Home oxygen and oxygen equipment authorization and reimbursement
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Defines Alaska Medicaid requirements for authorization, documentation, dispensing, billing, and reimbursement of home oxygen systems and related equipment for beneficiaries, and addresses stakeholder concerns about prior authorization, CMN/electronic orders, portable systems, batteries, and capped rentals.
Home oxygen systems may be dispensed at hospital or ER discharge without prior service authorization if the prescriber provides either a completed HCS Oxygen CMN or an EMR-generated DME order/prescription, with the supplier submitting the complete authorization request by the next business day.
Allows use of EMR-generated DME orders/prescriptions in lieu of the Oxygen CMN for initial and renewal requests when they contain all required CMN elements.
Authorizes both stationary and portable oxygen codes when a single device functions as both or when two separate systems are dispensed, including for those qualifying only via exercise testing when appropriate.
Reimburses additional portable oxygen concentrator batteries required for medically necessary air travel at a daily rental rate covering travel days plus the day before and after.
Implements the capped rental methodology: 36 months of reimbursement within a 60-month period will be enforced starting January 1, 2021 (applied prospectively to calculations).
Clarifies how the 60-month capped rental period is calculated and applied, including start-date rules for members who initiated oxygen before and after January 1, 2021.
Specifies post-60-month options: beginning a new rental period when new equipment is elected (no new testing required), maintenance/service coverage if supplier retains title, and loss of maintenance/service coverage if title transfers to the individual.
Renewal requirement revised so face-to-face visit within 6 months is required but does not need to list oxygen as the primary reason; the visit must gather and document subjective and objective findings related to the condition.
Clarifies that authorizations issued when a child is under 5 are not cancelled when the child turns 5 and that renewals for those who initially qualified under age 5 do not require new testing.
Coverage Criteria for Home Oxygen
inv-01: Initial and Renewal Criteria
Covered when ALL of the following are met:
Any medical records necessary to support the authorization must be retained by the supplier and submitted only if requested by the State of Alaska or for Group III cases.
Renewal authorization must be submitted prior to expiration of the prior authorization.
inv-02: Portable/Stationary Authorization Logic
Authorize portable and stationary coding according to equipment dispensed:
This applies to individuals who qualify only via exercise testing and to Group III portable-only qualifications.
inv-03: Battery Reimbursement Criteria
Covered when supporting documentation is provided:
Supplier must record make/model on the CMN supplier page to allow correct authorization.
inv-04: Capped Rental Rules
Capped rental reimbursement is applied as follows:
Claims are paid as submitted; out-of-chronological claim submissions may cause earlier dates of service to later deny if the 36-payment limit is exceeded.
inv-05: Rental, renewal, and pediatric exceptions
Coverage and authorization apply as follows for home oxygen systems:
Start-date rules differ for individuals who began oxygen before vs on/after Jan 1, 2021.
Explains how the 36 payments are tracked.
Member choice and title transfer determine maintenance coverage and whether a new rental period starts.
Encounter may be in-person or via telehealth and oxygen need not be the primary reason for the visit.
Protects young children from being denied due to standard testing rules.
For initial dispensing, testing method(s) and results are required to substantiate medical necessity and must be documented either on the Oxygen-specific Certificate of Medical Necessity (CMN) supplier page or in an EMR-generated DME order/prescription that includes all required CMN elements. The CMN requirement for test results applies only to initial qualification for home oxygen systems; prescribers are not required to perform every possible test but must report whichever tests were performed and the corresponding results to support the initial authorization.
After a beneficiary has reached the 60-month capped rental period, coverage depends on whether the member elects new equipment and on title ownership. If the member elects new equipment, a new rental period begins and no new testing is required; standard renewal processes apply. If the member does not elect new equipment and the supplier retains title, maintenance and service remain covered and no new rental period begins. If the member does not elect new equipment and the supplier transfers title to the individual, maintenance and service are not covered and no new rental period begins.
inv-23: DME Medical Necessity Nodes
Clinical expectations that must be met to establish and continue medical necessity:
The encounter must gather subjective and objective information associated with managing the clinical condition for which oxygen is ordered and the findings must be documented in the medical record.
