Changes to the New Oxygen Equipment Medical Policy

Published in Respiratory & Sleep on March 17, 2023

ForecastingBy Ronda Buhrmester, Senior Director of Payer Relations and Reimbursement, VGM Government Relations

The industry has waited a long time for revisions to the oxygen equipment medical policy [local coverage determination (LCD)]. The new oxygen LCD and related policy article is available on both DME MACs’ websites. For those providers who supply home oxygen equipment, it’s vital to be familiar with the changes that are being implemented Jan. 1, 2023.

But before I get into the discussion of the changes, let’s begin with where it all started.

Times Are Changing

The oxygen equipment national coverage determination (NCD) became effective in October 1993. For perspective, in 1993, a gallon of gas was $1.17. The Chicago Bulls basketball franchise won its third straight NBA championship title known as the “the 3-peat.” Bill Clinton was the president of the United States, and Ruth Bader Ginsburg was appointed to the Supreme Court. The top five highest grossing films were Jurassic Park, Mrs. Doubtfire, The Fugitive, Schindler’s List, and The Firm. 

Times Have Changed

While times certainly changed between 1993 and 2022, the oxygen NCD itself did not. Since its inception, there have been very few minimal changes made to the policy. But in 2020, the NCD was opened because the Alliance for Headache Disorders Advocacy Group submitted a formal reconsideration for cluster headaches. It was during the time of the oxygen NCD being opened that we as an industry were informed by one of the medical directors with Medicare DME MACs that this was a once-in-a-lifetime opportunity to comment on the NCD requesting changes.

We in the industry got excited about this opportunity. We started holding meetings and digging through coverage determination to make a wish list of changes that we would like granted to the NCD. We thought one of our requests could be fulfilled because it would be a win for the industry. The comment period opened in 2020, with the final decision memo released on Sep. 27, 2021. As you can see, there is quite a timespan between the comment period to the final decision memo and now to the implementation date of the LCD which was Jan. 1, 2023.

Some of the Key Highlights From the New Medical Policy

  • Elimination of the CMS CMN-484 (initial, recert, and revised)
  • Removal of alternative treatment language
  • Oxygen testing is performed during “time of need”
  • Removing chronic stable state language and allowing for both acute and chronic conditions
  • Coverage criteria by Group (Group I, Group II, Group III, Group IV)
  • Continued documentation after initial coverage for each group 

Now, let’s take a look at what each of these key highlights means for our industry. 

Elimination of the CMS CMNs and DIFs

For service dates on or after Jan. 1, 2023, all CMS CMNs (only five left) are being eliminated. The five CMS CMNs that are eliminated are oxygen, TENS units, seat lift mechanisms, bone stimulators, and pneumatic compression devices. The DIFs for enteral, parenteral, and external infusion pumps are also eliminated. The CMN elimination applies to initial, revised, and recert CMNs.


The coverage criteria outlined within the medical policy (LCDs) are still required. Medical records include the treating/referring practitioner and supporting medical documentation such as a nurse, RT, PT, OT, and other practitioner patient notes.

For those providers who are concerned about the elimination of the CMNs and DIFs, the CMS Program Integrity Manual (PIM) clearly states that a CMN and DIF are not part of the medical record, which means these CMS forms are strictly claims processing tools.

CMNs Eliminated

By having the CMS CMNs eliminated, the claim will process in a timelier manner because there is no wait for a treating practitioner to complete the form.

Please note: If a CMN is attached to a claim with a date of service on or after Jan. 1, 2023, the claim will be rejected. This means the claim will not be processed because it’s a front-end rejection. Be sure to monitor the front-end rejections daily to avoid disruptions in payments.

Removal of Alternative Treatment Language

The old language stated:

The treating physician’s prescription, or other medical documentation, must indicate that other forms of treatment (e.g., medical and physical therapy directed at secretions, bronchospasm, and infection) have been tried, have not been sufficiently successful, and oxygen therapy is still required. While there is no substitute for oxygen therapy, each patient must receive optimum therapy before long-term home oxygen therapy is ordered.

CMS believes it is clinically appropriate to remove this requirement because there are clinical circumstances for which this policy requirement is not relevant. CMS believes it is clinically inappropriate to withhold oxygen in the home for hypoxemic patients while awaiting the results of other therapeutic measures to take effect. CMS believes it is the treating practitioner’s responsibility to evaluate any patient who needs oxygen to provide other therapeutic interventions as needed.

The new medical policy has removed the language of alternative treatments that caused so many problems with audits. 

Oxygen Testing Is Performed During “Time of Need”

Within the previous medical policy, oxygen testing was performed within 30 days of the initial date of certification or within two days prior to discharge from an inpatient hospital stay. Time of need is defined as during the patient’s illness when the presumption is that the provision of oxygen in the home setting will improve the patient’s condition. This means that within 30 days the test window has been removed. For an inpatient hospital patient, the time of need is within two days of discharge.

Bottom line: For those patients whose initial oxygen prescription does not originate during an inpatient hospital stay, the time of need is during the period when the treating practitioner notes signs and symptoms of illness that can be relieved by oxygen in the patient who is to be treated at home. 

Removing Chronic Stable State Language and Allowing for Both Acute and Chronic Conditions

The old policy language stated that “Chronic stable state” is used in the NCD to describe illness or disease that is “not during a period of an acute illness or an exacerbation of their underlying disease.” Because the characteristics of cluster headaches do not fit an illness or disease in its chronic stable state since home oxygen is used to halt acute symptoms, which in most cases would be expected to occur in bouts of short duration (as compared to the symptoms of a lifelong chronic disease) and therefore only require short bursts of oxygen.

Chronic stable state

By removing the clinical criterion of “chronic stable state,” Medicare is also expanding the availability of home use of oxygen to patients with resolving respiratory diseases who may benefit from oxygen in the short term (e.g., weeks instead of lifetime) as they recover from an acute, curable illness.

Coverage Criteria by Group (Group I, Group II, Group III, Group IV)

Oxygen is now being identified by four different groups.

For both Group I and II, initial coverage of home oxygen therapy equipment is reasonable and necessary if ALL the following conditions are met:

  1. The treating practitioner has ordered and evaluated the results of a qualifying blood gas study performed at the time of need
  2. The beneficiary’s blood gas study meets the criteria stated in the policy
  3. The qualifying blood gas study was performed by a treating practitioner or by a qualified provider, or supplier, of laboratory services
  4. The provision of oxygen equipment in the home setting will improve the beneficiary’s condition

The three types of testing requirements

When testing is performed, blood gas study refers to either a pulse oximetry test or an ABG test. The three types of testing requirements remain the same, either on room air at rest, during exercise (which requires three test results) or during sleep.

Continued Documentation After Initial Coverage for Each Group

For continued payment and qualifications, we were all familiar with the requirements related to recertification. This has all changed—remember, no more CMS CMNs.

To continue payment of oxygen equipment claims, there must be evidence in the medical record documenting certain requirements for Group I, Group II, and Group III.

In Review

In summary, there have been several changes to the oxygen LCD that continue to encourage suppliers to review the LCD. In addition, I have hosted several webinars that are recorded and available for listening.

Webinar Recordings Available

Thursday, Nov. 17, 2022
Tuesday, Nov. 29, 2022
Thursday, Dec. 15, 2022

As always, we at VGM will monitor the changes that impact your business. And if you ever have any questions, please do not hesitate to reach out to me or anyone on my team. On behalf of all of us, thank you for the work you do to care for patients.


VGM Playbook Forecasting 2023This article was originally featured in the VGM Playbook: Forecasting 2023. To read the full article and more like this, download your copy of the playbook today


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