For any item to be covered by Medicare, it must 1) be eligible for a defined Medicare benefit category, 2) be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, and 3) meet all other applicable Medicare statutory and regulatory requirements. For the items addressed in this medical policy, the criteria for reasonable and necessary are defined by the following indications and limitations of coverage and/or medical necessity.

For an item to be covered by Medicare, a written signed and dated order must be received by the supplier before a claim is submitted to the DMERC. If the supplier bills for an item addressed in this policy without first receiving the completed order, the item will be denied as not medically necessary.

Home oxygen therapy is covered only if all of the following conditions are met:

1. The treating physician has determined that the patient has a severe lung disease or hypoxia-related symptoms that might be expected to improve with oxygen therapy
2. The patient's blood gas study meets the criteria stated below
3. The qualifying blood gas study was performed by a physician or by a qualified provider or supplier of laboratory services
4. The qualifying blood gas study was obtained under the following conditions:
   • If the qualifying blood gas study is performed during an inpatient hospital stay, the reported test must be the one obtained closest to, but no earlier than 2 days prior to the hospital discharge date, or
   • If the qualifying blood gas study is not performed during an inpatient hospital stay, the reported test must be performed while the patient is in a chronic stable state, i.e. not during a period of acute illness or an exacerbation of the underlying disease
5. Alternative treatment measures have been tried or considered and deemed clinically ineffective.

Group I criteria include any of the following:

1. An arterial PO₂ at or below 55 mm Hg or an arterial oxygen saturation at or below 88 percent taken at rest (awake)
2. An arterial PO₂ at or below 55 mm Hg, or an arterial oxygen saturation at or below 88 percent, for at least 5 minutes taken during sleep for a patient who demonstrates an arterial PO₂ at or above 56 mm Hg or an arterial oxygen saturation at or above 89% while awake
3. A decrease in arterial PO₂ more than 10 mm Hg, or a decrease in arterial oxygen saturation more than 5 percent, for at least 5 minutes taken during sleep associated with symptoms or signs reasonably attributable to hypoxemia (e.g., cor pulmonale, "P" pulmonale on EKG, documented pulmonary hypertension and erythrocytosis)
4. An arterial PO₂ at or below 55 mm Hg or an arterial oxygen saturation at or below 88 percent, taken during exercise for a patient who demonstrates an arterial PO₂ at or above 56 mm Hg or an arterial oxygen saturation at or above 89 percent during the day while at rest. In this case, oxygen is provided for during exercise if it is documented that the use of oxygen improves the hypoxemia that was demonstrated during exercise when the patient was breathing room air.

Initial coverage for patients meeting Group I criteria is limited to 12 months or the physician-specified length of need, whichever is shorter. (Refer to the Documentation section for information on recertification.)

Group II criteria include the presence of (a) an arterial PO₂ of 56-59 mm Hg or an arterial blood oxygen saturation of 89 percent at rest (awake), during sleep for at least 5 minutes, or during exercise (as described under Group I criteria) and (b) any of the following:

1. Dependent edema suggesting congestive heart failure
2. Pulmonary hypertension or cor pulmonale, determined by measurement of pulmonary artery pressure, gated blood pool scan, echocardiogram, or "P" pulmonale on EKG (P wave greater than 3 mm in standard leads II, III, or AVF)
3. Erythrocythemia with a hematocrit greater than 56 percent.

Initial coverage for patients meeting Group II criteria is limited to 3 months or the physician specified length of need, whichever is shorter. (Refer to the Documentation section for information on recertification.)

Group III includes patients with arterial PO₂ levels at or above 60 mm Hg or arterial blood oxygen saturations at or above 90 percent. For these patients there is a rebuttable presumption of noncoverage.

For all the sleep oximetry criteria described above, the 5 minutes does not have to be continuous.

If all of the coverage conditions specified above are not met, the oxygen therapy will be denied as not medically necessary. Oxygen therapy will also be denied as not medically necessary if any of the following conditions are present:

1. Angina pectoris in the absence of hypoxemia. This condition is generally not the result of a low oxygen level in the blood and there are other preferred treatments.
2. Dyspnea without cor pulmonale or evidence of hypoxemia.
3. Severe peripheral vascular disease resulting in clinically evident desaturation in one or more extremities but in the absence of systemic hypoxemia. There is no evidence that increased PO₂ will improve the oxygenation of tissues with impaired circulation.
4. Terminal illnesses that do not affect the respiratory system.

The qualifying blood gas study must be one that complies with the Fiscal Intermediary or Local Carrier policy on the standards for conducting the test and is covered under Medicare Part A or Part B. This includes a requirement that the test be performed by a provider who is qualified to bill Medicare for the test - i.e. a Part A provider, a laboratory, an Independent Diagnostic Testing Facility (IDTF), or a physician. A supplier is not considered a qualified provider or a qualified laboratory for purpose of this policy. Blood gas studies performed by a supplier are not acceptable. In addition, the qualifying blood gas study may not be paid for by any supplier. This prohibition does not extend to blood gas studies performed by a hospital certified to do such tests.

