Understand Oxygen Rental Periods

The 36-month oxygen rental period can restart in a number of circumstances. While some relate to a supplier’s business activities, there are important patient-related situations as well.

Damaged, Stolen or Lost Item

A specific incident of damage, such as equipment falling down a flight of stairs, is required here, as opposed to equipment that simply wears out over time. A new 36-month cap rental period cannot be started if equipment is replaced due to malfunction, wear and tear, routine maintenance or repair. A new 36-month rental period and new reasonable useful lifetime 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. For the first month of use, the supplier must include on the claim an explanation for replacement and supporting documentation must be maintained in the supplier’s files.

After 60-Day Break in Medical Need

If the beneficiary enters a hospital or SNF or joins a Medicare HMO and continues to use oxygen, then when the beneficiary returns home or rejoins Medicare FFS, the payment resumes where it left off. If the use of oxygen ends for less than 60 days plus the remainder of the rental month of discontinuation, then payment resumes where it left off. During the 36-month rental period, if the 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. For a new initial CMN, the blood-gas study must be the most recent study obtained within 30 days prior to the initial date. A beneficiary must be evaluated by the treating physician within 30 days prior to the date of initial certification. If there is an interruption in medical necessity of greater than 60 days plus days remaining in the last paid rental month, once the need resumes, the supplier will collect supporting documentation of the new medical need. The claim for the first month of the new rentals for medical need should include: (i) new Initial CMN; and (ii) the following statement: “Break in medical need greater than 60 days.” During months 37-60, 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 who provided the oxygen equipment during the 36th rental month must provide all necessary items and services for the duration of the reasonable useful lifetime.

Reasonable Useful Lifetime Period

The reasonable useful lifetime (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 does not restart if there has been a change in oxygen modality, equipment or 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 will govern for both. 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 stationary equipment RUL end date. 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 stationary equipment RUL end date. When the end date of the RUL of the stationary oxygen equipment occurs, the beneficiary may elect to obtain replacement of both. If the beneficiary elects to replace both, it must be done at the same time. A new 36-month rental period and new RUL is started for both pieces of equipment. If a beneficiary elects not to receive new equipment at the end of the five-year RUL and if the supplier retains title to the equipment, all elements of the payment policy for months 37-60 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.