Alaska Medicaid Home Oxygen Coverage Update

Coverage Criteria for Home Oxygen Therapy

Initial Therapy — initial coverage of home oxygen therapy and oxygen equipment when ALL of the following are met

Initial coverage of home oxygen therapy and oxygen equipment is reasonable and necessary when ALL of the following are met:

Initial general requirements: The treating practitioner has ordered and evaluated the results of a qualifying blood gas study or oximetry test performed at the time of need; the member's test meets the listed criteria; the qualifying test was performed by the treating practitioner or by a qualified provider or supplier of laboratory services; and provision of oxygen and oxygen equipment in the home setting will improve the member's condition.

Group I qualifying criteria: An arterial PO2 ≤55 mm Hg or arterial oxygen saturation ≤88% at rest (awake) on room air; OR PO2 ≤55 mm Hg or saturation ≤88% during sleep for a member who demonstrates awake PO2 ≥56 mm Hg or saturation ≥89%; OR a decrease in PO2 >10 mm Hg or a decrease in saturation >5% during sleep associated with hypoxemia symptoms; OR PO2 ≤55 mm Hg or saturation ≤88% during exercise for a member who demonstrates adequate daytime rest values (PO2 ≥56 mm Hg or saturation ≥89%).

Group II qualifying criteria: Arterial PO2 56–59 mm Hg or arterial oxygen saturation 89% AND any of: dependent edema suggesting congestive heart failure; pulmonary hypertension or cor pulmonale documented by appropriate testing; OR erythrocythemia with hematocrit >56%. Special note: initial coverage for Group II is limited to three months.

Group III qualifying criteria: Absence of hypoxemia as defined in Groups I and II AND a medical condition documented in high-quality peer-reviewed literature to be improved by oxygen therapy (for example, cluster headaches). Special note: initial coverage for Group III is limited to three months.

Pediatrics (under age 5) criteria: Member diagnosed with a lung disease or hypoxia-related condition expected to improve with oxygen, followed by a pediatric pulmonologist or cardiologist; if aged ≥1 year: O2 saturations <93% on three independent intermittent measurements for at least 5% of a continuous recording period including sleep; if aged <1 year: O2 saturations <90% on three independent intermittent measures for at least 5% of a continuous recording period including sleep.

Renewal Therapy and Authorization Timeframes — renewal and SA timeframe rules

Renewal and SA timeframe rules:

Renewal general requirements: Face-to-face visit within 6 months prior to the renewal request; the encounter must gather subjective and objective information for the condition for which oxygen is ordered; findings must be documented in the medical record; and the record must document that the member continues to require and actively use the home oxygen system.

Special renewal for initial Group II/III (members ≥5 yrs): Initial renewal for members 5 years and older who qualified under Group II or Group III must include a face-to-face visit between day 61 and day 90 after initiation of therapy and documentation of a repeated qualifying test.

SA approval durations: Up to 12 months: initial SAs for members ≥5 years qualifying under Group I; initial SAs for members under age 5; and renewal SAs for all members. Up to 3 months: initial SAs for members ≥5 years qualifying under Group II and Group III.

Requests that do not meet the specific coverage criteria listed in this policy will be reviewed on a case-by-case basis and may not meet coverage without additional justification. The Division applies prior authorization criteria to assess medical necessity, clinical effectiveness, and other program integrity considerations when evaluating such requests.

Initial coverage for members qualifying under Group III is limited and requires documentation that the member has a medical condition documented in high-quality, peer-reviewed literature to improve with oxygen therapy (examples include cluster headaches). Initial coverage is limited to 3 months, and conditions lacking peer-reviewed evidence of benefit will not be covered without additional supporting justification and documentation.

Coding and Clinical Thresholds

Concentrator HCPCS codes referencedHCPCSCovered

E1392	Portable oxygen concentrator (includes device, battery/batteries capable of ≥2 hours remote portability at 2 LPM equivalency, charger, adapters, carry bag/cart)
E1390	Stationary oxygen concentrator

inv-06: Oxygenation thresholds — examples of PaO2 and SpO2 thresholds and pediatric saturation notes

Adult resting thresholdArterial PO2 ≤55 mm Hg or arterial oxygen saturation ≤88% at rest (awake) breathing room air.

Sleep-related thresholdPO2 ≤55 mm Hg or saturation ≤88% during sleep for members who have awake PO2 ≥56 mm Hg or saturation ≥89%.

Exercise-related thresholdPO2 ≤55 mm Hg or saturation ≤88% during exercise for members with adequate daytime rest values (PO2 ≥56 mm Hg or saturation ≥89%).

Pediatric saturation (≥1 year)O2 saturations <93% on three independent intermittent measures for ≥5% of a continuous recording period that includes sleep.

Pediatric saturation (<1 year)O2 saturations <90% on three independent intermittent measures for ≥5% of a continuous recording period that includes sleep.

Provider Requirements and Prior Authorization

Prior Authorization

Prior Authorization Required

A service authorization (SA) is required prior to dispensing any home oxygen and oxygen equipment, except when equipment is dispensed to allow a member to discharge from the hospital. Providers must ensure the SA request and required documentation are submitted in the timeframes below.

