Portable Oxygen Concentrators (POCs) are medical devices that provide supplemental oxygen therapy to individuals with respiratory conditions while allowing for mobility. Whether Medicaid covers these units does not have a single answer because Medicaid is a joint federal and state program. While federal guidelines establish a baseline, each state manages its own program, resulting in substantial differences in coverage rules that impact a beneficiary’s ability to obtain a POC.
Portable Oxygen Concentrators as Durable Medical Equipment
Portable oxygen concentrators are generally classified by Medicaid as Durable Medical Equipment (DME). DME is defined as equipment that serves a medical purpose, can withstand repeated use, is appropriate for use in the home, and is not generally useful to a person without a medical illness or injury. This classification determines eligibility for coverage.
For any DME, including a POC, it must be deemed “medically necessary” and formally prescribed by a physician to be covered. This means the patient’s underlying condition, such as severe asthma or Chronic Obstructive Pulmonary Disease (COPD), must necessitate the equipment for treatment or improved functioning. While federal law mandates certain medical services, the specific coverage criteria for DME are often left to the discretion of individual state Medicaid programs.
The Impact of State-Specific Medicaid Rules on Coverage
Because each state administers its own Medicaid program, the rules governing POC coverage vary widely. Many state plans are modeled after Medicare’s oxygen coverage but introduce specific limitations on the type of equipment or the circumstances of use. Some states may only cover a stationary oxygen system and require explicit documentation to justify the expense and convenience of a portable unit.
A common restriction relates to the patient’s activity level and the purpose of portability. Some state plans limit approval of portable oxygen to situations where the patient needs to travel only for medically necessary appointments, such as dialysis or chemotherapy. For beneficiaries under the age of 21, some states also allow portable oxygen for travel to and from school. Other state policies require a demonstrable need for a separate portable system to maintain mobility within the home or for out-of-home activities.
Coverage rules may also differ if the beneficiary is enrolled in a Medicaid Managed Care Organization (MCO) rather than the traditional fee-for-service program. MCOs are private insurance companies contracted by the state to provide Medicaid benefits. While MCOs must adhere to the state’s minimum coverage standards, they may have unique procedural requirements or specific provider networks for DME.
Required Medical Documentation and Prior Authorization
Securing coverage for a portable oxygen concentrator requires documentation to establish medical necessity. The process begins with a detailed written order or prescription from the treating physician, which must specify the required oxygen flow rate and frequency of use.
The most specific evidence required is clinical testing demonstrating the severity of hypoxemia, or low blood oxygen levels. This documentation must include results from an arterial blood gas (ABG) measurement or a pulse oximetry reading, taken while the patient is awake at rest, during sleep, or during exercise. Coverage is established for patients who have an arterial oxygen saturation at or below 88%, or an arterial partial pressure of oxygen (PO2) at or below 55 mm Hg, while breathing room air.
This clinical evidence is submitted to the state Medicaid agency or the MCO as part of a Prior Authorization (PA) or pre-approval request. Prior Authorization is mandatory for oxygen equipment and ensures the item meets the state’s specific criteria for medical necessity before dispensing. The provider must submit this documentation and receive approval before the patient can receive the POC.
Understanding Rental Agreements and Patient Cost Share
Medicaid coverage for oxygen concentrators is structured as a monthly rental agreement rather than an outright purchase. The monthly payment to the supplier typically includes the device cost, routine maintenance, servicing, and necessary supplies like tubing and cannulas. This rental structure ensures the equipment remains functional and allows for necessary repairs or replacements.
Unlike the strict 36-month cap used by Medicare, oxygen equipment in many state programs may be classified as “equipment requiring frequent and substantial servicing,” and may not have a rental cap. However, some states impose a “capped rental period” after which rental payments cease, and equipment ownership may transfer to the beneficiary. The length of this capped period varies significantly by state.
Many Medicaid beneficiaries are not required to pay out-of-pocket costs for medically necessary DME. However, some states may impose small copayments for services or equipment. Beneficiaries with income slightly above the eligibility threshold may also be subject to a “Share of Cost” or “Spend Down” requirement, where they must incur medical expenses before Medicaid coverage begins.