No. Contract suppliers are entitled to begin a new capped rental period or to receive additional payments for oxygen only when a beneficiary is otherwise eligible to receive equipment from a grandfathered supplier. Regulations at 42 CFR 414.408(j) indicate that suppliers can become grandfathered suppliers only for beneficiaries permanently residing in a CBA who were renting DME or oxygen from them prior to the implementation of the program. Beneficiaries not residing in a CBA at the time the program began are not eligible for the grandfathering option. Therefore, the capped rental period for DME does not restart and the contract supplier is not entitled to receive additional oxygen rental payments, as specified in 42 CFR 414.408(h).

Beneficiaries moving into a CBA after the competitive bidding program becomes effective must use a contract supplier to receive competitively bid oxygen and DME. The moving beneficiary must return his/her rented item to the original supplier and receive replacement equipment from a contract supplier. A contract supplier is entitled to receive payments for the remainder of the rental period or until the equipment is no longer medically necessary, whichever occurs first.

The competitive bidding program has not changed the coverage criteria or medical necessity documentation requirements for competitively bid items. For example, in the case of power wheelchairs, beneficiaries who begin renting the power wheelchair in a non-CBA and then move to a CBA are not entitled to the first month purchase option as defined in 42 CFR 414.230(e).

A new detailed written order is required when a beneficiary switches suppliers. Each supplier that bills for an item must, in the event of an audit, be able to produce sufficient information to show that the coverage criteria and related medical necessity documentation requirements are met. The Medicare law requires that the supplier that furnishes the oxygen and oxygen equipment during the 36th month of continuous use must continue to furnish the oxygen and oxygen equipment after the cap for any period of medical need for the remainder of the reasonable useful lifetime of the equipment.

For more information, please view the Grandfathering for Oxygen or Grandfathering for DME fact sheet.

No. This is considered a temporary interruption in billing or a break in service. The beneficiary’s use of the equipment did not cease while he or she was inpatient. Therefore, the medical need never ended. The grandfathered supplier must continue providing the oxygen upon the beneficiary’s discharge from the hospital or facility. This policy applies to any type of break in service (e.g., admission to a nursing facility, enrollment in a managed care plan, travel out of the country, etc.).

No. A supplier that chooses to become a grandfathered supplier for an item must continue to provide the item to all beneficiaries who choose to continue receiving the item from the grandfathered supplier.

A grandfathered supplier for oxygen and oxygen equipment must continue furnishing the oxygen and oxygen equipment for any period of medical need for the remainder of the reasonable useful lifetime (five years) of the equipment.

A grandfathered supplier for other rented durable medical equipment (DME) must furnish the item for the remaining months of the rental period, unless the item is no longer medically necessary. For capped rental DME, the grandfathering relationship ends when the ownership is transferred to the beneficiary or the item is no longer medically necessary. For example, if a non-contract supplier grandfathers the rental of a CPAP device, the supplier must continue to rent the item to the beneficiary unless the ownership is transferred to the beneficiary or the item is no longer medically necessary. 

After the DMEPOS Competitive Bidding Program is implemented, when a new period of continuous use begins following a break in need of greater than 60 days plus the days remaining in the last paid rental month, the beneficiary must obtain new or additional equipment from a contract supplier.

For more information, please view the Fact Sheet.

The beneficiary must obtain the replacement oxygen equipment from a contract supplier for oxygen and oxygen equipment for the CBA. The non-contract supplier should coordinate with the contract supplier during this transition. 

For more information, please view the Fact Sheet.

If a beneficiary who would otherwise be entitled to obtain oxygen from a grandfathered supplier changes to a contract supplier, the contract supplier will be paid at least 10 monthly payment amounts at the single payment amount regardless of how many months the previous supplier was paid.

For example, for rental agreements in months 2 through 26, the new contract supplier will be paid for the remaining rental months of the period. Contract suppliers assuming rental agreements that are in months 27 or later will receive a minimum of 10 payments regardless of how many months the previous supplier was paid.

If the beneficiary changes to a new contract supplier, the new contract supplier must replace the equipment. If the beneficiary changes from a contract supplier to another contract supplier, the new contract supplier is NOT entitled to a minimum number of months of payment and will be paid the single payment amount for the duration of the rental period not to exceed 36 months.

If a beneficiary who would otherwise be entitled to obtain a capped rental DME item from a grandfathered supplier changes to a contract supplier, a new 13-month rental period begins regardless of how many months the previous supplier was paid. However, rental payments only continue if the item continues to be medically necessary. The contract supplier will be paid the single payment amount. If the beneficiary changes from a contract supplier to another contract supplier, a new rental period does NOT begin, and the new contract supplier will be paid the single payment amount for the duration of the capped rental period.

For more information, please view the Grandfathering for Oxygen or Grandfathering for DME fact sheet.