For sleep oximetry studies, the oximeter provided to the patient must be tamper-proof and must have the capability to download data that allows documentation of the duration of oxygen desaturation below a specified value.

The qualifying blood gas study may be performed while the patient is on oxygen as long as the reported blood gas values meet the Group I or Group II criteria.

For Initial Certifications, the blood gas study reported on the Certificate of Medical Necessity (CMN) must be the most recent study obtained prior to the Initial Date indicated in Section A of the CMN and this study must be obtained within 30 days prior to that Initial Date. There is an exception for patients who were on oxygen in a Medicare HMO and who have transitioned to fee-for-service Medicare. For those patients, the blood gas study does not have to be obtained 30 days prior to the Initial Date, but must be the most recent test obtained while in the HMO.

For patients initially meeting Group I criteria, the most recent blood gas study prior to the thirteenth month of therapy must be reported on the Recertification CMN.

For patients initially meeting Group I criteria, if the estimated length of need on the Initial CMN is less than lifetime and the physician wants to extend coverage, a repeat blood gas study must be performed within 30 days prior to the date of the Revised Certification.

For patients initially meeting Group II criteria, the most recent blood gas study which was performed between the 61st and 90th day following Initial Certification must be reported on the Recertification CMN. If a qualifying test is not obtained between the 61st and 90th day of home oxygen therapy, but the patient continues to use oxygen and a test is obtained at a later date, if that test meets Group I or II criteria, coverage would resume beginning with the date of that test. For patients initially meeting Group II criteria, if the estimated length of need on the Initial CMN is less than lifetime and the physician wants to extend coverage, a repeat blood gas study must be performed within 30 days prior to the date of the Revised Certification.

For any Revised CMN, the blood gas study reported on the CMN must be the most recent test performed prior to the Revised date.

A repeat blood gas study may be requested at any time at the discretion of the DMERC.

When both arterial blood gas (ABG) and oximetry tests have been performed on the same day under the same conditions (i.e., at rest/awake, during exercise, or during sleep), the ABG result will be used to determine if the coverage criteria were met. If an ABG test at rest/awake is nonqualifying, but an exercise or sleep oximetry test on the same day is qualifying, the oximetry test result will determine coverage.

The patient must be seen and evaluated by the treating physician within 30 days prior to the date of Initial Certification. The patient must be seen and re-evaluated by the treating physician within 90 days prior to the date of any Recertification. If the patient is not seen and re-evaluated within 90 days prior to Recertification but is subsequently seen, payment can be made for dates of service between the scheduled Recertification date and the physician visit date if the blood gas study criteria are met.

PORTABLE OXYGEN SYSTEMS:
A portable oxygen system is covered if the patient is mobile within the home and the qualifying blood gas study was performed while at rest (awake) or during exercise. If the only qualifying blood gas study was performed during sleep, portable oxygen will be denied as not medically necessary.

If coverage criteria are met, a portable oxygen system is usually separately payable in addition to the stationary system. (See exception in Liter Flow Greater Than 4 LPM.)

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

LITER FLOW GREATER THAN 4 LPM:
If basic oxygen coverage criteria have been met, a higher allowance for a stationary system for a flow rate of greater than 4 liters per minute (LPM) will be paid only if a blood gas study performed while the patient is on 4 LPM meets Group I or II criteria. If a flow rate greater than 4 LPM is billed and the coverage criterion for the higher allowance is not met, payment will be limited to the standard fee schedule allowance.

If a patient qualifies for additional payment for greater than 4 LPM of oxygen and also meets the requirements for portable oxygen, payment will be made for either the stationary system (at the higher allowance) or the portable system (at the standard fee schedule allowance for a portable system), but not both. In this situation, if both a stationary system and a portable system are billed for the same rental month, the portable oxygen system will be denied as not separately payable.

OXYGEN CONTENTS:
Oxygen contents are included in the allowance for rented oxygen systems. Stationary oxygen contents (E0441, E0442) are separately payable only when the coverage criteria for home oxygen have been met and they are used with a patient owned stationary gaseous or liquid system respectively. Portable contents (E0443, E0444) are separately payable only when the coverage criteria for home oxygen have been met and:

1. The beneficiary owns a concentrator and rents or owns a portable system, or
2. The beneficiary rents or owns a portable system and has no stationary system (concentrator, gaseous, or liquid).

If the criteria for separate payment of contents are met, they are separately payable regardless of the date that the stationary or portable system was purchased.

