Through its listserv, CMS has released the following guidance on
oxygen and oxygen equipment, including billing for contents and
replacement equipment as well as documentation guidelines.

The agency said an MLN Matters article will be forthcoming that
incorporates the information included in its message, which
follows:

Medicare Billing Requirements and
Policies for Replacement of Oxygen Equipment and Oxygen
Contents

This message is for suppliers and home health
agencies that furnish oxygen and oxygen equipment to Medicare
beneficiaries

Suppliers of oxygen and oxygen equipment need to be aware of the
procedures for submitting claims for oxygen and oxygen equipment
following the enactment of the Medicare Improvements for Patients
and Providers Act of 2008 (MIPPA) on July 15, 2008.

Section 144(b) of MIPPA took effect on January 1, 2009, and
repeals the requirement for you to transfer title to oxygen
equipment to the beneficiary after the 36 month payment cap
mandated by the Deficit Reduction Act of 2005. Section 144(b) of
MIPPA also establishes new payment rules and supplier
responsibilities following the 36 month payment period. See MLN
Matters number SE0840 for additional information about these new
rules. This listserv message provides specific instructions for
submitting claims for oxygen contents and replacement of oxygen
equipment.

REPLACEMENT OF OXYGEN EQUIPMENT

New HCPCS Modifier for Replacement of DME
Effective January 1, 2009, the following modifiers was added to the
Healthcare Common Procedure Coding System (HCPCS):

RA – Replacement of a DME item;

This modifier is to be used on claims for replacement of oxygen
equipment with dates of service on or after January 1, 2009. HCPCS
modifier RP, which was discontinued effective December 31 2008,
remains in effect for claims with dates of service prior to January
1, 2009.

  • If oxygen equipment is replaced because the equipment has been
    in continuous use by the patient for the equipment’s
    reasonable useful lifetime or is lost, stolen, or irreparably
    damaged, the patient may elect to obtain a new piece of equipment.
    Irreparable damage refers to a specific incident of damage to
    equipment such as equipment falling down a flight of stairs as
    opposed to equipment that is worn out over time. In these
    situations, a new 36-month rental period and new reasonable useful
    lifetime is started on the date that the new, replacement item is
    furnished. Claims for the replacement of oxygen equipment for the
    first month of use only are billed using the HCPCS code for the new
    equipment and either the RA or RP HCPCS modifier depending on the
    date that the equipment is furnished.
  • You must include on the claim for the first month of use a
    narrative explanation of the reason why the equipment was replaced
    and supporting documentation must be maintained in your files. For
    example, if equipment is stolen, you should keep a copy of the
    police report in your files. For lost or irreparably damaged
    equipment, you should maintain any documentation that supports the
    narrative account of the incident. For reasonable useful lifetime
    replacements, the narrative explanation should include the date
    that the beneficiary received the equipment being replaced.
  • When submitting claims electronically for replacement of oxygen
    equipment, you may use, for the narrative explanation, loop 2400
    (line note), segment NTE02 (NTE01=ADD) of the ASC X12, version
    4010A1 professional electronic claim format. If you are billing
    using the Form CMS-1500 paper claim, you may report this
    information in item 19 of the claim form.
  • If you are a home health agency submitting claims
    electronically for replacement of oxygen equipment, you may use,
    for the narrative explanation, loop 2300, segment NTE (billing
    note) of the ASC X12, version 4010A1 institutional electronic claim
    format. If you are a home health agency billing using the UB-04
    paper claim, you may report this information in Form Locator 80
    (Remarks).
  • A new certificate of medical necessity (CMN) is required in
    situations where oxygen equipment is replaced because the equipment
    has been in continuous use by the patient for the equipment’s
    reasonable useful lifetime or is lost, stolen, or irreparably
    damaged. New testing, however, is not required unless it is
    necessary in order to meet existing medical review guidelines for
    oxygen and oxygen equipment. You should continue to follow the
    existing guidelines requiring recertification CMNs for all
    situations in which oxygen equipment is being replaced. The most
    recent qualifying value and testing date should be entered on the
    CMN.
  • As is the case for all DME items, you must maintain
    proof-of-delivery documentation in your files for replacement
    oxygen equipment. In addition, for equipment that is being replaced
    because it has been in continuous use by the beneficiary for the
    reasonable useful lifetime and the beneficiary has elected to
    obtain new equipment, you must also have proof-of-delivery
    documentation in your files for the item being replaced that
    documents that the oxygen equipment has been in use for at least 5
    years.

