Key facts for NCD 240.2.1
- Benefit category
- Durable Medical Equipment
- Effective date
- 03/20/2006
- Implemented 10/03/2006
- Transmittal
- Transmittal 57
- Versions published
- 1
- Manual chapter
- 240
- NCD Manual (Pub. 100-03)
TL;DR
NCD 240.2.1 sets Medicare's national policy for home use of oxygen in approved clinical trials under the benefit category "Durable Medical Equipment", effective 03/20/2006 and implemented 10/03/2006. Effective for services performed on or after March 20, 2006 the home use of oxygen is covered for those beneficiaries with arterial oxygen partial pressure measurements from 56 to 65 mmHg or oxygen saturation at or above 89% who are enrolled subjects in… It has been revised once since publication and binds every Medicare Administrative Contractor nationally.
Item or service described
A. General
Oxygen is a colorless, odorless gas that comprises 21 percent of the atmospheric gases at sea level. Historically, long term supplemental oxygen has been administered in higher than atmospheric concentrations to patients with chronic hypoxemia, generally resulting from cardiac and/or pulmonary disease. The need for supplemental oxygen is assessed by direct or indirect measurement of the partial pressure of oxygen (conventionally expressed in millimeters of mercury, mmHg) and the oxygen saturation of hemoglobin in arterial blood (expressed as a percent). Chronic oxygen therapy is generally administered via nasal cannulae, face mask, or tracheostomy, from a stationary or portable oxygen tank or an oxygen concentrator.
The medical literature documents health benefits as well as serious adverse events associated with supplemental oxygen use. In this light, it is clear that the decision to initiate, continue, or discontinue the use of supplemental oxygen should be guided by high quality scientific evidence.
Indications and limitations of coverage
B. Nationally Covered Indications
Effective for services performed on or after March 20, 2006 the home use of oxygen is covered for those beneficiaries with arterial oxygen partial pressure measurements from 56 to 65 mmHg or oxygen saturation at or above 89% who are enrolled subjects in clinical trials approved by the Centers for Medicare & Medicaid Services and sponsored by the National Heart, Lung & Blood Institute (NHLBI).
C. Nationally Non-Covered Indications
N/A
D. Other
This policy does not alter Medicare coverage for items and service that may be covered or non-covered according to the existing national coverage determination for the home use of oxygen provided outside the context of approved clinical trials (National Coverage Determination Manual, section 240.2 and 310.1 ).
(This NCD was last reviewed April 2006)
Text reproduced from the CMS Medicare Coverage Database record for NCD 240.2.1 version 1. View the original on cms.gov.
Revision history
05/2006 - CMS will cover the home use of oxygen in clinical trials identified by CMS and sponsored by the National Heart, Lung, & Blood Institute. Effective date: 03/20/2006. Implementation date: 10/03/2006. ( TN 57 ) (CR4389)
How this NCD shows up on remittances
A service denied under a National Coverage Determination returns CARC 50 (not deemed medically necessary) with remark N386 (decision based on an NCD); a denial citing a local policy instead carries N115. Because NCDs bind nationally, the appeal path is documentation that the patient meets the indications above, not a contractor-policy argument.
How QuickIntell applies NCD 240.2.1
QuickAuth checks the ordered service and diagnosis against NCD and LCD criteria before the encounter, QuickCode validates the diagnosis pairing on the claim, and QuickRCM routes CARC 50 denials with the policy text and the covered-code list attached so the appeal starts with evidence.
Frequently asked questions — NCD 240.2.1
What does NCD 240.2.1 cover?
Effective for services performed on or after March 20, 2006 the home use of oxygen is covered for those beneficiaries with arterial oxygen partial pressure measurements from 56 to 65 mmHg or oxygen saturation at or above 89% who are enrolled subjects in clinical trials approved by the Centers for Medicare & Medicaid Services and sponsored by the National Heart, Lung & Blood Institute (NHLBI). The full indications and limitations are reproduced on this page from the CMS Medicare Coverage Database.
When did NCD 240.2.1 take effect?
The current version (1) is effective 03/20/2006, implemented 10/03/2006, published in transmittal 57. This is the only published version.
Does a Local Coverage Determination override NCD 240.2.1?
No. A National Coverage Determination binds all Medicare Administrative Contractors; an LCD can only address services or circumstances the NCD leaves open. Claims denied under this NCD typically return CARC 50 with remark N386 (NCD) rather than N115 (LCD).
Sources
Every figure on this page is taken from the CMS publications below, as released by the Centers for Medicare & Medicaid Services. Projection built 2026-10-02. Verify against the primary file before billing or contracting decisions.
- Medicare Coverage Database NCDs via the CMS Coverage APIVersion API snapshot 2026-09-27 · effective 2026-09-20 · file national-coverage-ncd.jsonSHA-256 a90fadfd264b9ef4…
Disclaimer
This page reproduces the CMS National Coverage Determination text and, for laboratory NCDs, the CMS ICD-10 edit lists, as an operational reference. Coverage decisions depend on the full policy, the claim and the contractor; nothing here is legal, clinical or billing advice. CPT codes are shown as numbers only; CPT descriptors are copyright AMA.