Medicare treats home oxygen differently from almost every other piece of durable medical equipment. You don’t buy it, and you usually don’t pick the brand. You qualify through a specific blood-oxygen test, then rent from a Medicare-enrolled supplier under a fixed 36-month payment cycle. This guide walks through the rules as written in medicare.gov’s oxygen coverage page and the CMS contractors’ Local Coverage Determination, LCD L33797, Oxygen and Oxygen Equipment.
Who qualifies
Medicare.gov summarizes eligibility as three conditions. Your provider says you aren’t getting enough oxygen, your health might improve with oxygen therapy, and your arterial blood gas level falls within a certain range. Some conditions not tied to blood gases, such as cluster headaches, may also qualify (medicare.gov).
The LCD sets the detail. Initial coverage for Groups I and II requires all four of the following (L33797):
- Your treating practitioner ordered and evaluated a qualifying blood gas study performed at the time of need.
- The result meets the group criteria below.
- The test was done by a treating practitioner or a qualified provider or laboratory. Tests performed by a DME supplier are not acceptable.
- Oxygen at home will improve your condition.
The qualifying numbers
| Group | Qualifying result | What it covers |
|---|---|---|
| I (1) | PO2 ≤ 55 mm Hg or SaO2 ≤ 88% at rest, awake, on room air | Home oxygen |
| I (2) | PO2 ≤ 55 mm Hg or SaO2 ≤ 88% during sleep, when awake values are ≥ 56 mm Hg / ≥ 89% | Oxygen during sleep only |
| I (3) | During sleep, a drop in PO2 of more than 10 mm Hg or saturation more than 5% from baseline, with symptoms of hypoxemia | Oxygen during sleep only |
| I (4) | PO2 ≤ 55 mm Hg or SaO2 ≤ 88% during exercise, when resting daytime values are ≥ 56 mm Hg / ≥ 89% | Portable oxygen while awake and exercising |
| II | PO2 56–59 mm Hg or SaO2 89%, plus dependent edema suggesting heart failure, pulmonary hypertension or cor pulmonale, or hematocrit > 56% | Home oxygen |
| III | No hypoxemia, but a condition shown in high-quality literature to improve with oxygen (e.g. cluster headaches) | Home oxygen |
Source: CMS LCD L33797. The LCD also lists Group IV conditions that are denied, including angina without hypoxemia and breathlessness without cor pulmonale or evidence of hypoxemia.
How the test must be done
- In person. Oxygen qualification testing must be done in person by a treating practitioner or other qualified professional. Unsupervised or remotely supervised home testing doesn’t count, with one exception: overnight oximetry.
- Exercise testing. Three oximetry results must be recorded in the same session: at rest without oxygen, exercising without oxygen, and exercising with oxygen. Only the exercising-without-oxygen result qualifies you. “Recovery” readings taken after exercise don’t count.
- Overnight oximetry at home. This is allowed when directed by a Medicare-enrolled Independent Diagnostic Testing Facility (IDTF), using a sealed, tamper-proof oximeter that records at least 2 hours. The DME supplier may deliver the unit but may not instruct you or touch the results.
- Sleep apnea. If you have obstructive sleep apnea, the apnea must be treated first. A qualifying saturation (≤ 88%) can only come from a titration sleep study once PAP settings are optimized. Qualifying this way covers stationary equipment only.
Portable oxygen
The LCD covers a portable oxygen system for Groups I and II if you are mobile within the home and the qualifying test was done at rest (awake) or during exercise. If your only qualifying test was during sleep, portable oxygen is denied. When covered, a portable system is usually paid separately in addition to the stationary system, and the supplier must provide whatever quantity of oxygen you use (L33797).
Medicare.gov adds that if your provider decides your equipment no longer works for you, the supplier must provide equipment that fits your needs, “including your mobility needs both inside and outside your home”. The supplier can’t change your equipment type each month unless your doctor orders it (medicare.gov).
What you pay, and the 36-month cycle
Per medicare.gov:
- Your share: 20% of the Medicare-approved amount after the Part B deductible.
- Rental: you rent from the supplier for 36 months. The monthly payment covers the equipment, all refills of tanks or cylinders, tubing and other supplies and accessories, and maintenance and servicing.
- After 36 months: Medicare stops paying for the equipment. The supplier must keep providing it for as long as you need it, up to 5 years from when you started.
- Maintenance after month 36: if you use a concentrator or a home fill system, you may owe coinsurance every 6 months for maintenance visits, starting 6 months after the 36-month period ends. The supplier can charge only if it actually comes to your home to inspect and service the equipment.
- After 5 years: the supplier is no longer obligated. If you still need oxygen you get new equipment, from the same or a different supplier, and a new 36-month payment period begins.
Oxygen is a bundled payment. The LCD says options, supplies and accessories billed separately are denied as “unbundling”. High-flow above 4 LPM gets a higher stationary allowance only if the qualifying test was done while you were on 4 LPM or more (L33797).
Choosing a supplier
Medicare pays only for DME from suppliers enrolled in Medicare. Medicare.gov advises asking whether a supplier participates in Medicare or accepts assignment before you get equipment. Ask each supplier:
- Do you accept assignment for all rental months?
- Which stationary and portable models do you supply? Is a portable concentrator available, or only tanks?
- How do refills, service visits and after-hours problems work?
When paying cash makes sense
Some people buy outright because they don’t meet the LCD thresholds, want a specific portable model, or want a second unit for travel. Cash purchases still need a prescription. HHZ’s home concentrator guide and portable concentrator guide list USD prices.
Verdict
If you have Original Medicare and your test meets the LCD thresholds, rent through a Medicare-enrolled supplier that accepts assignment. Your cost is limited to 20% of the approved amount, and the supplier carries maintenance and service for up to 5 years. Make sure the qualifying test is done correctly: in person (or by IDTF overnight oximetry), at rest or with exercise if you want portable coverage, and not by the supplier. Buy for cash only when coverage doesn’t fit how you live.
Oxygen with CPAP
If you use oxygen with your CPAP at night, see using CPAP with oxygen for machine limits and the safe on/off order.
Choosing portable equipment
See pulse dose vs continuous flow and sleeping with a portable concentrator.
Related COPD and home oxygen guides
See switching your Medicare oxygen supplier, oxygen cylinders vs concentrators and oxygen saturation targets for COPD.
If you’re choosing a plan, see Medicare Advantage vs Original Medicare for DME.
See also: Medigap and DME costs, competitive bidding and power outage plan.