Testing results are required only for initial dispensing and must be recorded on the CMN or EMR order.
inv-24: Renewal visit requirements
Renewal medical necessity must be supported by a recent face-to-face encounter:
Per 7 AAC 120.200(s) and 42 C.F.R. 410.38.
Oxygen need not be the primary reason for the visit.
Coding and Key Values
| E1392 | Portable oxygen concentrator (referenced in LCD as meeting criteria to be billed as both stationary and portable) |
Provider Actions and Operational Requirements
Authorization at discharge allowed with rapid follow-up
When an initial home oxygen system is dispensed at hospital or ER discharge, the supplier may provide the equipment without prior service authorization if the prescriber provides either a completed HCS Oxygen CMN or an EMR-generated DME order/prescription containing the required CMN elements. The DME supplier must submit a complete service authorization request (including the Oxygen CMN supplier page and the prescriber-completed Oxygen CMN or EMR DME order) no later than the next business day. Any additional medical records needed to support the authorization must be kept on file by the supplier and submitted only if requested by the State of Alaska or when Group III criteria require records not identified in the oxygen guidelines.
- Dispensed at discharge may be provided without prior authorization when prescriber provides completed Oxygen CMN OR EMR DME order
- Supplier must submit complete service authorization by next business day including Oxygen CMN supplier page and prescriber-completed CMN or EMR DME order
- Maintain supporting medical records on file; submit only if requested by State of Alaska or for Group III requests
Renewal authorization timing and documentation submission
For renewals, the prescriber must provide either a completed Oxygen CMN or an EMR-generated DME order/prescription that contains all required renewal elements. The DME supplier must submit the service authorization prior to expiration of the previous authorization and include the CMN supplier page plus the prescriber-completed Oxygen CMN or EMR DME order containing all renewal elements.
- Required renewal elements include prescriber name, prescriber Medicaid ID or NPI, prescriber affiliation, member name/DOB/ID, diagnosis codes/descriptions, length of need, date of face-to-face visit within prior 6 months, prescription frequency and liter flow, and prescriber wet or verified electronic signature
- Supplier must submit renewal authorization prior to expiration of prior authorization and include CMN supplier page
Renewal face-to-face requirement and required visit documentation
A face-to-face encounter (in-person or via telehealth) within 6 months prior to the renewal request is required. The visit does not need to have oxygen as the primary reason, but it must be used to gather subjective and objective information related to the condition for which oxygen is ordered, and those findings must be documented in the medical record.
- Face-to-face visit must occur within prior 6 months
- Visit must collect and document subjective and objective findings related to oxygen therapy in the pertinent medical record section
- Date of the face-to-face visit must be included on the renewal CMN or EMR DME order
Portable versus stationary authorization
When a member qualifies only for portable oxygen (for example after exercise testing) or under Group III criteria for portable systems, the Department will authorize both stationary and portable HCPCS codes when two separate systems are dispensed or when a single device can function as both stationary and portable.
- Authorize both stationary and portable codes when two separate systems are dispensed
- Authorize both codes when one device can function as both stationary and portable
Post‑60 month options and operational impacts
After the 60-month capped rental period, if the member elects to receive new equipment a new rental period begins and new testing is not required; follow standard renewal processes. If the member does not elect new equipment and the supplier retains title, maintenance and service coverage continues and a new rental period does not begin. If the supplier transfers title to the member and the member does not elect new equipment, maintenance and service are not covered and a new rental period does not begin.
