Changes for Medicare

Thirty years ago, home oxygen was often provided by liquid oxygen.  Oxygen concentrators were coming on strong in the 1990s and very profitable for the Durable Medical Equipment (DME) suppliers.  In the mid-90s to 2006 Congress put pressure on Medicare to change how they were paying for oxygen deliveries and oxygen equipment to save money.   Concentrators began replacing liquid oxygen.  


On January 1, 2006, “the Centers for Medicare & Medicaid Services (CMS) issued a final rule that changes how Medicare will pay for oxygen and oxygen equipment and capped rental items and establishes new protections for beneficiaries who need these items.   Oxygen and oxygen equipment and capped rental items are paid under the Medicare Part B durable medical equipment (DME) benefit.  The final rule implements Section 5101 of the Deficit Reduction Act (DRA) requiring suppliers to transfer title of oxygen equipment to the beneficiary after 36 continuous months and capped rental items after 13 continuous months of rental payments.  This policy change, which is required by the Deficit Reduction Act of 2005 (DRA), will reduce Medicare expenditures and beneficiary coinsurance payments for the affected items of DME.

In addition, as part of this rule, CMS is using its statutory authority provided by the Balanced Budget Act 1997 (BBA) to establish separate payment classes and monthly payments for oxygen generating portable equipment (OGPE).  OGPE are new, alternative oxygen equipment technologies that meet all of the patient’s oxygen needs without delivery of oxygen contents.  CMS also used its authority to create separate classes for oxygen contents for stationary and portable oxygen equipment, resulting in an increase in the monthly payment amount from approximately $20.77 to $77.45 for delivery of portable oxygen contents for beneficiary-owned tanks and cylinders.  These policies are intended to implement the DRA payment changes for oxygen in a way that does not eliminate the incentive for suppliers to provide new cost-effective oxygen equipment technology and to ensure beneficiary access to portable oxygen contents in the event that they are still using traditional portable oxygen systems. 

From   CMS.gov Newsroom



Medicare expenditures and beneficiary coinsurance payments for the affected items of DME were reduced which was the main goal for CMS, not the health of those with COPD or other respiratory disorders.  The CMS final rule also ushered the domination of home and portable concentrators while almost ending the use liquid oxygen.  Home concentrators supply supplemental oxygen almost as well as tanks or liquid oxygen.  OGPE, commonly called pocs today, are unable to supply the mobile oxygen needed by most while tanks and liquid oxygen can.  Change POC Settings to Equal LPM

Now Medicare needs to start bringing liquid oxygen back.  It will allow those who need it to have a higher quality of life, remain healthier, and have fewer hospitalizations!  In the short term suppling liquid oxygen will cost Medicare money, but in the long term it will save money.  Many studies show that when people with COPD are active, have a higher quality of life and are healthier there are fewer hospitalizations.


Fast forward to 2020.  “Medicare covers oxygen equipment by renting it in five-year cycles, beginning when the individual first receives the oxygen equipment.  Although the rental period is for five years, Medicare only pays a monthly fee to the supplier for the first three years of the cycle.  This fee is a prospective bundled payment, meaning it covers delivery, back-up equipment, maintenance, supplies, and accessories in one payment.  Like other Part B services, Medicare only covers 80% of the rental fee, so individuals with Medicare or their secondary insurer are responsible for the other 20%.  Once the three years is up, Medicare (and any individual responsible for the 20% coinsurance) will stop paying the monthly rental fee but will still pay for oxygen tank refills and maintenance for the last two years of the cycle.

Even if the individual moves, exchanges their oxygen equipment, switches from tanks to a portable oxygen concentrator, or moves to a different supplier, their five-year cycle continues without restarting.  As a result, it can be very difficult for individuals to find a new supplier after a contract has started, since the new supplier will not be receiving the full three years of payments but will have to provide services for whatever is left of the five-year cycle. In cases like this, the supplier who received the prospective bundled payment should make arrangements to have a new supplier begin covering the oxygen.” 

From  Medicare Advocacy Toolkit, Oxygen Equipment, summer 2020.


I see no advantage in the five-year contract for consumers of supplemental oxygen.  A more flexible system is needed!  Liquid oxygen is not being taken advantage of in getting individuals like myself the oxygen we need.

If you are on supplemental oxygen and pocs won’t supply you with the oxygen you need, let your Physician know.  Ask for a prescription for liquid oxygen.  If you are unable to get liquid oxygen, go to your congress person.  Ask family, friends and caregivers to do the same the same.

We need liquid oxygen as an OPTION!!!

Contact   hors.sens1@gmail.com
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