An oxygen concentrator is a medical device designed to filter and purify the surrounding air to provide a higher concentration of oxygen for the user. Ambient air contains approximately 21% oxygen, but the concentrator removes nitrogen and other gases to deliver an oxygen-enriched flow, often reaching 90% to 95% purity. This technology is a form of oxygen therapy prescribed for individuals who do not get enough oxygen from breathing room air alone. Medicare does cover oxygen concentrators, but only when specific medical necessity criteria are met.
Which Medicare Part Covers Oxygen Concentrators?
Oxygen concentrators fall under Durable Medical Equipment (DME), defined as equipment that is medically necessary, durable, and used in the home. Coverage is provided exclusively through Medicare Part B, which covers outpatient medical services and supplies. To qualify, the equipment must be prescribed by a doctor and obtained from a supplier that is enrolled in Medicare. Concentrators, along with related supplies such as tubing and cannulas, are included under this benefit when intended for use within the patient’s home.
Establishing Eligibility Through Medical Necessity
Coverage is contingent upon a physician certifying that the oxygen therapy is medically reasonable and necessary for treating a severe medical condition. The patient must have a diagnosis of a severe lung disease, such as Chronic Obstructive Pulmonary Disease (COPD) or pulmonary fibrosis, or a related hypoxia-inducing condition. The physician must sign a Certificate of Medical Necessity (CMN) confirming the need for the equipment.
Diagnostic Requirements
Diagnostic testing must document the severity of low oxygen levels, established through an arterial blood gas (ABG) test or a pulse oximetry reading. To qualify, test results must show a partial pressure of oxygen (PaO₂) of 55 millimeters of mercury (mmHg) or less, or an oxygen saturation level (SpO₂) of 88% or less. This qualifying level must be demonstrated while the patient is at rest on room air, or in some cases, during exercise or sleep. The physician must also document that alternative therapeutic measures, such as medications or other treatments, have been tried and failed, or are otherwise not appropriate.
Understanding Beneficiary Out-of-Pocket Costs
The Medicare beneficiary is responsible for certain out-of-pocket expenses under the Part B cost-sharing model. The patient must first satisfy the annual Part B deductible. After the deductible is met, Medicare pays 80% of the approved cost for the oxygen concentrator rental.
The patient is responsible for the remaining 20% coinsurance of the Medicare-approved amount, which is paid to the Durable Medical Equipment supplier. This 20% coinsurance applies to the monthly rental fee. Many beneficiaries choose to enroll in supplemental coverage, such as a Medigap policy or a Medicare Advantage Plan, which may cover all or part of this 20% coinsurance.
The Standard Rental and Maintenance Process
Medicare covers oxygen concentrators through a mandatory rental agreement, rather than an outright purchase. The standard rental period for oxygen equipment is 36 continuous months. During this 36-month period, the monthly rental payment covers the equipment, necessary supplies like tubing, and all maintenance and repairs.
After the 36th month, Medicare stops making rental payments to the supplier, but the supplier is required to continue providing the equipment and all necessary accessories for an additional 24 months. This means the patient keeps and uses the equipment for a total of five years (60 months), provided the medical necessity for oxygen still exists. Routine maintenance and servicing during this final 24-month period are still covered, but the patient may be responsible for a 20% coinsurance for these services. After the five-year period concludes, the beneficiary may become eligible for a new piece of equipment, which initiates a new 36-month rental cycle.