November 10 , 2008

The Medicare program just announced revisions to its home oxygen rules to implement a new law that Congress passed this summer. If you have been renting oxygen equipment from Medicare (the rules don’t impact you if you already own your oxygen equipment) you should be aware of some of the important changes that will take effect January 1, 2009.

New Rental Cap

If you were on oxygen as of December 31, 2005, previous rules required that at the end of 36 months of continuous oxygen use* (beginning January 1, 2006) ownership of the equipment would transfer to you, the Medicare beneficiary.

The new law repeals the beneficiary ownership provision and replaces it with a 36-month rental cap after which your home equipment supplier will own the equipment. It also requires the home equipment supplier that furnished your oxygen equipment during the 36-month rental period to continue to furnish it after that time during any period of medical need throughout the reasonable useful lifetime of the equipment (5 years for oxygen equipment).

The useful life is determined starting on the date it is delivered to you, not the age of the equipment. So, the useful life of equipment may end at any point during or after the 36-month rental period depending on when you first received it.

Furnishing Oxygen after the Rental Cap

Once the 36-month rental period ends, you can have multiple periods of medical need that are separated by periods when interruptions in use of the equipment occur, such as admission to the hospital. If a break in medical need occurs, the supplier has to resume furnishing the equipment to you following the break and the resumption of your medical need.

Another advantage for you under the new law is if you relocate some time after the end of the 36-month period but before the end of the useful life of the equipment, your home equipment supplier has to make arrangements for you to continue to receive the equipment at your new place of residence. Your supplier cannot transfer this responsibility to another supplier.

You should be aware of one important issue though. If the useful life of your equipment ends during a break in medical need, the supplier is not obligated to continue furnishing the equipment once your medical need starts again. But, if this situation occurs, you can order new equipment whereby a new 36-month rental period starts all over and a new useful lifetime period begins. So, you will not be without oxygen if you need it.

But, keep in mind, this requirement does not apply if you move to another area during the 36-month period. In those cases, you would have to find a new home equipment supplier in your new location.

Safeguards Still Exist

The Medicare program has put certain safeguards in place to protect you against the possibility that your home equipment supplier might try and replace your equipment in order to maximize Medicare payment by moving from one payment class or type of equipment to another.

Unless one of the exceptions listed below applies, your supplier cannot replace your equipment during the 36-month rental period or after that period of time unless the useful life of the equipment expires.

• The equipment is lost, stolen, or irreparably damaged; or it is being repaired or no longer functions and the supplier gives you replacement equipment with the same, or equivalent, make and model as the initially furnished item;
• Your physician orders different equipment because there is a change in your medical condition such that the equipment initially furnished is no longer medically necessary;
• You decide to get a newer piece of equipment or upgraded item and you sign an Advanced Beneficiary Notice (ABN); or,
• The Medicare program or the carrier determines that a change in equipment is warranted. (A “carrier” is a local insurance company that is under contract to Medicare to process medical claims and pay bills and to enforce the Medicare laws.)

Payment for Oxygen Contents after the Rental Cap

Medicare will continue to pay for the oxygen contents for use with supplier-owned liquid or gaseous oxygen equipment (stationary and portable) after the 36-month rental cap ends. This requirement is necessary because liquid and gaseous oxygen systems (stationary and portable) require on-going delivery of oxygen contents in tanks or cylinders so you can receive the oxygen you need.

If you have one of these types of equipment, the same supplier that furnished your equipment during the 36-month rental cap has to continue to furnish the equipment and oxygen contents until the useful life of such equipment ends.

If you relocate to another area after the 36-month rental cap ends but before the useful life of the liquid or gaseous equipment (stationary and portable) ends, your supplier also has to make arrangements for you to continue to receive the oxygen equipment and oxygen contents at your new place of residence.

Maintenance and Servicing after the Rental Cap

After the 36-month rental cap ends, Medicare has made an initial determination to pay for in-home visits (permanent or temporary residence) for periodic inspection and general maintenance and servicing of supplier-owned oxygen concentrators and transfilling equipment following each 6-month period of continuous use (the first 6 months don’t count). Medicare wants to hear from home equipment suppliers as to whether this payment should continue after calendar year 2009.

Because oxygen equipment is generally reliable and requires minimal maintenance and servicing during the first 5 years of use, there are certain items and activities related to supplier-owned equipment that Medicare will not pay for. These include non-routine maintenance and servicing (including repair), routine maintenance and servicing of liquid or gaseous oxygen equipment (stationary or portable), and replacement parts.

Medicare believes the supplier should assume certain responsibilities for its own equipment to make sure that it remains in working order as it did during the 36-month rental cap. The supplier should ensure the tanks and cylinders are working correctly at the time the supplier furnishes the oxygen contents, and, if parts have to be replaced, the supplier should provide them from their own inventory.

If You Have Concerns or Questions

If you are unsure of your rights or have questions about the new Medicare policy, you should call the Medicare hotline at 1-800-MEDICARE (1-800-633-4227). TTY users call 1-877-486-2048. If you have questions about your oxygen equipment, you should check with your physician or local home equipment supplier.

What does continuous use mean?

• Continuous use begins the first month that you need oxygen and lasts until your medical need for that piece of equipment ends.
• You can have a temporary interruption in using the equipment up to 60 consecutive days, plus the days remaining in the rental month.
• A permanent or temporary move does not constitute an interruption in the period of continuous use.
• If your oxygen equipment changes from one type of modality to another (liquid to gas) or you get additional equipment, a new period of continuous use begins when you start using the new equipment.
• After the new 36-month rental period ends, a new period of continuous use will not begin until the reasonable useful lifetime of the equipment ends.