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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 state that a portable oxygen system is covered if the beneficiary is mobile within the home for Groups 
I and II, and the qualifying blood gas study was performed while at rest (awake) or during exercise. If the only 
qualifying blood gas study was performed during sleep, portable oxygen will be denied as not reasonable and 
necessary. 
 
If coverage criteria are met, a portable oxygen system is usually separately payable in addition to the stationary 
system. See exception in the LCD-related Policy Article Non-Medical Necessity Coverage and Payment Rules, 
OXYGEN EQUIPMENT, Initial 36-Months section. 
 
If a portable oxygen system is covered, the supplier must provide whatever quantity of oxygen the beneficiary 
uses; Medicares reimbursement is the same, regardless of the quantity of oxygen dispensed. 
 
LITER FLOW GREATER THAN 4 LPM: 
 
If initial oxygen coverage criteria for Group I, II or III have been met, a higher allowance for a stationary 
system for a flow rate of greater than 4 liters per minute (LPM) will be paid. For Group I or II, coverage greater 
than 4 LPM requires a qualifying blood gas study performed while the beneficiary is on 4 or more LPM. If a 
flow rate greater than 4 LPM is billed and the coverage criterion for the higher allowance is not met, payment 
will be limited to the standard fee schedule allowance. (Refer to the LCD-related Policy Article for additional 
information on payment for greater than 4 LPM oxygen.) 
 
MISCELLANEOUS: 
 
Oxygen reimbursement is a bundled payment. All options, supplies and accessories are considered included in 
the monthly rental payment for oxygen equipment. Oxygen rental is billed using the appropriate code for the 
provided oxygen equipment. Separately billed options, accessories or supply items will be denied as 
unbundling. 
 
Emergency or stand-by oxygen systems for beneficiaries who are not regularly using oxygen will be denied as not reasonable and necessary since they are precautionary and not therapeutic in nature. 
 
Topical hyperbaric oxygen chambers (A4575) will be denied as not reasonable and necessary.  
 
Topical oxygen delivery systems (E0446) will be denied as not reasonable and necessary.  
 
REFILLS OF OXYGEN CONTENTS: 
 
For Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) items and supplies provided 
on a recurring basis, billing must be based on prospective, not retrospective use. 
 
Oxygen contents are reimbursed with a monthly allowance covering all contents necessary for the month. 
Supply allowances are not subject to the refill monitoring and documentation requirements specified in Chapter 
5 of the Medicare Program Integrity Manual. 
 
All other supplies, e.g. tubing, masks or cannulas, etc., are included in the monthly rental payment. Supplies 
that are not separately payable are not subject to the refill monitoring and documentation requirements 
specified in Chapter 5 of the Medicare Program Integrity Manual. 
 
See the Non-Medical Coverage and Payment Rules section of the LCD-related Policy Article for additional 
information about coverage of oxygen contents. 
 
You can find this information in the Local Coverage Determination (LCD) Oxygen and Oxygen Equipment 
L33797. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.