CMS Pub. 100-04, ch. 36, § 50.8

Noncontract suppliers of oxygen and oxygen equipment may elect to become “grandfathered

suppliers” and continue furnishing these items and services to beneficiaries after the start of the

DMEPOS Competitive Bidding Program, if the beneficiary agrees to the arrangement. This

grandfathering process only applies to suppliers that began furnishing oxygen and oxygen

equipment to beneficiaries in a CBA prior to the implementation of the competitive bidding

program for that area and choose to continue to furnish the grandfathered oxygen and oxygen

equipment to these same beneficiaries in the CBA after the start of the DMEPOS Competitive

Bidding Program. See §20.6 for additional information on payments to noncontract suppliers.

If a noncontract supplier does not want to continue furnishing oxygen and oxygen equipment to

its existing customers/beneficiaries, the beneficiaries must use a contract supplier to obtain the

oxygen and oxygen equipment. Ordinarily, the title to the oxygen equipment would transfer to

the beneficiary after rental payments have been made for 36 months of continuous use.

However, Medicare allows for a minimum of 10 months of payments to be made to a contract

supplier for oxygen and oxygen equipment furnished to a beneficiary who changes suppliers

under the DMEPOS Competitive Bidding Program because the current supplier chose not to

become a grandfathered supplier. Therefore, under the DMEPOS Competitive Bidding Program,

up to 45 continuous payments could be made for the oxygen and oxygen equipment. The

beneficiary is liable for co-payments for all paid oxygen and oxygen equipment claims.