Change in Oxygen Equipment during the Reasonable Useful
Lifetime Period

  • The reasonable useful lifetime for stationary or portable
    oxygen equipment begins when the oxygen equipment is first
    delivered to the beneficiary and continues until the point at which
    the stationary or portable oxygen equipment has been used by the
    beneficiary on a continuous basis for 5 years. Computation of the
    reasonable useful lifetime is not based on the age of the
    equipment.
  • If there is a change in oxygen equipment modalities (e.g., from
    a concentrator to a stationary liquid oxygen system) prior to the
    end of the reasonable useful lifetime period, this does not result
    in the start of a new reasonable useful lifetime period or a new 36
    month payment period. In addition, if you have to replace oxygen
    equipment that is not functioning properly prior to the end of the
    reasonable useful lifetime period, this does not result in the
    start of a new reasonable useful lifetime period or a new 36 month
    payment period. Finally, if the beneficiary switches to a new
    supplier and new equipment prior to the end of the reasonable
    useful lifetime period, this does not result in the start of a new
    reasonable useful lifetime period or a new 36 month payment
    period.
  • A beneficiary may elect to obtain new oxygen equipment at the
    end of the 5 year reasonable useful lifetime period in these
    situations.

Clarification of Policy Regarding Continuous Use of Oxygen
and Oxygen Equipment

  • The instructions pertaining to payments for capped rental items
    during a period of continuous use now apply to the monthly payment
    amounts for oxygen and oxygen equipment and the portable oxygen
    equipment add-on payments.
  • A period of continuous use allows for temporary interruptions
    in the use of the equipment. For breaks in need (beneficiary no
    longer needs or uses the equipment) of less than 60 days plus the
    days remaining in the last paid rental month, the period of
    continuous use does not start over and so the count of continuous
    months picks up where it left off before the break. For example, if
    the last paid rental month is month #31 and there is a 50 day break
    in need, the next paid rental month would be month #32.
  • If, however, there is a break in need more than 60 days plus
    the days remaining in the last paid rental month, and the need for
    the equipment resumes at a later date, a new period of continuous
    use, a new 36-month payment period, and a new reasonable useful
    lifetime period would begin provided that you have submitted the
    following:
  • New medical necessity documentation (i.e., a new CMN and
    retesting) for oxygen and oxygen equipment and/or portable oxygen
    equipment;

AND

  • A narrative explanation describing the reason for the
    interruption which shows that medical necessity in the prior
    episode ended. When submitting claims electronically for
    replacement of oxygen equipment, you may use, for the narrative
    explanation, loop 2400 (line note), segment NTE02 (NTE01=ADD) of
    the ASC X12, version 4010A1 professional electronic format. If you
    are billing using the Form CMS-1500 paper claim, you may report
    this information in item 19 of the claim form. If you are a home
    health agency submitting claims electronically for replacement of
    oxygen equipment, you may use, for the narrative explanation, loop
    2300, segment NTE (billing note) of the ASC X12, version 4010A1
    institutional electronic claim format. If you are a home health
    agency and are billing using the UB-04 paper claim, you may report
    this information in Form Locator 80 (Remarks). Suppliers and home
    health agencies are not to use modifier RA on these claims.

PLEASE NOTE: If medical necessity for the equipment
continues during a break in billing/Part B payment (e.g., the
beneficiary is hospitalized for 70 days but continues to use oxygen
equipment during the hospital stay), this DOES NOT constitute a
break in need, and therefore, a new period of continuous use
DOES NOT begin. In these situations, the count of continuous months
picks up where it left off before the break.

OXYGEN CONTENTS

Payment for Oxygen Contents (General Policy)

  • If you furnished liquid or gaseous oxygen equipment during the
    36-month rental period, you are responsible for furnishing the
    oxygen contents used with the oxygen equipment for any period of
    medical need following the 36-month rental cap for the remainder of
    the reasonable useful lifetime of the equipment.
  • In these situations, you can bill for and receive a monthly
    payment for furnishing oxygen contents (see chart below).

