CMS Pub. 100-04, ch. 36, § 40.5.1

The following rules apply when the beneficiary switches from one supplier of oxygen and

oxygen equipment to another supplier after the beginning of each round of competitive bidding:

Noncontract supplier to contract supplier

In general, monthly payment amounts may not exceed a period of continuous use of longer than

36 months. However, if the beneficiary switches from a noncontract supplier to a contract

supplier before the end of the 36-month period, at least 10 monthly payment amounts would be

made to a contract supplier that begins furnishing oxygen and oxygen equipment in these

situations provided that medical necessity for oxygen continues.

For example, if a contract supplier begins furnishing oxygen equipment to a beneficiary in

months 2 through 26, payment would be made for the remaining number of months in the 36-month period, because the number of payments to the contract supplier would be at least 10

payments. To provide a more specific example, a contract supplier that begins furnishing

oxygen equipment beginning with the 20th month of continuous use would receive 17 payments

(17 for the remaining number of months in the 36-month period). However, if a contract

supplier begins furnishing oxygen equipment to a beneficiary in month 27 or later, no more than

10 monthly payments would be made assuming the oxygen equipment remains medically

necessary.

Contract supplier to another contract supplier

This rule does not apply when a beneficiary switches from a contract supplier to another contract

supplier to receive his/her oxygen and oxygen equipment. In this scenario, the new contract

supplier is paid based on the single payment amount for the remaining number of months in the

36-month period assuming the oxygen equipment remains medically necessary.

Grandfathered item where there was a noncontract to contract supplier switch in a prior

round

This rule does not apply to grandfathered items in subsequent competitive bidding rounds when

there was a previous noncontract to contract supplier switch in the prior round and the same

supplier has elected to continue furnishing the oxygen equipment. In this case, the

grandfathered supplier would be eligible to continue billing for the remaining number payments

left in the oxygen rental period at the start of the competitive bidding round. The maximum

number of monthly rental payments may not exceed 45 rental payments.