Home oxygen therapy (HOC) is a medical treatment that provides supplemental oxygen to patients in their residence to treat chronic low blood oxygen levels (hypoxemia). This therapy is classified as Durable Medical Equipment (DME) by insurers. Securing coverage requires meeting two distinct thresholds: a physician’s prescription and strict medical criteria established by the payer, most notably Medicare, whose standards often govern private insurance plans. Like all medications, home oxygen use must be carefully prescribed and documented to ensure safety and effectiveness.
Establishing Medical Necessity
To establish the medical necessity for home oxygen, a patient must undergo objective testing to document chronic hypoxemia while breathing room air. The most common standard requires either an Arterial Blood Gas (ABG) test showing a partial pressure of oxygen (PaO2) at or below 55 mm Hg or a pulse oximetry reading showing an arterial oxygen saturation (SpO2) at or below 88 percent. These measurements must be taken while the patient is in a chronic stable state, not during an acute illness or emergency room visit. If the patient is being discharged from a hospital, the qualifying test must be performed within two days prior to discharge.
For patients who do not meet the qualification criteria at rest, there are separate pathways for qualifying for oxygen use during specific activities. Supplemental oxygen may be covered for use during exercise if a patient’s SpO2 drops to 88 percent or less during exertion, and oxygen use demonstrably improves the saturation. Similarly, nocturnal oxygen is covered if an overnight oximetry study documents an SpO2 at or below 88 percent for five cumulative minutes or more during sleep.
A different category of qualification exists for patients with an SpO2 of 89 percent at rest, provided they also have a qualifying secondary diagnosis, such as cor pulmonale, congestive heart failure, or erythrocythemia with a hematocrit greater than 56 percent. These objective test results must be obtained and evaluated by the treating physician or a qualified laboratory service, not by the home oxygen supplier, to avoid conflict of interest. The medical record must also contain documentation confirming that alternative treatments have been considered and deemed clinically ineffective.
Navigating Insurance Coverage
Insurance coverage for home oxygen therapy is heavily influenced by the policies of the Centers for Medicare & Medicaid Services (CMS), which set the standard for most payers. Coverage begins only after medical necessity criteria are met and the required administrative documentation is submitted. A Certificate of Medical Necessity (CMN) or a similar prior authorization (PA) request must be completed by the treating physician and submitted to the insurer, often by the equipment supplier.
The CMN must be supported by the patient’s medical records, including a face-to-face examination by the treating practitioner that occurred within 30 days prior to the start of therapy. Using oxygen in the hospital does not automatically qualify a patient for home use; qualification is determined by the results of specific outpatient or per-discharge testing. Timely submission of all documentation is paramount, as failure to meet payer-specific deadlines can result in denial of coverage or a delay in receiving the equipment.
Under Medicare rules, oxygen equipment is always rented in a five-year cycle, and the patient never takes ownership. Medicare pays the supplier a monthly rental fee for the first 36 months, covering the equipment, supplies, and maintenance. After the 36-month cap is reached, the supplier must continue to provide the equipment and necessary contents, such as oxygen refills, for the remainder of the five-year period. At the end of the five years, a new 36-month rental period may begin if the patient still meets the medical necessity criteria for continued use.
The Role of the Prescribing Physician and Supplier
Securing home oxygen coverage starts with the prescribing physician, who must document the patient’s condition and evaluate the qualifying test results. The physician is responsible for issuing a Detailed Written Order (DWO), or prescription, detailing the specifics of the therapy. This order must precisely state the diagnosis, the required oxygen flow rate in liters per minute (LPM), and the duration of use (e.g., continuous, nocturnal, or with exercise).
A prescription for “Oxygen as needed” or “PRN” is not acceptable for coverage, as it does not provide a basis for determining the amount of oxygen that is reasonable and necessary. The DWO must also specify the type of delivery system (e.g., nasal cannula or mask) and the equipment type (e.g., stationary concentrator, portable concentrator, or compressed gas tanks). This detailed order ensures the patient receives the correct dose.
Once the physician has completed the necessary documentation, the patient must select a Durable Medical Equipment (DME) supplier. The supplier is responsible for verifying enrollment and accreditation with the patient’s insurance plan, which is required for billing. The supplier then uses the physician’s DWO and supporting medical records to prepare and submit the final claim and the Certificate of Medical Necessity to the insurer.
Maintaining Qualification
Maintaining continuous coverage requires periodic re-evaluation to confirm the ongoing need. Insurers, including Medicare, require the patient to be seen and evaluated by the treating practitioner at specific intervals. A recertification visit is typically required within 90 days of the initial certification for certain patient groups, and often again at the 12-month mark.
The treating physician must document the continued medical need for oxygen therapy in the patient’s medical record during these follow-up appointments. While retesting is not always formally required after the initial phase, the physician has the discretion to order new ABG or oximetry studies if the patient’s condition changes or if there is a question about continued necessity. Failure to attend these mandated follow-up appointments or provide updated medical documentation can lead to the discontinuation of coverage and equipment delivery.