Does Insurance Cover a Portable Oxygen Concentrator?

Portable oxygen concentrators (POCs) provide supplemental oxygen, allowing individuals with respiratory conditions to maintain an active lifestyle. Unlike traditional oxygen tanks, POCs extract oxygen from the air, delivering a continuous supply. Given their cost, many wonder if insurance covers these essential medical devices. This article aims to clarify insurance coverage for POCs, guiding readers through the various insurance types, medical requirements, and steps to secure coverage.

Understanding Insurance Types and Coverage

Portable oxygen concentrators are classified as Durable Medical Equipment (DME) by most insurance providers. DME is designed for repeated use, serves a medical purpose, is not generally useful to a person without illness or injury, and is appropriate for home use. Coverage for POCs often falls under the DME benefit category.

Medicare Part B typically covers POCs as DME. It generally covers 80% of the Medicare-approved rental amount after the annual Part B deductible is met, with the beneficiary responsible for the remaining 20% co-insurance. Medicare primarily covers POC rental for 36 months. The supplier must continue providing the equipment for up to 60 months (5 years) if medically necessary. After 5 years, beneficiaries can receive new equipment, restarting the 36-month rental period.

Private health insurance plans also categorize POCs as DME, but coverage varies by plan type. These plans involve deductibles, co-insurance, and co-pays, determining patient out-of-pocket costs. Review policy documents for specific terms, conditions, and network requirements. Private plans may also have their own medical necessity criteria.

Medicaid, a state-administered program, offers POC coverage, but it varies by state. Many state Medicaid programs cover up to 100% of the cost if medically necessary and fitting the state’s DME definition. Beneficiaries should contact their state Medicaid agency for exact coverage and requirements.

Meeting Medical Necessity Requirements

Insurance providers require “medical necessity” documentation for DME like POCs. This means the device must be reasonable and necessary for treating a specific medical condition, ensuring it is needed for health improvement, not merely for convenience.

A doctor’s detailed prescription is essential for establishing medical necessity. This order must include the diagnosis (e.g., lung disease, COPD), prescribed oxygen flow rate, and duration. The physician’s statement should also justify the need for a portable device, noting the patient’s mobility and benefit from oxygen outside the home or during exertion.

Objective medical test results, such as arterial blood gas (ABG) studies or pulse oximetry readings, are also required to demonstrate impaired oxygen levels. For Medicare, specific thresholds apply, like a PaO2 at or below 55 mmHg, or SaO2 at or below 88% on room air. These tests should be performed while the patient is in a chronic stable state, generally within 30 to 90 days of the prescription.

The physician’s certification must confirm that other treatments, such as medical and physical therapy, have been tried and were unsuccessful. The medical record should support the ongoing need for oxygen therapy and indicate the patient’s condition is expected to improve with its use.

Navigating the Coverage Process

After gathering medical documentation, obtaining insurance coverage for a POC involves coordinating with a Durable Medical Equipment (DME) supplier. DME suppliers often handle communication and paperwork with the insurance company. Medicare beneficiaries must choose a Medicare-approved supplier.

The supplier requires the patient’s doctor’s prescription, objective medical test results, and relevant medical records to submit a claim. For many plans, including some Medicare Advantage and private insurance, prior authorization is mandatory before equipment provision.

The DME supplier submits the prior authorization request, detailing medical necessity and prescribed equipment. The insurance company reviews this request, which may take days or weeks for approval or denial. During this time, the insurer might request additional information from the physician or patient to fully assess the claim. Monitor the request status and respond promptly to avoid delays.

Upon approval, the DME supplier provides the POC to the patient. The approval outlines coverage extent, including rental periods or cost-sharing responsibilities.

Managing Costs and Denials

Even with insurance, individuals incur out-of-pocket costs for a POC, including deductibles, co-insurance (a percentage of the approved amount), and co-pays. For example, Medicare Part B covers 80% of the approved rental cost, leaving the beneficiary responsible for 20% after the deductible.

While Medicare does not typically cover the outright purchase of a POC, some private or supplemental insurance plans might offer different arrangements, potentially covering the purchase price. Patients may also consider purchasing a used or refurbished unit to reduce upfront costs if insurance coverage is limited or denied.

If POC coverage is denied, understand the reason. Common reasons include insufficient medical necessity documentation, the device not meeting criteria, or supplier network issues. The denial letter provides the explanation and appeal steps.

The appeal process begins with an internal appeal, where the patient or representative requests reconsideration. This involves submitting a written request, often with additional medical documentation like a physician’s letter. If unsuccessful, an external review by an independent third party may be an option. Patient advocacy groups can assist with the appeal process.