---
kind: "range"
citation: "42 C.F.R. §§ 414.220–414.232"
title: "42"
from: "414.220"
to: "414.232"
count: 8
url: "https://uscodex.org/cfr/42/414.220..414.232"
---

# §414.220. Inexpensive or routinely purchased items.

- (a) **Definitions.**
  - (1) Inexpensive equipment means equipment the average purchase price of which did not exceed $150 during the period July 1986 through June 1987.
  - (2) Routinely purchased equipment means equipment that was acquired by purchase on a national basis at least 75 percent of the time during the period July 1986 through June 1987.
  - (3) **Accessories.** Effective January 1, 1994, accessories used in conjunction with a nebulizer, aspirator, or ventilator excluded from [§ 414.222](/cfr/42/414.222.md) meet the definitions of “inexpensive equipment” and “routinely purchased equipment” in paragraphs [(a)(1)](#a-1) and [(a)(2)](#a-2) of this section, respectively.
- (b) **Payment rules.**
  - (1) Subject to the limitation in [paragraph (b)(3)](#b-3) of this section, payment for inexpensive and routinely purchased items is made on a rental basis or in a lump sum amount for purchase of the item based on the applicable fee schedule amount.
  - (2) Effective January 1, 1994, payment for ostomy supplies, tracheostomy supplies, urologicals, and surgical dressings not furnished as incident to a physician's professional service or furnished by an HHA is made using the methodology for the inexpensive and routinely purchased class.
  - (3) The total amount of payments made for an item may not exceed the fee schedule amount recognized for the purchase of that item.
- (c) **Fee schedule amount for 1989 and 1990.** The fee schedule amount for payment of purchase or rental of inexpensive or routinely purchased items furnished in 1989 and 1990 is the local payment amount determined as follows:
  - (1) The carrier determines the average reasonable charge for inexpensive or routinely purchased items that were furnished during the period July 1, 1986 through June 30, 1987 based on the mean of the carrier's allowed charges for the item. A separate determination of an average reasonable charge is made for rental equipment, new purchased equipment, and used purchased equipment.
  - (2) The carrier adjusts the amount determined under [paragraph (c)(1)](#c-1) of this section by the change in the level of the CPI-U for the 6-month period ending December 1987.
- (d) **Updating the local payment amounts for years after 1990.** For each year subsequent to 1990, the local payment amounts of the preceding year are increased or decreased by the covered item update. For 1991 and 1992, the covered item update is reduced by 1 percentage point.
- (e) **Calculating the fee schedule amounts for years after 1990.** For years after 1990, the fee schedule amounts are equal to the national limited payment amount.
- (f) **Calculating the national limited payment amount.** The national limited payment amount is computed as follows:
  - (1) **The 1991 national limited payment amount is equal to—**
    - (i) 100 percent of the local payment amount if the local payment amount is neither greater than the weighted average nor less than 85 percent of the weighted average of all local payment amounts;
    - (ii) The sum of 67 percent of the local payment amount plus 33 percent of the weighted average of all local payment amounts if the local payment amount exceeds the weighted average of all local payment amounts; or
    - (iii) The sum of 67 percent of the local payment amount plus 33 percent of 85 percent of the weighted average of all local payment amounts if the local payment amount is less than 85 percent of the weighted average of all local payment amounts.
  - (2) **The 1992 national limited payment amount is equal to—**
    - (i) 100 percent of the local payment amount if the local payment amount is neither greater than the weighted average nor less than 85 percent of the weighted average of all local payment amounts;
    - (ii) The sum of 33 percent of the local payment amount plus 67 percent of the weighted average of all local payment amounts if the local payment amount exceeds the weighted average; or
    - (iii) The sum of 33 percent of the local payment amount plus 67 percent of 85 percent of the weighted average of all local payment amounts if the local payment amount is less than 85 percent of the weighted average.
  - (3) **For 1993, the national limited payment amount is equal to one of the following—**
    - (i) 100 percent of the local payment amount if the local payment amount is neither greater than the weighted average nor less than 85 percent of the weighted average of all local payment amounts.
    - (ii) 100 percent of the weighted average of all local payment amounts if the local payment amount exceeds the weighted average of all local payment amounts.
    - (iii) 85 percent of the weighted average of all local payment amounts if the local payment amount is less than 85 percent of the weighted average of all local payment amounts.
  - (4) **For 1994 and subsequent years, the national limited payment amount is equal to one of the following—**
    - (i) If the local payment amount is not in excess of the median, nor less than 85 percent of the median, of all local payment amounts—100 percent of the local payment amount.
    - (ii) If the local payment amount exceeds the median—100 percent of the median of all local payment amounts.
    - (iii) If the local payment amount is less than 85 percent of the median—85 percent of the median of all local payment amounts.
- (g) **Payment for surgical dressings.** For surgical dressings furnished after December 31, 1993, the national limited payment amount is computed based on local payment amounts using average reasonable charges for the 12-month period ending December 31, 1992, increased by the covered item updates for 1993 and 1994.

