What is covered in Medicare Part B for Oxygen Therapy?

Medicare covers rental of oxygen equipment (considered durable medical equipment – or DME), or you can purchase your equipment and Medicare will cover content and supplies. The following conditions must first be met:

  • Your physician has stated that you have a severe lung disease, OR you are not getting enough oxygen.
  • Your health might improve with oxygen therapy.
  • Your arterial blood gas level falls within a certain range.
  • Other alternative measures have failed.
  • If you meet the above requirements, Medicare will cover the following:
  • Systems for furnishing oxygen.
  • Containers that store oxygen.
  • Tubing and related supplies for the delivery of oxygen and oxygen contents.
  • A humidifier when it is used with your oxygen equipment.

Who is eligible for Oxygen Therapy coverage?

Anyone enrolled in Medicare Part B is covered.

What is the cost of Oxygen Therapy through Medicare?

You pay 20% of the Medicare approved amount once you pay the Part B deductible. If you have enrolled in a Medicare Supplement Plan F policy the 20% coinsurance not covered by Medicare will be paid by the supplement carrier. Plans G, K, L and N may require the insured to pay a portion of the Part B deductible, coinsurance or copayments.

Medicare will pay suppliers a monthly fee to provide all medically necessary oxygen and oxygen equipment. This includes related supplies such as tubing or a mouthpiece.  

After 36 months of continuous use, typically Medicare will cease rental payments for the oxygen equipment rental. However, typically you will continue to receive the oxygen equipment and accessories from your supplier with no rental charges until the end of the normal lifetime of the equipment – usually 5 years after the date of original delivery.

NOTE:  Medicare will only cover your durable medical equipment (DME) if your doctor / supplier is enrolled in Medicare. If a supplier does not accept assignment, Medicare does not limit the amount the supplier can charge you. Also, you may be required to pay the entire bill (your portion and Medicare’s share) at the time you receive the equipment.

Competitive Bidding

Certain areas might be affected by Medicare’s Competitive Bidding Program. Typically, if you have Original Medicare and you are located in a Competitive Bidding area, Medicare will only pay for equipment and supplies if they are provided by Medicare contracted suppliers. Contract suppliers are not allowed to charge you more than 20% coinsurance, and any remaining deductible for equipment or supplies.

If you have been renting your equipment for 27 to 35 months, and contracts begin in your area, and if you switch to a contract supplier, then you may be required to pay for renting the equipment a few months longer than planned (up to 9 months beyond the 36-month period). This creates additional months of coinsurance, but the amount you pay might be lower than previously because your new monthly payment will be based on the competitive bidding program rates. When switching suppliers, find out how this might affect you.

If you have been renting your equipment for 36 months, you do not need to do anything. Your current supplier will be required to continue providing your equipment at no additional charges, until the equipment is in need of replacement at the end of its reasonable lifetime. At this point, you must get replacement equipment from a contract supplier.


If your current supplier is not awarded a new contract, they can elect to continue to participate as a “grandfathered supplier”.  If they elect for this option in absence of receive a Medicare contract, they can continue to rent equipment to you if you were already renting when the program began. This applies to oxygen, oxygen equipment, and specific rented equipment. When the rental period ends, you must switch from the grandfathered supplier to a contract supplier.

However, if your equipment rental began after the program started, Medicare will NOT pay for the new equipment.

Suppliers are required to inform you in writing 30 business days before the program begins that they will not be under contract and whether they will be grandfathered or not. If your supplier is not contracted or grandfathered, you will be required to switch to a contract supplier in order for Medicare to cover your equipment.