On April 1, 2024, the DME MACs revised the oxygen policy article, adding five diagnosis codes that do not support medical necessity when linked with Group III claims using the N3 modifier. I do not agree with the rationale for the change.

Next Episode: Thursday, June 20, 2024

The modification to the oxygen policy article stipulates the existence of certain diagnoses explicitly undermine medical necessity for Group III coverage. Those diagnoses include:

  • Derivatives of hypoxemia,
  • Acute and chronic respiratory failure with hypoxia, and
  • Respiratory failure with unspecified hypoxia.

The logic for excluding these diagnoses seems rooted in a Group III coverage criteria statement in the Oxygen LCD that requires an “absence of hypoxemia defined in Group I and Group II.” I suspect the DME MACs believe Group III is primarily for patients with cluster headaches and other conditions that are unrelated to oxygen deprivation. Through this lens, it negates any expansion of coverage for oxygen-deprived patients that need therapy but do not have a qualifying test result to qualify for Groups I or II.

I disagree.

Instead, I interpret the LCD condition criteria statement to mean there is no overlap between oxygen deprivation qualifications for any of the coverage groups. Said a different way, I think it explicitly means Group III applies to all patients that need oxygen but do not necessarily satisfy the testing parameters or co-morbidities defined for Groups I or II.

Take, for example, a patient with an oxygen saturation of 92 percent while using oxygen set to 4 liters per minute. We can reasonably assume the patient’s SAT would be significantly lower without the oxygen, but removing oxygen for test purposes would unnecessarily strain the patient. The patient clearly benefits from oxygen therapy but does not meet the Groups I or II coverage criteria without a lower test result. I believe this patient could meet the criteria for Group III coverage set forth in the NCD and LCD.

We at MiraVista are going to continue our active dialogue with the medical directors on this issue. In the meantime, I recommend you appeal denials related to these excluded diagnoses with medical records documenting the signs and symptoms of oxygen deprivation that would favorably respond to oxygen therapy. Such denials should be reversed with proper evidence.