OXYGEN ACCESSORIES:
Accessories, including but not limited to, cannulas (A4615), humidifiers (E0555), masks (A4620, A7525), mouthpieces (A4617), nebulizer for humidification (E0580), oxygen conserving devices (A9900), regulators (E1353), stand/rack (E1355), transtracheal catheters (A4608), and tubing (A4616) are included in the allowance for rented systems. The supplier must provide any accessory ordered by the physician. Accessories are separately payable only when they are used with a patient-owned system that was purchased prior to June 1, 1989. Accessories used with a patient-owned system that was purchased on or after June 1, 1989 will be denied as noncovered.

TRAVEL OXYGEN:
If a beneficiary travels out of their supplier’s usual service area, it is the beneficiary’s responsibility to arrange for oxygen during their travels. Medicare will only pay one supplier for oxygen during any one rental month.

Oxygen services furnished by an airline to a beneficiary are noncovered. Payment for oxygen furnished by an airline is the responsibility of the beneficiary and not the responsibility of the supplier.

MISCELLANEOUS:
Only rented oxygen systems (E0424, E0431, E0434, E0439, E1390RR, E1391RR) are eligible for coverage. Purchased oxygen systems (E0425, E0430, E0435, E0440, E1390NU, E1390UE, E1391NU, E1391UE) will be denied as noncovered.

Emergency or stand-by oxygen systems will be denied as not medically necessary since they are precautionary and not therapeutic in nature.

Oximeters (E0445) and replacement probes (A4606) will be denied as noncovered because they are monitoring devices that provide information to physicians to assist in managing the patient’s treatment.

Topical hyperbaric oxygen chambers (A4575) will be denied as not medically necessary.

Respiratory therapists' services are noncovered under the DME benefit.

For gaseous or liquid oxygen systems or contents, report one unit of service for one month rental. Do not report in cubic feet or pounds.

The appropriate modifier must be used if the prescribed flow rate is less than 1 LPM (QE) or greater than 4 LPM (QF or QG). These modifiers may only be used with stationary gaseous (E0424) or liquid (E0439) systems or with an oxygen concentrator (E1390, E1391). They must not be used with codes for portable systems or oxygen contents.

Claims for oxygen contents and/or oxygen accessories should not be submitted in situations in which they are not separately payable (see above).

Code E1391 (Oxygen concentrator, dual delivery port) is used in situations in which two beneficiaries are both using the same concentrator. In this situation, this code should only be billed for one of the beneficiaries.

Suppliers should contact the Statistical Analysis Durable Medical Equipment Regional Carrier (SADMERC) for guidance on the correct coding of these items.

Section 1833(e) of the Social Security Act precludes payment to any provider of services unless "there has been furnished such information as may be necessary in order to determine the amounts due such provider" (42 U.S.C. section 13951(e)). It is expected that the patient's medical records will reflect the need for the care provided. The patient's medical records include the physician's office records, hospital records, nursing home records, home health agency records, records from other healthcare professionals and test reports. This documentation must be available to the DMERC upon request.

An order for each item billed must be signed and dated by the treating physician, kept on file by the supplier, and made available to the DMERC upon request. Items billed to the DMERC before a signed and dated order has been received by the supplier must be submitted with an EY modifier added to each affected HCPCS code.

A Certificate of Medical Necessity (CMN) which has been completed, signed, and dated by the treating physician must be kept on file by the supplier and made available to the DMERC on request. The CMN may act as a substitute for a written order if it is sufficiently detailed. The CMN for home oxygen is HCFA Form 484. In addition to the order information that the physician enters in Section B, the supplier can use the space in Section C for a written confirmation of other details of the oxygen order or the physician can enter the other details directly, e.g. the means of oxygen delivery (cannula, mask, etc.) and the specifics of varying oxygen flow rates and/or noncontinuous use of oxygen.

For patients who qualify for oxygen coverage based only on a sleep oximetry study, the oxygen saturation value reported in question 1b of the Oxygen CMN must be the lowest value (not related to artifact) during the 5 minute qualifying period reported on the sleep oximetry study. A report of the sleep study documenting the qualifying desaturation must be available to the DMERC on request.

If both an arterial blood gas and oximetry test have been performed on the same day under the condition reported on the CMN (i.e., at rest/awake, during exercise, or during sleep), the ABG PO₂ must be reported on the CMN.

An Initial, Recertification, or Revised CMN must be submitted to the DMERC in the situations described below. The Initial Date, Recertification Date, and Revised Date specified below refer to the dates reported in Section A of the CMN.

