A new 36-month rental period can begin only in the following situations:

• After the five year reasonable useful lifetime (“RUL”) of the oxygen equipment has expired, if the beneficiary elects to obtain new oxygen equipment;
• Previous supplier exits the Medicare oxygen business and abandons the patient;
• Previous supplier files bankruptcy;
• Specific incident of damage beyond repair (e.g., dropped and broken, fire, flood, etc.) or the item is stolen or lost; and
• During 36-month rental payment period…if there is a break-in-need for at least 60 days plus the days remaining in the month of discontinuation and new medical necessity is established.

This article focuses on the first and fifth bullets.

End of the RUL
The RUL for oxygen equipment is five years. At any time after the end of the RUL, the beneficiary may elect to receive new equipment, thus beginning a new 36 month rental period. The five year period begins on the initial date of service and runs for five years from that date. It is not based on the actual age of the equipment. The five year period does not re-start if there has been a change in oxygen modality, change out of equipment, or change in supplier.

When the RUL of a beneficiary’s portable oxygen equipment differs from the RUL of the beneficiary’s stationary oxygen equipment, the RUL of the stationary oxygen equipment shall govern for both types of oxygen equipment, stationary and portable.

If the RUL end date of the portable oxygen equipment is before the RUL end date of the stationary oxygen equipment, the RUL end date of the portable oxygen equipment is extended to coincide with the RUL end date of the stationary oxygen equipment. If the RUL end date of the portable oxygen equipment is after the RUL end date of the stationary oxygen equipment, the end date of the RUL of the portable oxygen equipment is shortened to coincide with the RUL end date of the stationary oxygen equipment.

When the end date of the RUL of the stationary oxygen equipment occurs, the beneficiary may elect to obtain replacement of both the stationary and the portable oxygen equipment. If the beneficiary elects to obtain replacement of the stationary and the portable oxygen equipment, both types of oxygen equipment must be replaced at the same time, and a new 36-month rental period and new RUL is started for both the replacement stationary oxygen equipment and the replacement portable oxygen equipment.

A beneficiary who resides in a DMEPOS competitive bidding area (“CBA”) may obtain replacement of both the stationary and portable oxygen systems only from a contract supplier having a competitive bidding contract for the CBA in which the beneficiary permanently resides.

If the beneficiary elects not to receive new equipment after the end of the five year RUL and if the supplier retains title to the equipment, all elements of the payment policy for months 37-60 remain in effect. There is no separate payment for accessories or repairs. If the beneficiary was using gaseous or liquid oxygen equipment during the 36th rental month, payment can continue to be made for oxygen contents. If the beneficiary elects not to receive new equipment after the end of the five year RUL and if the supplier transfers title of the equipment to the beneficiary, accessories, maintenance, and repairs are statutorily non-covered by Medicare. Contents are separately payable for beneficiary-owned gaseous or liquid systems.

Break in Medical Need
If the beneficiary enters a hospital or SNF, or joins a Medicare HMO, and continues to need/use oxygen, then when the beneficiary returns home or rejoins Traditional Medicare, payment resumes where it left off. If need/use of oxygen ends for less than 60 days plus the remainder of the rental month of discontinuation and then resumes, payment resumes where it left off. During the 36-month rental period, if need/use of oxygen ends for more than 60 days plus the remainder of the rental month of discontinuation, and new medical necessity is established, a new 36 month rental period will begin.

The blood gas study must be the most recent study obtained within 30 days prior to the Initial Date. The beneficiary must be seen and evaluated by the treating physician within 30 days prior to the date of Initial Certification.

If there is an interruption in medical necessity of greater than 60 days plus the days remaining in the last paid rental month, once the need resumes the supplier will collect supporting documentation (made available upon request) of the new medical need including, but not limited to:

• New prescription (detailed written order, WOPD if required)
• New Initial CMN (with new qualifying oxygen test results performed within 30 days of new initial date)
• Documentation supporting new medical need
• Documentation explaining interruption of need
• Documentation supporting length of interruption (e.g., pick up date, new delivery date)

The claim for the first month of the new rentals meeting the above documentation should include:

• New Initial CMN
• Narrative statement, “Break in medical need greater than 60 days.”

During months 37-60, if need/use of oxygen ends for more than 60 days plus the remainder of the rental month of discontinuation and new medical necessity is established, a new rental period does not begin. The supplier that provided the oxygen equipment during the 36th rental month must provide all necessary items and services for the duration of the RUL.

CMN Requirements
Beginning with March 1, 2020 dates of service and for the duration of the COVID PHE, there is no requirement to submit CMNs for oxygen equipment. Add the CR modifier to the HCPCS code(s) billed and “COVID-19” in the NTE 2400 (line note) or NTE 2300 (claim note) segments of the ANSI X12 for electronic claims or in item 19 for the CMS-1500 claim form. CMS is discontinuing all CMNs and DME Information Forms (DIFs) effective January 1, 2023.

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers, and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or [email protected].

Lisa K. Smith, JD, is an attorney with the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. She represents pharmacies, infusion companies, HME companies, manufacturers, and other health care providers throughout the United States. Ms. Smith is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6370 or [email protected].

AAHOMECARE’S EDUCATIONAL WEBINAR

Offering Value-Added Services While Avoiding Prohibited Inducements

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato

Tuesday, August 16, 2022 

1:30-2:30 p.m. CENTRAL TIME
The federal Stark physician self-referral statute (“Stark”), the federal anti-kickback statute (“AKS”), and the federal beneficiary inducement statute (“inducement statute”) came into existence when health care was primarily operating under a fee-for-service (“FFS”) model that did not encourage the provision of value-added services to patients, collaboration among providers, nor tie reimbursement to achieving certain metrics. The FFS model can be costly and inefficient. As a result, third party payors (including Medicare) are pushing health care delivery into a value-add/collaborative care/value-based model. To facilitate the shift of health care towards this new approach, CMS and the OIG modified Stark, the AKS, and the inducement statute with the goal of ensuring that these statutes do not unnecessarily impede the provision of value-added services, nor the transition to collaborative/value-based care. This program will discuss how a DME supplier can provide value-added services to patients with the twin goals of (i) providing preventative health care and (ii) lowering socio-economic barriers to receiving health care. The program will present examples of value-added services that are legally acceptable, and those that should be avoided. This program will further discuss proper … and improper … collaborative arrangements between a DME supplier on the one hand, and physicians, hospitals and other providers on the other hand.

Register for Offering Value-Added Services While Avoiding Prohibited Inducements on Tuesday, August 16, 2022, 1:30-2:30 p.m. CT, with Jeffrey S. Baird, Esq. of  Brown & Fortunato.

Members:  $99
Non-Members:  $129