Medicare's Payment for Portable Oxygen Concentrators

Medicare Part B covers portable oxygen concentrators as durable medical equipment (DME), but it does not pay the full cost. Medicare pays 80 percent of the approved amount after you meet your Part B deductible. You pay the remaining 20 percent, plus the full deductible upfront. The approved amount varies by supplier and region, so two identical machines may have different Medicare prices depending on where you rent or buy.

The payment method depends on whether you rent or purchase. If you rent, Medicare pays the supplier directly for each month of rental, and you pay your 20 percent share each month. If you buy, Medicare pays 80 percent of the approved purchase price once, and you own the machine outright. Most people rent initially because the upfront cost is lower, but after 36 months of rental payments, the total cost often exceeds the purchase price.

Medicare requires that a doctor order the concentrator and document that you need it for a medical condition — usually chronic lung disease, heart disease, or severe anemia. The supplier must be enrolled in Medicare and meet equipment standards. Without a valid prescription and a Medicare-enrolled supplier, Medicare will not pay anything.

Key Takeaways

  • Medicare Part B pays 80 percent of the approved rental or purchase price after you meet your deductible; you pay 20 percent of the approved amount plus any difference between the approved price and what the supplier charges.
  • Renting costs less per month but adds up over time; after 36 months, buying usually becomes cheaper, and Medicare stops covering rental after that point.
  • Your doctor must write an order stating you need the concentrator, and the supplier must be enrolled in Medicare or the claim will be denied.
  • The approved amount varies by region and supplier, so calling two suppliers for their Medicare prices can show you a range of what you will owe.

How Medicare Calculates What It Pays

Medicare sets an approved amount for each type of portable oxygen concentrator in each region. This amount is not the same as the supplier's retail price. If a supplier charges $3,000 to buy a concentrator but Medicare's approved amount is $2,000, Medicare pays 80 percent of $2,000 ($1,600), and you pay 20 percent of $2,000 ($400). You do not owe the extra $1,000 difference — that is the supplier's write-off. However, if you have not met your Part B deductible yet, you pay the full deductible first, then Medicare pays 80 percent.

For rentals, Medicare pays a monthly approved amount. If the approved rental amount is $200 per month, Medicare pays $160, and you pay $40 each month. After 36 months of rental payments, Medicare stops covering rental. At that point, you can purchase the concentrator, and Medicare will pay 80 percent of the approved purchase price — but only if you have not already paid more than the purchase price in rental fees combined.

The approved amount changes yearly and differs by state and sometimes by county. You can find the approved amount for your region by calling Medicare at 1-800-MEDICARE or asking the supplier directly. Suppliers are required to tell you the Medicare approved amount before you commit to renting or buying.

Renting vs. Buying: The Cost Difference

Renting a portable oxygen concentrator through Medicare typically costs $30 to $60 per month after your 20 percent coinsurance, depending on the approved amount in your area. Over 36 months, that adds up to $1,080 to $2,160 out of pocket. Buying usually costs $1,500 to $3,000 out of pocket (your 20 percent share) after Medicare pays its 80 percent. The break-even point is usually around month 18 to 24, meaning if you need the concentrator for longer than two years, buying saves money.

Renting makes sense if you are unsure whether you will need the concentrator long-term, if you want the supplier to handle repairs and maintenance, or if you cannot afford the upfront purchase cost. Buying makes sense if your doctor says you will need it indefinitely, if you want to own the equipment, or if you have already rented for more than 18 months.

One important rule: if you rent for 36 months, Medicare stops paying for rental. You then have the option to purchase the concentrator at the approved purchase price, but you cannot continue renting under Medicare coverage. Some suppliers will sell you the rental unit at a discount at this point, but you should ask about this before you start renting.

What Your Doctor's Order Must Include

Your doctor must write a prescription or order that states you have a condition requiring supplemental oxygen and that a portable concentrator is medically necessary. Common may have access to conditions include COPD, pulmonary fibrosis, heart failure, severe anemia, and sleep apnea with low oxygen levels. The order does not need to be lengthy, but it must include your diagnosis and a statement that the concentrator is needed.

The supplier will submit this order to Medicare along with your claim. If the order is missing or vague, Medicare will deny the claim and ask for more information. This can delay payment by several weeks. Before you sign a rental or purchase agreement, confirm with the supplier that they have received the order from your doctor and that it contains enough detail for Medicare to process.

