Oxygen and Oxygen Equipment

Section 5101(b) of the Deficit Reduction Act (DRA) of 2005 established a 36 month (three year) limit, or cap, on monthly payments for stationary and portable oxygen equipment.

Contractors shall count as a month, the date the oxygen equipment was initially furnished to the day before the same date in the following month and each rental month thereafter until the 36th month anniversary is reached.

Payment for both oxygen contents used with stationary oxygen equipment and oxygen contents used with portable oxygen equipment is included in the 36 monthly payments for oxygen and oxygen equipment (stationary oxygen equipment payment) made for codes E0424, E0439, E1390, or E1391.

The supplier who furnished the oxygen equipment in the first month is required to continue furnishing the equipment for the entire 36 month period with certain exceptions:

  • Beneficiary relocates outside service area
  • Beneficiary elects to obtain oxygen equipment from another supplier
  • Certain cases granted by the DME MACs or CMS, such as in emergency situations
  • Item becomes subject to competitive bidding

Suppliers cannot switch oxygen equipment modalities during the 36 month period with a few exceptions:

  • Physician orders different equipment based on medical need
  • Beneficiary chooses new technology and signs an Advance Beneficiary Notice of Noncoverage (ABN) acknowledging potential financial liability

Replacement of Oxygen Equipment

If oxygen equipment is replaced because the equipment has been in continuous use by the patient for the equipment's reasonable useful lifetime or is lost, stolen, or irreparably damaged, the beneficiary may elect to obtain a new piece of equipment. In these situations, a new 36 month rental period and new reasonable useful lifetime starts on the date that the new replacement item is furnished.

Change in Oxygen Equipment During Reasonable Useful Lifetime Period

The reasonable useful lifetime for stationary or portable oxygen equipment begins when the oxygen equipment is first delivered to the beneficiary and continues until the point at which the stationary or portable oxygen equipment has been used by the beneficiary on a continuous basis for five years. Computation of the reasonable useful lifetime is not based on the age of the equipment.

A new reasonable useful lifetime or 36 month rental period does not start when:

  • Equipment modalities are changed
  • Equipment needs to be replaced due to not functioning properly
  • Beneficiary switches to new supplier and/or new equipment

Billing Contents

Following the stationary oxygen equipment payment cap, suppliers should bill for oxygen contents on the anniversary date of the oxygen equipment billing.

For subsequent months, the supplier does not need to deliver the oxygen contents every month in order to continue billing for the contents on a monthly basis. A maximum of three months of oxygen contents can be delivered at one time.

  • In these situations, the delivery date of the oxygen contents does not have to be the DOS (anniversary date) on the claim. However, in order to bill for contents for a specific month, the supplier must have previously delivered quantities of oxygen that are sufficient to last for one month following the date of service on the claim.
  • Suppliers should have proof of delivery for each actual delivery of oxygen, but as discussed above, this may be less often than monthly.

Beginning with dates of service on or after the end date of service for the month representing the 36th payment for code E0424, E0439, E0431, or E0434, the supplier may bill on a monthly basis for furnishing oxygen contents (stationary and/or portable), but only in accordance with the following chart:

Equipment Furnished in Month 36 Monthly Contents Payment after Stationary Cap
Oxygen Concentrator (E1390, E1391, or E1392) None
Portable Gaseous Transfilling Equipment (K0738) None
Portable Liquid Transfilling Equipment (E1399) None
Stationary Gaseous Oxygen System (E0424) Stationary Gaseous Contents (E0441)
Stationary Liquid Oxygen System (E0439) Stationary Liquid Contents (E0442)
Portable Gaseous Oxygen System (E0431) Portable Gaseous Contents (E0443)
Portable Liquid Oxygen System (E0434) Portable Liquid Contents (E0444)

Although suppliers should document the amount of contents (tanks or cylinders) provided, the content allowables are monthly fees and will not vary according to the number of units provided. The units of service for contents codes are always one. If the patient owns a stationary system and uses a portable system, the portable content fee is paid in addition to the stationary content fee.


The monthly payment amount for stationary oxygen is subject to adjustment depending on the amount of oxygen prescribed (liters per minute or LPM) and whether or not portable oxygen is also prescribed.

  • QA - Prescribed amounts of stationary oxygen for daytime use while at rest and nighttime use differ and the average of the two amounts is less than 1 LPM
  • QB - Prescribed amounts of stationary oxygen for daytime use while at rest and nighttime use differ and the average of the two amounts exceeds 4 LPM and portable oxygen is prescribed
  • QE Use if the prescribed amount of oxygen while at rest is less than 1 LPM
  • QF Use if the prescribed amount of oxygen while at rest exceeds 4 LPM and portable oxygen is prescribed
  • QG Use if the prescribed amount of oxygen while at rest is greater than 4 LPM
  • QH Use if an oxygen conserving device is being used with an oxygen delivery system
  • QR - Prescribed amounts of stationary oxygen for daytime use while at rest and nighttime use differ and the average of the two amounts is greater than 4 LPM
Last Updated May 10 , 2024