Overview
Medicare covers home oxygen therapy when patients meet specific testing requirements and the medical record demonstrates both the medical necessity and that oxygen will improve the patient’s condition in the home setting.
Testing Requirements
Patients must qualify through one of the following groups:
Group I Coverage (Most Common)
Requires a diagnosis that causes hypoxemia AND one of the following qualifying tests:
A. When Tested at Rest While Awake:
- Oxygen saturation ≤ 88% OR
- Arterial blood gas PO2 ≤ 55 mmHg
B. During Sleep (for patients with normal daytime oxygen levels):
- Oxygen saturation ≤ 88% OR
- Arterial blood gas PO2 ≤ 55 mmHg OR
- Decrease in oxygen saturation > 5% from baseline AND symptoms of hypoxemia (like cognitive dysfunction or restlessness)
C. During Exercise (if oxygen saturation/ABG normal at rest):
- Oxygen saturation ≤ 88% OR
- Arterial blood gas PO2 ≤ 55 mmHg
Common qualifying diagnoses include but are not limited to:
- COPD
- Interstitial lung disease
- Pulmonary fibrosis
- Bronchiectasis
- Cystic fibrosis
- Primary pulmonary hypertension
- Advanced heart failure
Group II Coverage
Oxygen saturation of 89% OR ABG PO2 56-59 mmHg AND one of:
- Dependent edema from heart failure
- Pulmonary hypertension or cor pulmonale
- Hematocrit > 56%
Group III Coverage
- For patients who don’t meet Group I or II criteria but have a condition documented in medical literature to improve with oxygen (e.g., cluster headaches)
Required Testing Documentation
Testing at Rest
- Single qualifying blood gas study performed while awake and at rest
- Must be done by treating practitioner or qualified laboratory/facility
- Can be either arterial blood gas or pulse oximetry
- Must be performed in-person (remote testing not accepted)
- Testing should be done while breathing room air. If done while patient is on oxygen, the results must still meet qualifying criteria
Testing During Exercise
- Three tests required in same testing session:
- Test at rest without oxygen
- Test during exercise without oxygen (this is the qualifying test)
- Test during exercise with oxygen to prove improvement
- Must be performed in-person by qualified medical professional
- "Recovery" testing after exercise does not qualify
Testing During Sleep
- Minimum 2-hour overnight oximetry study
- Can be facility-based or home-based testing
- Home testing must be:
- Ordered by treating practitioner
- Conducted through independent diagnostic testing facility (IDTF)
- Use tamper-proof equipment with downloadable data
- Results sent directly to treating practitioner
Special Requirements for Sleep Apnea Patients
- Must have sleep apnea adequately treated with PAP therapy first
- Qualifying test must be done after PAP therapy is optimized
- Must show AHI/RDI reduced to ≤10 events per hour on PAP
Equipment Coverage Rules
Stationary Concentrators
- Higher payment available if flow rate >4 LPM (requires additional testing on 4+ LPM)
- Qualifying test must be done after PAP therapy is optimized
Portable Systems (Gas Tanks or Concentrators)
- Only covered if patient qualifies through testing at rest or exercise
- Not covered if patient only qualifies through sleep testing
- Must be mobile within home to qualify for portable system
- Supplier must provide adequate contents/batteries for patient's needs
Documentation Tips
1. Medical record must clearly document:
- Qualifying test results with date and testing conditions
- Related diagnosis and symptoms
- Why oxygen therapy will help the patient
- Patient mobility status (for portable systems)
2. Treating practitioner notes can be supplemented with:
- Therapist evaluations
- Specialist consults
- Facility testing results
- Home health notes
3. Don’t include clinical information on the oxygen order/prescription – keep this in the medical record
4. Minor documentation deficiencies can be addressed through a dated addendum to the medical record
Additional Notes
- Prescriber must see patient within 30 days prior to ordering home oxygen
- For Group II patients, retesting is required between 61-90 days after starting oxygen
- Medical necessity must be ongoing for coverage to continue
- Suppliers cannot perform qualifying oxygen tests
We provide detailed guides with sample documentation language for specific conditions – contact us for these resources.
Need help qualifying a patient? Contact our clinical team to review documentation requirements for your specific situation.