If your doctor has not ordered a concentrator yet, schedule an appointment and bring documentation of your oxygen levels (usually from a recent blood test or sleep study). Medicare requires objective evidence that your oxygen saturation is below a certain threshold, typically 88 percent or lower at rest or during activity.

Finding a Medicare-Enrolled Supplier

Not all medical equipment suppliers are enrolled in Medicare. If you use a supplier who is not enrolled, Medicare will not pay, and you will owe the full cost. You can verify that a supplier is enrolled by calling Medicare at 1-800-MEDICARE or by searching the Medicare Supplier Directory online at cms.gov.

When you call a supplier, ask three things: Are you enrolled in Medicare? What is the Medicare approved amount for a portable concentrator in my zip code? And what will my out-of-pocket cost be after Medicare pays? A Medicare-enrolled supplier can answer all three questions when ready. If they cannot or seem unsure, call another supplier.

Some large suppliers like Apria, Lincare, and Rotech are enrolled nationwide. Smaller local suppliers may also be enrolled. Price and service quality vary, so calling two or three suppliers to compare their Medicare approved amounts and customer reviews is worth the time.

Meeting Your Part B Deductible

Before Medicare pays anything, you must meet your Part B deductible, which is $240 in 2024 (this amount changes yearly). This deductible applies to all Part B services and equipment combined — doctor visits, lab tests, imaging, and DME all count toward the same deductible. Once you meet it in a calendar year, Medicare begins paying its share of covered services for the rest of that year.

If you have already met your deductible earlier in the year through other medical services, you do not pay it again for the concentrator. If you have not met it, you pay the full approved amount for the concentrator until the deductible is satisfied, then Medicare pays 80 percent of the remaining approved amount.

For example, if the approved purchase price is $2,000 and you have not met your deductible, you pay $240 (deductible) plus 20 percent of the remaining $1,760 ($352), for a total of $592 out of pocket. Medicare pays $1,408.

Supplemental Insurance and Other Coverage

If you have a Medigap or Medicare Advantage plan, your out-of-pocket cost may be lower. Medigap plans vary in what they cover, but many pay part or all of your 20 percent coinsurance for DME. Medicare Advantage plans have their own rules and may require you to use specific suppliers or may have different copays. Check your plan documents or call your plan to find out what you will owe before you rent or buy.

If you have Medicaid in addition to Medicare, Medicaid may cover costs that Medicare does not, including the deductible and coinsurance. The rules vary by state. Contact your state Medicaid office to ask whether they cover portable oxygen concentrators and what your cost would be.

If you are a veteran, the VA may cover portable oxygen concentrators through its own program, separate from Medicare. You can pursue both Medicare and VA coverage simultaneously, though you cannot receive duplicate payments for the same equipment.

Frequently Asked Questions

Does Medicare cover portable concentrators for travel?

Yes. Medicare covers portable concentrators whether you use them at home or while traveling. The approved amount is the same regardless of how often you travel. Some suppliers offer lightweight or battery-powered models that are easier to carry; these are still covered by Medicare at the same approved amount as standard portable models.

What happens if I stop using the concentrator after renting for a few months?

If you rent and no longer need the concentrator, you can return it to the supplier and stop paying. Medicare will not charge you a penalty. However, you cannot get a refund for the months you already paid. If you purchased the concentrator, you own it and can keep it, sell it, or donate it; Medicare does not require you to return it.

Can I switch from renting to buying in the middle of my rental period?

Yes. You can purchase the concentrator at any time during or after your rental period. If you purchase before 36 months, Medicare will pay 80 percent of the approved purchase price. The rental payments you already made do not count toward the purchase price — they are separate transactions. Some suppliers will credit part of your rental payments toward a purchase, but this is a supplier choice, not a Medicare rule.

What if my supplier charges more than Medicare's approved amount?

You are responsible only for your 20 percent coinsurance of the approved amount, not the difference between the approved amount and the supplier's charge. The supplier must write off the difference. If a supplier tries to bill you for the difference, contact Medicare at 1-800-MEDICARE to report it. This is called balance billing and is not allowed for Medicare-enrolled suppliers.

Does Medicare cover replacement parts or repairs?

If you rent, the supplier is responsible for repairs and maintenance at no cost to you. If you purchase, Medicare does not cover repairs or replacement parts. You would pay out of pocket for any repairs after the manufacturer's warranty expires. Some suppliers offer extended warranties or service plans for an additional fee.