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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101.The rules say that coverage is available for patients with significant hypoxemia in the chronic stable state if:1. The attending physician has determined that the patient has a health condition outlined in subsection D.1,2. The patient meets the blood gas evidence requirements specified in subsection D.3, and3. The patient has appropriately tried other alternative treatment measures without complete success. (See subsection B.)1. Conditions for Which Oxygen Therapy May Be CoveredA severe lung disease, such as chronic obstructive pulmonary disease, diffuse interstitial lung disease, whether of known or unknown etiology; cystic fibrosis, bronchiectasis; widespread pulmonary neoplasm; orHypoxia-related symptoms or findings that might be expected to improve with oxygen therapy. Examples of these symptoms and findings are pulmonary hypertension, recurring congestive heart failure due to chronic cor pulmonale, erythrocytosis, impairment of the cognitive process, nocturnal restlessness, and morning headache.2. Conditions for Which Oxygen Therapy Is Not CoveredAngina pectoris in the absence of hypoxemia. This condition is generally not the result of a low oxygen level in the blood, and there are other preferred treatments;Breathlessness without cor pulmonale or evidence of hypoxemia. Although intermittent oxygen use is sometimes prescribed to relieve this condition, it is potentially harmful and psychologically addicting;Severe peripheral vascular disease resulting in clinically evident desaturation in one or more extremities. There is no evidence that increased PO2 improves the oxygenation of tissues with impaired circulation; orTerminal illnesses that do not affect the lungs.You can find this information in Medicare's National Coverage Determination (NCD) for Home Use of Oxygen (240.2).The rules say that home oxygen therapy is reasonable and necessary only if all of the following conditions are met:The treating physician has determined that the beneficiary has a severe lung disease or hypoxia-related symptoms that might be expected to improve with oxygen therapy, andThe beneficiary's blood gas study meets the criteria stated below, andThe qualifying blood gas study was performed by a physician or by a qualified provider or supplier of laboratory services, andThe qualifying blood gas study was obtained under the following conditions:If the qualifying blood gas study is performed during an inpatient hospital stay, the reported test must be the one obtained closest to, but no earlier than 2 days prior to the hospital discharge date, orIf the qualifying blood gas study is not performed during an inpatient hospital stay, the reported test must be performed while the beneficiary is in a chronic stable state -i.e., not during a period of acuteillness or an exacerbation of their underlying disease, andAlternative treatment measures have been tried or considered and deemed clinically ineffective. You can find this information in Medicare's Local Coverage Determination (LCD): Oxygen and Oxygen Equipment (L33797).