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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 when used in the home, oxygen and oxygen equipment can make meaningful contributions 
to the treatment of patients with both acute and chronic conditions who require the medical gas on either a 
  
  short- or long-term basis. 
 
Oxygen therapy and oxygen equipment is covered in the home for acute or chronic conditions, short- or long- 
term, when the patient exhibits hypoxemia as defined below. 
 
Initial claims for oxygen therapy for hypoxemic patients must be based on the results of a clinical test that has 
been ordered and evaluated by the treating practitioner. Such a test is usually in the form of a measurement of 
the partial pressure of oxygen (PO2) in arterial blood. A measurement of arterial oxygen saturation obtained by 
ear or pulse oximetry, however, is also acceptable when ordered and evaluated by the treating practitioner and 
performed under his or her supervision or when performed by a qualified provider or supplier of laboratory 
services. A durable medical equipment (DME) supplier is not considered a qualified provider or supplier of 
laboratory services for purposes of this National Coverage Determination (NCD). This prohibition does not 
extend to the results of blood gas tests conducted by a hospital certified to do such tests. 
 
When the arterial blood gas and the oximetry studies are both used to document the need for home oxygen 
therapy and the results are conflicting, the arterial blood gas study is the preferred source of documenting 
medical need. 
 
Required qualifying arterial blood gas or oximetry studies must be performed at the time of need. The time of 
need is defined as during the patients illness when the presumption is that the provision of oxygen in the home 
setting will improve the patients condition. For an inpatient hospital patient, the time of need is within 2 days 
of discharge. For those patients whose initial oxygen prescription does not originate during an inpatient 
hospital stay, the time of need is during the period when the treating practitioner notes signs and symptoms of 
illness that can be relieved by oxygen in the patient who is to be treated at home. 
 
Patients exhibiting hypoxemia are defined using the clinical criteria below: 
 
Group I: 
An arterial PO2 at or below 55 mm Hg, or an arterial oxygen saturation at or below 88%, taken at rest, 
breathing room air; or 
An arterial PO2 at or below 55 mm Hg, or an arterial oxygen saturation at or below 88%, taken during sleep for 
a patient who demonstrates an arterial PO2 at or above 56 mm Hg, or an arterial oxygen saturation at or above 
89%, while awake; or a greater than normal fall in oxygen level during sleep (a decrease in arterial PO2 more 
than 10 mm Hg, or decrease in arterial oxygen saturation more than 5%) associated with symptoms or signs 
reasonably attributable to hypoxemia (e.g., impairment of cognitive processes and nocturnal restlessness or 
insomnia). In either of these cases, coverage is provided only for use of oxygen during sleep, and then only one 
type of unit will be covered. Portable oxygen, therefore, would not be covered in this situation; or, 
An arterial PO2 at or below 55 mm Hg or an arterial oxygen saturation at or below 88%, taken during exercise 
[defined as either the functional performance of the patient or a formal exercise test], for a patient who 
demonstrates an arterial PO2 at or above 56 mm Hg, or an arterial oxygen saturation at or above 89%, during 
the day while at rest. In this case, supplemental oxygen is provided for during exercise if the use of oxygen 
improves the hypoxemia that was demonstrated during exercise when the patient was breathing room air. 
 
Group II: Coverage is available for patients whose arterial PO2 is 56-59 mm Hg or whose arterial blood 
oxygen saturation is 89%, if there is: 
 
Dependent edema suggesting congestive heart failure; or, 
Pulmonary hypertension or cor pulmonale, determined by measurement of pulmonary artery pressure, gated 
blood pool scan, echocardiogram, or "P" pulmonale on electrocardiogram (EKG) (P wave greater than 3 mm in 
standard leads II, III; or, 
Erythrocythemia with a hematocrit greater than 56%. 
In reviewing the arterial PO2 levels and the arterial oxygen saturation percentages specified above, the Medicare Administrative Contractors (MACs) must take into account variations in oxygen measurements that 
may result from such factors as the patient's age, the patients skin pigmentation, the altitude level, or the 
patient's decreased oxygen carrying capacity. 
 
The Centers for Medicare & Medicaid Services will not cover oxygen therapy and oxygen equipment in the 
home in the following circumstances: 
 
Angina 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; or, 
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; or, 
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; or, 
Terminal illnesses unless they affect the ability to breathe. 
 
You can find these rules in the National Coverage Determination (NCD) Home Use of Oxygen 240.2. 
 
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.