INITIAL CMN IS REQUIRED:

• With the first claim to the DMERC for home oxygen (even if the patient was on oxygen prior to Medicare eligibility or oxygen was initially covered by a Medicare HMO).
• When an Initial CMN does not meet coverage criteria and the patient was subsequently retested and meets coverage criteria. The Initial Date on this new CMN is the date of the subsequent qualifying blood gas study.
• When there has been a change in the patient’s condition that has caused a break in medical necessity of at least 60 days plus whatever days remain in the rental month during which the need for oxygen ended. (This indication does not apply if there was just a break in billing because the patient was in a hospital, nursing facility, hospice, or Medicare HMO, but the patient continued to need oxygen during that time.)
• When a Group I patient with a length of need less than or equal to 12 months was not retested prior to Revised Certification/ Recertification, but a qualifying study was subsequently performed. The Initial Date on this new CMN is the date of the subsequent qualifying blood gas study.
• When the patient initially qualified in Group II, repeat blood gas studies were not performed between the 61st and 90th day of coverage, but a qualifying study was subsequently performed. The Initial Date on this new CMN is the date of the subsequent qualifying blood gas study.
• When there was a change of supplier due to an acquisition and the previous supplier did not file a recertification when it was due and the requirements for the recertification were not met when it was due. The Initial Date on this new CMN is the date of the subsequent qualifying blood gas study.

The blood gas study reported on the Initial CMN must be the most recent study obtained prior to the Initial Date and this study must be obtained within 30 days prior to that Initial Date. There is an exception for patients who were on oxygen in a Medicare HMO and who transition to fee-for-service Medicare. For those patients, the blood gas study does not have to be obtained 30 days prior to the Initial Date, but must be the most recent test obtained while in the HMO.

RECERTIFICATION CMN IS REQUIRED:

• 3 months after Initial Certification (i.e. with the fourth month's claim) if oxygen test results on the Initial Certification are in Group II. The blood gas study reported must be the most recent study which was performed between the 61st and 90th day following the Initial Date.
• 12 months after Initial Certification (i.e. with the thirteenth month’s claim) if oxygen test results on the Initial Certification are in Group I. The blood gas study reported must be the most recent blood gas study prior to the thirteenth month of therapy.
• In other situations at the discretion of the DMERC. The blood gas study reported must be the most recent study which was performed within 30 days prior to the Recertification Date.

If a Group I patient with a lifetime length of need was not seen and evaluated by the physician within 90 days prior to the 12 month Recertification but was subsequently seen, the date on Recertification CMN should be the date of the physician visit.

If there was a change of supplier due to an acquisition and the previous supplier did not file a recertification when it was due but all the requirements for the recertification were met when it was due, a Recertification CMN would be filed with the recertification date being 12 or 3 months after the Initial Date depending on whether the Initial Certification was based on Group I or Group II criteria.

REVISED CMN IS REQUIRED:

• When the prescribed maximum flow rate changes from one of the following categories to another: (a) less than 1 LPM, (b) 1-4 LPM, (c) greater than 4 LPM. If the change is from category (a) or (b) to category (c), a repeat blood gas study with the patient on 4 LPM must be performed within 30 days prior to the start of the greater than 4 LPM flow.
• When a portable oxygen system is added subsequent to Initial Certification of a stationary system. In this situation, there is no requirement for a repeat blood gas study unless the initial qualifying study was performed during sleep, in which case a repeat blood gas study must be performed while the patient is at rest (awake) or during exercise within 30 days prior to the Revised Date.
• When a stationary system is added subsequent to Initial Certification of a portable system. In this situation, there is no requirement for a repeat blood gas study.
• When the length of need expires, if the physician has specified less than lifetime length of need on the most recent CMN. In this situation, a blood gas study must be performed within 30 days prior to the Revised Date.
• When there is a new treating physician but the oxygen order is the same. In this situation, there is no requirement for a repeat blood gas study. Note: In this situation, the Revised CMN does not have to be submitted with the claim but must be kept on file by the supplier.

If there is a new supplier, that supplier must be able to provide the DMERC with an original CMN on request. (An original CMN is a CMN which has a physician’s original signature on it. It is not necessarily an Initial CMN or the first CMN for that patient.) If the supplier obtains a new CMN, it would be considered a Revised CMN. In this situation, if the oxygen order is the same, the CMN does not have to be submitted with the claim.

Submission of a Revised CMN does not change the Recertification schedule specified above.

If the indications for a Revised CMN are met at the same time that a Recertification CMN is due, file the CMN as a Recertification CMN.

MISCELLANEOUS:
In the following situations, a new order must be obtained and kept on file by the supplier, but neither a new CMN nor a repeat blood gas study are required:

• Prescribed maximum flow rate changes but remains within one of the following categories:
  1. less than 1 LPM
  2. 1-4 LPM
  3. greater than 4 LPM
• Change from one type of system to another (i.e., concentrator, liquid, gaseous).

A new CMN is not required just because a patient changes from Medicare secondary to Medicare primary.

A new CMN is not required just because the supplier changes assignment status on the submitted claim.

Refer to the Supplier Manual for more information on documentation requirements.