculated for the item, less any unmet deductible. The beneficiary is responsible for 20 percent of the lower of either the actual charge for the item or the fee schedule amount calculated for the item, plus any unmet deductible. The DME and P&O fee schedule payment methodology is mandated by section 4062 of the Omnibus Budget Reconciliation Act (OBRA) of 1987, which added section 1834(a) to the Social Security Act. OBRA of 1990 added a separate subsection, 1834(h), for P&O. The DME and P&O fee schedules were implemented on January 1, 1989 with the exception of the oxygen fee schedules, which were implemented on June 1, 1989. Section 13544 of OBRA of 1993, which added section 1834(i) to the Social Security Act, mandates a fee schedule for surgical dressings; the surgical dressing fee schedule was implemented on January 1, 1994. Section 4315 of the Balanced Budget Act of 1997, which added section 1842(s) to the Social Security Act, authorizes a fee schedule for PEN, which was implemented on January 1, 2002. Section 627 of the Medicare Modernization Act of 2003 mandates fee schedule amounts for therapeutic shoes and inserts effective January 1, 2005, calculated using the P&O fee schedule methodology in section 1834(h) of the Social Security Act.

Contact Information:

Who should you contact to determine which HCPCS code to use for billing?

PDAC Helpline:  877-735-1326

DURABLE MEDICAL EQUIPMENT (DME) CENTER
For a one-stop resource web page focused on the informational needs and interests of Medicare Fee-for-Service (FFS) DMEPOS suppliers, go to the DME Center (see under "Related Links Inside CMS" below).

Downloads
Oxygen Table 3a 2006 [PDF, 36KB] Oxygen Table 3b 2007 [PDF, 39KB] Oxygen Table 3c 2008 estimated [PDF, 40KB] Oxygen Table 3d 2009 estimated [PDF, 53KB] Oxygen Table 3e 2010 estimated [PDF, 54KB] Medicare Program; Payment for Respiratory Assist Devices With Bi-Level Capability and a Backup Rate (published in the Federal Register on January 27, 2006) [PDF, 86KB] Processing of Claims for External Ambulatory Insulin Infusion Pumps [PDF, 10KB] DME MAC Contacts [PDF, 16KB]
Related Links Inside CMS
CMS-1403-FC Special Edition MLN Matters Article (SE0628):  DME Medicare Administrative Contractors'Implementation - Information for Suppliers [PDF, 90KB] CMS Program Transmittals Durable Medical Equipment Center
Related Links Outside CMS
National Heritage Insurance Company (NHIC) DME MAC - Jurisdiction A National Government Services DME MAC - Jurisdiction B CIGNA DME MAC - Jurisdiction C Noridian DME MAC - Jurisdiction D

Page Last Modified: 11/06/2008 9:38:33 AM
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