When to Restart the 36-Month Oxygen Rental Period

A new 36-month oxygen rental period can be restarted only in certain circumstances. This article discusses three of these events.

1. Break in Medical Need

If the beneficiary enters a hospital or skilled nursing facility or joins a Medicare health maintenance organization (HMO) and continues to need oxygen, when the beneficiary returns home or rejoins traditional Medicare, payment resumes where it left off. If the need for or use of oxygen ends for less than 60 days plus the remainder of the rental month of discontinuation and then resumes, payment resumes where it left off. During the 36-month rental period, if need/use of oxygen ends for more than 60 days plus the remainder of the rental month of discontinuation, and new medical necessity is established, a new 36-month rental period will begin.

The blood gas study must be the most recent study obtained within 30 days prior to the initial date. The beneficiary must be seen and evaluated by the treating physician within 30 days of the date of initial certification.

If there is an interruption in medical necessity of greater than 60 days plus the days remaining in the last paid rental month, once the need resumes, the supplier will collect supporting documentation of the new medical need, including:

• A new prescription (detailed written order and written order prior to delivery, if required)
• A new initial certificate of medical need (CMN) with new qualifying oxygen test results performed within 30 days of new initial date
• Documentation supporting new medical need
• Documentation explaining interruption of need
• Documentation supporting length of interruption (e.g., pick up date, new delivery date)

The claim for the first month of the new rental period meeting the above documentation should include:

• New initial CMN
• Narrative statement, “Break in medical need greater than 60 days.”

During months 37 to 60, if need/use of oxygen ends for more than 60 days plus the remainder of the rental month of discontinuation and new medical necessity is established, a new rental period does not begin. The supplier that provided the oxygen equipment during the 36th rental month must provide all necessary items and services for the duration of the reasonable useful lifetime (RUL).

New CMN Requirements

Beginning with March 1, 2020, dates of service and for the duration of the COVID-19 public health emergency, there is no requirement to submit CMNs for oxygen equipment. Add the CR modifier to the HCPCS code(s) billed and “COVID-19” in the NTE 2400 (line note) or NTE 2300 (claim note) segments of the ANSI X12 for electronic claims or in item 19 for the CMS-1500 claim form. The Centers for Medicare & Medicaid Services (CMS) is discontinuing all CMNs and DME Information Forms (DIFs) starting Jan. 1, 2023.

2. Specific Incident of Damage Beyond Repair or the Item is Stolen or Lost

A specific incident of damage to equipment is required, such as equipment falling down a flight of stairs. A new 36-month cap rental period cannot be started if equipment is replaced due to malfunction, wear and tear, routine maintenance, or a need for repair. A new 36-month rental period and new reasonable useful lifetime (RUL) is started on the date that the replacement equipment is furnished to the beneficiary. Claims for the replacement of oxygen equipment for the first month of use only are billed using the HCPCS code for the new equipment and the RA modifier. The supplier must include on the claim for the first month of use a narrative explanation of the reason why the equipment was replaced and supporting documentation must be maintained in the supplier’s files.

Replacement Equipment Documentation

• Initial CMN & Claim for Replacement Equipment—The initial date should be the date of delivery of the replacement oxygen equipment. Claims for the initial rental month must have the RA modifier added to the HCPCS code for the equipment. Claims for the initial rental month must include a narrative explanation of the reason why the equipment was replaced and supporting documentation must be maintained in the supplier’s files.
• Initial & Recert CMN for Replacement Equipment—Repeat testing is not required. The supplier should enter the most recent qualifying value and test date. This test does not have to be within 30 days prior to the initial date. It can be the test result reported on the most recent prior CMN. There is no requirement for a physician visit that is specifically related to the completion of the CMN for replacement equipment.

3. End of the Reasonable Useful Lifetime

The RUL for oxygen equipment is five years. At any time after the end of the RUL, the beneficiary may elect to receive new equipment, thus beginning a new 36-month rental period. The five-year period begins on the initial date of service and runs for five years from that date. It is not based on the actual age of the equipment. The five-year period does not restart if there has been a change in oxygen modality, change out of equipment or change in supplier.

When the RUL of a beneficiary’s portable oxygen equipment differs from the RUL of the beneficiary’s stationary oxygen equipment, the RUL of the stationary oxygen equipment shall govern for both types of oxygen equipment, stationary and portable.

If the RUL end date of the portable oxygen equipment is before the RUL end date of the stationary oxygen equipment, the RUL end date of the portable oxygen equipment is extended to coincide with the RUL end date of the stationary oxygen equipment. If the RUL end date of the portable oxygen equipment is after the RUL end date of the stationary oxygen equipment, the end date of the RUL of the portable oxygen equipment is shortened to coincide with the RUL end date of the stationary oxygen equipment.

When the end date of the RUL of the stationary oxygen equipment occurs, the beneficiary may elect to obtain replacement of both the stationary and the portable oxygen equipment. If the beneficiary elects to obtain replacement of the stationary and the portable oxygen equipment, both types of oxygen equipment must be replaced at the same time, and a new 36-month rental period and new RUL is started for both the replacement stationary oxygen equipment and the replacement portable oxygen equipment.

A beneficiary who resides in a durable medical equipment competitive bidding area (CBA) may obtain replacement of both the stationary and portable oxygen systems only from a contract supplier with a competitive bidding contract for the CBA in which the beneficiary permanently resides.

If the beneficiary elects not to receive new equipment after the end of the five-year RUL,  and if the supplier retains title to the equipment, all elements of the payment policy for months 37 to 60 remain in effect. There is no separate payment for accessories or repairs. If the beneficiary was using gaseous or liquid oxygen equipment during the 36th rental month, payment can continue to be made for oxygen contents. If the beneficiary elects not to receive new equipment after the end of the five-year RUL and if the supplier transfers title of the equipment to the beneficiary, accessories, maintenance and repairs are statutorily not covered by Medicare. Contents are separately payable for beneficiary-owned gaseous or liquid systems.