- If new equipment elected after 60 months → new rental period begins; no new testing required
- If supplier retains title after 60 months → maintenance/service covered; no new rental period
- If supplier transfers title after 60 months → maintenance/service not covered; no new rental period
- Claims may be paid in chronological submission order; out-of-order submissions can affect identification of the 36-of-60 payment cap
Rental, Purchase, and Reimbursement Rules
| Equipment / Scenario | Policy / Payment Rule | Threshold / Timing |
|---|---|---|
| Oxygen equipment rentals (general) | Capped rental methodology adopted and enforced by the Department per CMS methodology; reimbursement limited to 36 monthly rental payments within any 60‑month period. | 36 reimbursements paid within a 60‑month window; enforcement effective for dates of service on/after Jan 1, 2021. |
| Members on oxygen prior to Jan 1, 2021 | Calculation of the 36‑in‑60 starts on Jan 1, 2021 for these individuals. | Start date for 36/60 calculation = Jan 1, 2021. |
| Members whose initial prescription is on/after Jan 1, 2021 | Calculation of the 36‑in‑60 begins with the individual’s initial date of service. | Start date for 36/60 calculation = individual’s initial DOS. |
| Item | Coverage / Reimbursement | Documentation / Billing Note |
|---|---|---|
| Portable oxygen concentrator (POC) batteries required for medically necessary air travel | Department reimburses additional POC batteries at a daily rental rate per needed battery for the length of travel, including the day before and the day after travel. | CMN supplier page must list make/model of the dispensed POC to authorize the correct number/units of batteries per travel request. |
| Scenario | Policy / Effect on Coverage | Provider Action / Sequencing Risk |
|---|---|---|
| Claims sequencing and system payment behavior | System pays claims as submitted up to the 36 payments in a 60‑month period; out‑of‑order submissions can later cause earlier DOS to deny if the 36‑payment cap is subsequently identified. | Suppliers should submit claims in chronological order when possible; be aware that late submission of earlier dates may be denied if the 36 payment limit is reached. |
| Member elects new equipment after 60 months | A new rental period begins; new testing is not required and standard renewal processes apply. | Document election and start date of new equipment; submit authorization per renewal requirements (face‑to‑face within 6 months as applicable). |
| Member does not elect new equipment after 60 months and supplier retains title | Maintenance and service remain covered; a new rental period does not begin. | Continue maintenance/service billing per supplier obligations; retain CMN and supporting records. |
| Member does not elect new equipment after 60 months and supplier transfers title to member | Maintenance and service are not covered and a new rental period does not begin. | If title transfer occurs, suppliers should note that maintenance/service coverage ends; document title transfer accordingly. |
Documentation and Recordkeeping
Keep CMN supplier page and supporting records; submit only if requested, and submit discharge authorizations next business day
Suppliers must retain the CMN supplier page and all supporting records and only submit them if requested by the State of Alaska or when the individual requests authorization under Group III criteria; when dispensing at discharge submit a complete authorization request by the next business day.
- CMN supplier page must include make/model for devices when needed (e.g., POC batteries authorization).
Document renewal encounter findings in medical record
Record the encounter content in the pertinent portion of the medical record for renewals: the encounter must gather subjective and objective information associated with managing the condition for which oxygen is ordered and that information must be documented.
Definitions
Replacement and Title Transfer
Background
Face-to-face encounters (in-person or telehealth) within the prior six months are required to document continued medical necessity for DME including home oxygen systems. The encounter is used to gather subjective and objective information to diagnose, treat, or manage the condition for which oxygen is ordered and its findings must be documented in the medical record; oxygen need not be the primary reason for the visit.
Not Covered / Exclusions
There is no change to Alaska Medicaid prescription requirements as part of these updates. While Medicare-specific prescription differences were noted in the review, Alaska Medicaid continues to require that testing and test results for initial oxygen qualification be documented either on the Oxygen-specific CMN or within an EMR DME order/prescription that contains all required CMN elements.
When title to oxygen equipment transfers to the individual after the 60-month capped rental period and the member does not elect new equipment, maintenance and service are not covered. This contrasts with the scenario where the supplier retains title after 60 months, in which case maintenance and service remain covered.
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