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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 medically necessary services are those that are reasonable and necessary for the diagnosis or 
treatment of an illness or injury. Medically necessary services include services to improve the functioning of a 
malformed body member. You can find this rule in the Social Security Act, Section 1862(a)(1)(A). 
 
The rules say that oxygen and oxygen equipment is covered under the Durable Medical Equipment benefit 
(Social Security Act 1861(s)(6)). In order for a beneficiarys equipment to be eligible for reimbursement the 
reasonable and necessary (R&N) requirements set out in the related Local Coverage Determination must be 
met. In addition, there are specific statutory payment policy requirements, discussed below, that also must be 
met. 
 
The reasonable useful lifetime for oxygen equipment is 5 years. The RUL is not based on the chronological age 
of the equipment. It starts on the initial date of service and runs for 5 years from that date. RUL also does not 
take into account exchanges of equipment, new suppliers, or changes of modality (concentrator, gaseous, 
liquid). 
 
Stationary and portable oxygen equipment is often provided at the same time therefore the RUL for both items 
run concurrently. When the RUL of a beneficiarys portable oxygen equipment differs from the RUL of the 
beneficiarys stationary oxygen equipment, the RUL of the stationary oxygen equipment shall govern the 
application of RUL-based rules and processes for both types, stationary and portable, of oxygen equipment. 
 
Reimbursement for oxygen equipment is limited to 36 monthly rental payments. Payment for accessories (e.g., 
cannula, tubing, etc.), delivery, back-up equipment, maintenance, and repairs is included in the rental 
allowance. Payment for oxygen contents (stationary and/or portable) is included in the allowance for stationary 
equipment (E0424, E0439, E1390, E1391). 
 
Payment for stationary equipment is increased for beneficiaries requiring greater than 4 liters per minute (LPM) 
of oxygen flow and decreased for beneficiaries requiring less than 1 LPM. If a beneficiary qualifies for 
additional payment for greater than 4 LPM of oxygen and also meets the requirements for portable oxygen, the 
appropriate modifiers (QB or QF) must be used. 
 
 
 
 The supplier who provides oxygen equipment for the first month must continue to provide any necessary 
oxygen equipment and all related items and services through the 36-month rental period, unless one of the 
following exceptions is met: 
      a. Beneficiary relocates temporarily or permanently outside of the suppliers service area 
      b. Beneficiary elects to obtain oxygen from a different supplier 
      c. Individual case exceptions made by CMS or DME MAC 
      d. Item becomes subject to competitive bidding 
 
Providing different oxygen equipment/modalities (e.g., concentrator [stationary or portable], gaseous, liquid, 
trans-filling equipment) is not permitted unless one of the following requirements is met: 
      a. Supplier replaces the equipment with the same or equivalent item 
      b. Treating practitioners orders different equipment 
      c. Beneficiary chooses to receive an upgrade and signs an Advance Beneficiary Notice of Non-coverage 
(ABN) 
      d. CMS or the DME MAC determines that a change in equipment is warranted. 
 
You can find this information in the Local Coverage Article Oxygen and Oxygen Equipment - Policy Article 
A52514. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.