Payment for Oxygen Contents (When Monthly Payments May
Begin)

  • Payment for both oxygen contents used with stationary oxygen
    equipment and oxygen contents used with portable oxygen equipment
    is included in the 36 monthly payments for oxygen and oxygen
    equipment (stationary oxygen equipment payment) made for codes
    E0424, E0439, E1390, or E1391. Beginning with dates of service on
    or after the end date of service for the month representing the
    36th payment for code E0424, E0439, E1390, or E1391, you may bill
    on a monthly basis for furnishing oxygen contents (stationary
    and/or portable), but only in accordance with the following
    chart:
Equipment Furnished in Month
36
Monthly Contents Payment after Stationary
Cap
Oxygen Concentrator (E1390, E1391, or E1392) None
Portable Gaseous Transfilling Equipment
(K0738)
None
Portable Liquid Transfilling Equipment
(E1399)
None
Stationary Gaseous Oxygen System (E0424) Stationary Gaseous Contents (E0441)
Stationary Liquid Oxygen System (E0439) Stationary Liquid Contents (E0442)
Portable Gaseous Oxygen System (E0431) Portable Gaseous Contents (E0443)
Portable Liquid Oxygen System (E0434) Portable Liquid Contents (E0444)
  • You may not bill for stationary oxygen contents if the
    beneficiary uses a stationary concentrator and you may not bill for
    portable oxygen contents if the beneficiary uses a portable
    concentrator or transfilling equipment.

PLEASE NOTE: The descriptors for HCPCS codes E0441
through E0444 reflect older policies and regulations and need to be
revised to reflect current policies and regulations. For now, each
of these four codes represents monthly delivery of either
stationary or portable oxygen contents. The language in parentheses
in the descriptors for each of these codes should be
disregarded.

  • If the beneficiary began using portable gaseous or liquid
    oxygen equipment (E0431 or E0434) more than one month after they
    began using stationary oxygen equipment, monthly payments for
    portable gaseous or liquid oxygen contents (E0443 or E0444) may
    begin following the stationary oxygen equipment payment cap
    AND prior to the end of the portable equipment payment cap
    (code E0431 or E0434). As long as the beneficiary is using covered
    gaseous or liquid portable oxygen equipment, payments for portable
    oxygen contents may begin following the stationary oxygen equipment
    payment cap. This will result in a period during which monthly
    payments for E0431 and E0443, in the case of a beneficiary using
    portable gaseous oxygen equipment, or E0434 and E0444, in the case
    of a beneficiary using portable liquid oxygen equipment, overlap.
    In these situations, after the 36-month portable oxygen equipment
    payment cap for E0431 or E0434 is reached, monthly payments for
    portable oxygen contents (E0443 or E0444) would continue.
  • If the beneficiary began using portable gaseous or liquid
    oxygen equipment (E0431 or E0434) following the 36-month stationary
    oxygen equipment payment period, payments may be made for both the
    portable equipment (E0431 or E0434) and portable contents (E0443 or
    E0444).
  • In all cases, separate payment for oxygen contents (stationary
    or portable) would end in the event that a beneficiary receives new
    stationary oxygen equipment and a new 36-month stationary oxygen
    equipment payment period begins (i.e., in situations where
    stationary oxygen equipment is replaced because the equipment has
    been in continuous use by the patient for the equipment’s
    reasonable useful lifetime or is lost, stolen, or irreparably
    damaged). Again, the monthly payment for stationary oxygen
    equipment includes payment for both stationary and
    portable oxygen contents. Therefore, under no circumstances can you
    receive both the monthly stationary oxygen equipment payment and
    payment for either stationary or portable oxygen
    contents.

Proof-of-Delivery Requirements for Oxygen Contents

  • Following the stationary oxygen equipment payment cap, you may
    bill for oxygen contents (stationary and/or portable in accordance
    with the chart above) on the anniversary date of the oxygen
    equipment billing.

For example, if the 36th month of continuous use of the
stationary oxygen equipment begins on March 11th and ends on April
10th, you may begin billing for monthly oxygen contents that the
beneficiary will use after the cap on April 11th.

  • For subsequent months, you do not need to deliver the oxygen
    contents every month in order to continue billing for the contents
    on a monthly basis. A maximum of 3 months of oxygen contents can be
    delivered at one time. In these situations, the delivery date of
    the oxygen contents does not have to be the DOS (anniversary date)
    on the claim. However, in order to bill for contents for a specific
    month, you must have previously delivered quantities of oxygen that
    are sufficient to last for one month following the date of service
    on the claim. You are required to have proof-of-delivery for each
    actual delivery of oxygen, but as discussed above, this may be less
    often than monthly.

For example, if you deliver 30 oxygen tanks on April 11th and
the beneficiary only uses 15 tanks from April 11th through May 10th
and 15 tanks from May 11th through June 10th, you may bill for
contents on April 11th and again on May 11th for contents delivered
on April 11th that were used for two months.

A Change Request (CR) and a MLN Matters Article will be
forthcoming that will incorporate the information contained in this
listserv message.