An oxygen concentrator is classified as durable medical equipment (DME), a category of devices prescribed by a physician for use in the home. Since this equipment is often expensive, the question of who owns it and who is responsible for its long-term maintenance becomes a financial concern for patients. For most individuals, the process is governed by Medicare Part B rules, which structure the payment for the concentrator as a long-term rental agreement rather than an outright purchase.
Understanding the 36-Month Rental Rule
The payment structure for an oxygen concentrator under Medicare Part B is based on a defined 36-month rental period. During this time, Medicare pays a monthly rental fee to the supplier, covering the cost of the equipment, necessary supplies, and routine maintenance. The patient is typically responsible for a 20% coinsurance of the Medicare-approved amount for each of these 36 monthly payments after meeting the annual Part B deductible.
The 36-month period begins on the initial date the oxygen concentrator is delivered to the patient. Payments from Medicare to the supplier stop completely after the 36th month, even if the patient continues to need the oxygen therapy. The supplier, however, must continue to provide the equipment and certain services beyond this point, as the full five-year service obligation has not yet been met.
Ownership and Service Obligations After Five Years
The question of ownership is complex because the concentrator is always treated as part of a five-year cycle of use, which is defined as the equipment’s reasonable useful lifetime (RUL). Unlike many other types of DME, the patient does not automatically gain ownership of the oxygen concentrator at the 36-month payment cap. The supplier maintains ownership of the equipment for the full five-year (60-month) period.
Even though Medicare payments stop after 36 months, the original supplier has an obligation to continue furnishing the oxygen equipment and necessary related supplies for the remainder of the equipment’s five-year RUL. This means that from month 37 through month 60, the patient continues to use the equipment without paying additional rental fees, and the supplier cannot charge the patient for the concentrator itself. The supplier must also continue to provide maintenance, necessary repairs, and replacement supplies like tubing and filters throughout the entire 60-month period, as long as the patient still needs the therapy.
Once the five-year RUL period ends, which is 60 continuous months from the delivery date, the supplier’s mandatory obligation to provide the equipment and services ceases.
Ongoing Care and Replacement After the Service Period
When the 60-month reasonable useful lifetime of the oxygen concentrator concludes, the patient has the option to receive new equipment, which begins a new 36-month payment and 5-year service cycle. If the medical necessity for oxygen continues past this five-year mark, the patient may elect to obtain replacement equipment from any supplier. This starts a completely new rental period, and Medicare will again begin making monthly rental payments to the new supplier.
If a patient’s concentrator needs replacement before the five-year RUL has expired, Medicare will only cover a new machine under specific, limited circumstances. Early replacement is covered if the equipment is lost, stolen, or damaged beyond repair, such as in a fire or flood. In a scenario where the equipment is simply malfunctioning, Medicare covers repairs, but if the cost of repairs exceeds 60% of the cost of a new item, replacement may be considered.
After the 60-month period, if the patient chooses not to receive new equipment, any future maintenance, repairs, and accessories for the existing concentrator become the patient’s financial responsibility. While the Medicare model is the standard, patients with private insurance should check their specific policy, as these plans may have different rules regarding rental periods and replacement criteria.