SA required for all home oxygen and oxygen equipment (see exceptions for discharge)

Prior Authorization

Prior Dispensing Timing

Prescriber-completed CMN for Home Oxygen and Oxygen Equipment or an electronic DME order/prescription that contains all required CMN elements must be obtained prior to dispensing, except when equipment is necessary for hospital discharge. If equipment is dispensed for discharge, the prescriber completed CMN or electronic DME order/prescription and the provider completed CMN Oxygen Supplier Page form must be submitted within ONE business day.

Prescriber CMN OR electronic DME order/prescription required prior to dispensing (except discharge)
If dispensed for discharge, required forms must be submitted within ONE business day

Clinical Group Definitions

inv-12: Group I — hypoxemia at rest/sleep/exercise thresholds (PaO2 ≤55 mm Hg or SpO2 ≤88% etc.)

Primary Group I criterionAn arterial PO2 ≤55 mm Hg or arterial oxygen saturation ≤88% at rest (awake) while breathing room air.

Group I sleep criterionPO2 ≤55 mm Hg or saturation ≤88% during sleep for a member who demonstrates awake PO2 ≥56 mm Hg or saturation ≥89%.

Group I nocturnal desaturationA decrease in PO2 >10 mm Hg or a decrease in saturation >5% during sleep with symptoms of hypoxemia (e.g., cognitive impairment, nocturnal restlessness).

Group I exercise criterionPO2 ≤55 mm Hg or saturation ≤88% during exercise for a member who demonstrates adequate daytime rest values (PO2 ≥56 mm Hg or saturation ≥89%).

inv-13: Group II — PaO2 56–59 mm Hg or SpO2 89% plus qualifying comorbidity criteria

Group II oxygenation range

Equipment-Specific Medical Necessity

Equipment-specific medical necessity — equipment selection and authorization must align with clinical qualifying groups and documented oxygen needs

Equipment selection and authorization must align with the member's clinical qualifying group and documented oxygen needs:

Stationary vs Portable restrictions: Members aged 5 years and older who qualify under #2 or #3 of Group I are limited to stationary equipment only.

Portable concentrator battery and weight requirements (E1392): When dispensing a portable oxygen concentrator (HCPCS E1392), providers must provide enough batteries to allow a minimum of 2 hours of remote capability at a minimum 2 LPM equivalency; the device must include an integrated or beneficiary-replaceable battery(ies) capable of at least 2 hours remote portability, charger, AC/DC adapters, and carry bag/cart; and the combined weight of the concentrator and the battery/batteries capable of at least 2 hours of remote portability must be 20 pounds or less.

Billing when POC functions as stationary: If a portable concentrator meets the listed criteria and is capable of functioning as a stationary concentrator (operating 24/7), the stationary concentrator HCPCS code E1390 may be billed in addition to HCPCS E1392.

Rental, Purchase, and Capped Rental Policies

Equipment / Category	Capped rental policy	Effective date / notes
Oxygen equipment (general)	Subject to a 36-month capped rental period regardless of current service authorization approvals; prior three years of reimbursements will be reviewed as part of implementation.	Capped rental period begins January 1, 2024; guidance revisions effective December 29, 2023.

Documentation Requirements

Documentation Required

Electronic DME orders must contain all CMN elements to substitute for paper CMN

When using an electronic DME order/prescription in place of the paper CMN, the electronic order must contain all required CMN elements listed by the policy to be accepted as equivalent.

Required elements include prescriber name, prescriber Medicaid ID or NPI, affiliation, member identifiers (name, DOB, member ID), diagnosis codes/descriptions, length of need, date of face-to-face visit, date and results of testing (when required), prescription details (frequency of use, liter flow), equipment order (identify each system), and prescriber wet or verified electronic signature.
An electronic order missing any required CMN element will not substitute for the prescriber-completed CMN.

Items Not Covered

Portable oxygen concentrators that do not meet the specified HCPCS E1392 component and performance requirements may not qualify for coverage or for billing as E1392. HCPCS E1392 must include the device and batteries (integrated or beneficiary-replaceable) capable of providing at least 2 hours of remote portability at a minimum of 2 LPM equivalency, a battery charger, AC and DC power adapters, and a carry bag or cart. The combined weight of the concentrator and the battery(ies) capable of this remote portability must be ≤ 20 pounds. Devices failing to meet these battery, weight, or included-component specifications may be excluded from coverage as E1392 and associated billing rules.

Background and Rationale

Home oxygen therapy is intended to correct hypoxemia and to improve physiological and symptomatic outcomes in selected respiratory and cardiac conditions. Alaska Medicaid groups members into criteria-driven categories (Group I–III) that define qualifying oxygenation thresholds and clinical circumstances for initial and renewal coverage, and applies prior authorization to ensure oxygen provision in the home setting will improve the member’s condition.

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Home Oxygen and Oxygen Equipment — Coverage, Authorization, and Equipment Rules