Provider Notice issued 09/27/12

Oxygen Reimbursement Changes Effective December 1, 2012

HFS, as part of ongoing budget management, has reviewed its policy regarding oxygen reimbursement. Effective with dates of service on and after December 1, 2012, HFS is implementing reimbursement changes for both gaseous and liquid systems and contents.

Reimbursement will be based upon the Medicare rate for the HCPCS code in effect as of January 1, 2012, minus six (6) percent. The exception to this is code E0425 – Stationary large tank system. As Medicare has no rate for this code, the HFS reimbursement for this code will not change.

Effective with dates of service on and after December 1, 2012, the HCPCS codes identified in the table with this notice will not be subject to the additional 2.7% rate reductions.

All oxygen systems and contents will require prior approval. However, long term care residents (excluding SLF residents) continue to be exempt from prior approval requirements. All prior approval requests for oxygen therapy must include medical documentation to substantiate medical essential need. Upon prior approval, gaseous and liquid contents will be reimbursed on a per month flat rate basis. All related supplies are included with the rental systems. Any supply related to a patient-owned system will require prior approval.

Providers should request approval only for content if an oxygen system (E0431 or E0425) is already purchased and patient-owned.

Providers that have a current prior approval for a participant’s stationary system beyond December 1, 2012, will need to submit a new prior approval request for the portable system (E0431 or E0434) and content (E0441, E0443, or E0444). Another option is HCPCS code K0738 – Portable gas oxygen refill system, which will be opened effective December 1, 2012.

The department reminds providers that, according to 89 Illinois Administrative Code, Section 140.42 (pdf), the department will not give prior approval for an item if a less expensive item is appropriate to meet the patient’s needs.

The oxygen codes and revised rates are identified in the table with this notice. Any questions regarding this notice may be directed to a DME billing consultant in the Bureau of Comprehensive Health Services at 877-782-5565, option 3, option 2.

Theresa A. Eagleson, Administrator

Division of Medical Programs

Oxygen Rates Effective with Dates of Service On and After December 1, 2012

Patient on Liquid Oxygen

Patient on Stationary Concentrator and Portable Gas

Patient on Stationary Concentrator and Liquid Portable Gas

Patient on Stationary Concentrator OR Liquid Oxygen with No Portable Delivery

Patient on Stationary Gas Oxygen with No Portable Delivery

Patient on Portable Gas Oxygen