How Medicare Covers Durable Medical Equipment and Oxygen Equipment

How Medicare Covers DME and Oxygen Equipment Oxygen therapy equipment falls under the category known as “durable medical equipment” (DME), as do all necessary medical devices covered by medicare. Many other types of medical equipment also fall under this category. Things like hospital beds, wheelchairs, prosthetic equipment, and oxygen concentrators are all considered DME.

With Part B, Original Medicare will cover DME when your doctor deems it necessary and provides it for use in your home. In this situation, nursing homes and hospitals providing you with Medicare-covered care will not qualify as your “home”.

If you are living in a long-term care facility, however, this facility can count as your "home", and your oxygen equipment could be covered under medicare. Also, if you are in a nursing home or other hospital setting, and they provide you with the equipment, the facility is responsible for paying for upkeep, repairs and replacements.

HMO or PPO Medicare Advantage Plans must cover the same items as original medicare. The costs will vary depending on which plan you choose. Depending on the plan, the costs might even be cheaper than Original Medicare. If you are already benefiting from a medicare advantage plan, contact them and ask how much DME will cost under their plan.

If you are switching to a new medicare advantage plan, be sure to call the new plan and ask for utilization management. They will tell you if your specific equipment will be covered and how much it will cost. If you are switching to Original Medicare, you can tell your supplier to bill Medicare as soon as your Medicare Advantage Plan is up.

You will also need to ask for a utilization plan if your insurance provider leaves the Medicare Advantage Plan. They will tell you what you need to do to get care under the original medicare benefits, or if you can switch to a different medicare advantage plan.

Under original medicare, your doctor will need to write a prescription for all the DME you will need. For some typs of DME, they may also have to write a separate letter directly to medicare, stating your need for the equipment. This certificate must be resubmitted whenever you need new equipment.

This document is known as a “certificate of medical necessity”. Your doctor and your supplier will work together to make sure all the proper paperwork is done and submitted to medicare.

In general, under Medicare part B, you would need to pay 20% of the amount approved by medicare, after you have met your deductible for that year. For the year of 2015 the deductible is $147. Medicare will then pay the remaining 80%. Medicare's approved amount is lower than the cost of the equipment. You might be required to pay less because medicare pays for certain types of equipment in different ways.

Sometimes equipment is set up to be "rented", or treated as a rental from the medical supply company. Such is the case with oxygen therapy equipment. There is often a specific time period attached to the rental period. For oxygen therapy equipment, this initial period lasts for 36 months.

After that 36 months, you will be done paying for your part of the equipment, and the contract will go on for another 2 years if you still need the equipment. The medical supply company will still be responsible for the maintenance and any repairs needed on the home oxygen equipment.

What is “assignment” according to Original Medicare?

Assignment is the agreement entered into by your caregivers, medical suppliers, medicare, and you, for you to receive the care and equipment you need covered under medicare. Those who are billing medicare who agree to accept the assignment are agreeing to accept the medicare-approved amount as the fully payment for services. You must be the 20% coinsurance and the deductible, and then medicare will pay the remaining 80%.

In order to receive the equipment you need, you will need to find a supplier who is enrolled in the Medicare program. Enrolled members known as “participating suppliers” are required to accept assignment. Suppliers who are enrolled but not classified as “participating” have the option of whether to accept assignment or not. If they are not enrolled, you will need to pay the cost of the DME out of pocket, but the equipment will be under your complete control with no restrictions on use.

You can go to to find a list of suppliers in your area who accept assignment. Let's say you've found a supplier that participates in assignment now you need to find out what DME Medicare will pay to rent, and what equipment Medicare will flat out purchase for you. Medicare will generally only purchase inexpensive items such as canes or wheelchairs, while high-tech devices, such as oxygen concentrators, Medicare will pay to rent but will be taken away at the end of the contract and you have to go through the process again.

If you do own some medicare covered DME, medicare will continue to cover 80% of the costs for repairs and replacements. If you rent, medicare will make monthly payments for the cost of the item, and how long this goes on depends on the type of equipment. You will have to pay 20%, plus the deductible for these costs.

When you no longer need the rental equipment, the supplier will pick it up for you. They also be responsible to come and get it if it needs repairs or a replacement.

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