# §414.222. Items requiring frequent and substantial servicing.

- (a) **Definition.** Items requiring frequent and substantial servicing in order to avoid risk to the beneficiary's health are the following:
  - (1) Ventilators (except those that are either continuous airway pressure devices or respiratory assist devices with bi-level pressure capability with or without a backup rate, previously referred to as “intermittent assist devices with continuous airway pressure devices”).
  - (2) **Continuous and intermittent positive pressure breathing machines.**
  - (3) **Continuous passive motion machines.**
  - (4) **Other items specified in CMS program instructions.**
  - (5) **Other items identified by the carrier.**
- (b) **Payment rule.** Rental payments for items requiring frequent and substantial servicing are made on a monthly basis, and continue until medical necessity ends.
- (c) **Fee schedule amount for 1989 and 1990.** The fee schedule amount for items requiring frequent and substantial servicing is the local payment amount determined as follows:
  - (1) The carrier determines the average reasonable charge for rental of items requiring frequent and substantial servicing that were furnished during the period July 1, 1986 through June 30, 1987 based on the mean of the carrier's allowed charges for the item.
  - (2) The carrier adjusts the amounts determined under [paragraph (c)(1)](#c-1) of this section by the change in the level of the CPI-U for the 6-month period ending December 1987.
- (d) **Updating the fee schedule amounts for years after 1990.** For years after 1990, the fee schedules are determined using the methodology contained in paragraphs [(d)](/cfr/42/414.220.md?p=d), [(e)](/cfr/42/414.220.md?p=e), and [(f)](/cfr/42/414.220.md?p=f) of § 414.220.
- (e) **Transition to other payment classes.** For purposes of calculating the 15-month rental period, beginning January 1, 1994, if an item has been paid for under the frequent and substantial servicing class and is subsequently paid for under another payment class, the rental period begins with the first month of continuous rental, even if that period began before January 1, 1994. For example, if the rental period began on July 1, 1993, the carrier must use this date as beginning the first month of rental. Likewise, for purposes of calculating the 10-month purchase option, the rental period begins with the first month of continuous rental without regard to when that period started. For example, if the rental period began in August 1993, the 10-month purchase option must be offered to the beneficiary in May 1994, the tenth month of continuous rental.
- (f) **Multi-function ventilators—**
  - (1) **Definition.** For the purpose of this [paragraph (f)](#f), a multi-function ventilator is a ventilator as defined in [paragraph (a)(1)](#a-1) of this section that also performs medically necessary functions for the patient at the same time that would otherwise be performed by one or more different items classified under [§ 414.220](/cfr/42/414.220.md), [§ 414.226](/cfr/42/414.226.md), or [§ 414.229](/cfr/42/414.229.md).
  - (2) **Payment rule.** Effective for dates of service on or after January 1, 2019, the monthly rental fee schedule amount for a multi-function ventilator described in [paragraph (f)(1)](#f-1) of this section is equal to the monthly rental fee schedule amount for the ventilator established in [paragraph (c)](#c) and [paragraph (d)](#d) of this section plus the average of the lowest monthly cost for one additional function determined under [paragraph (f)(3)](#f-3) of this section and the monthly cost of all additional functions determined under [paragraph (f)(3)](#f-3) of this section, increased by the annual covered item updates of [section 1834(a)(14)](/cfr/42/1834.md?p=a-14) of the Act.
  - (3) **Monthly cost for additional functions.**
    - (i) For functions performed by items classified under this section prior to 1994, the monthly cost is equal to the monthly rental fee schedule amount established in paragraphs [(c)](#c) and [(d)](#d) of this section increased by the covered item update of [section 1834(a)(14)](/cfr/42/1834.md?p=a-14) of the Act.
    - (ii) For functions performed by items classified under [§ 414.220](/cfr/42/414.220.md), the monthly cost is equal to the fee schedule amount for purchased equipment established in § [414.220(c)](/cfr/42/414.220.md?p=c), [(d)](/cfr/42/414.220.md?p=d), [(e)](/cfr/42/414.220.md?p=e), and [(f)](/cfr/42/414.220.md?p=f), adjusted in accordance with [§ 414.210(g)](/cfr/42/414.210.md?p=g), divided by 60 months or total number of months of the reasonable useful lifetime of the equipment.
    - (iii) For functions performed by items classified under [§ 414.226](/cfr/42/414.226.md), the monthly cost is equal to the monthly payment amount established in § [414.226(e)](/cfr/42/414.226.md?p=e) and [(f)](/cfr/42/414.226.md?p=f), adjusted in accordance with [§ 414.210(g)](/cfr/42/414.210.md?p=g), multiplied by 36 and divided by 60 months or total number of months of the reasonable useful lifetime of the oxygen equipment.
    - (iv) For functions performed by items classified under [§ 414.229](/cfr/42/414.229.md), the monthly cost is equal to the purchase price established in [§ 414.229(c)](/cfr/42/414.229.md?p=c), adjusted in accordance with [§ 414.210(g)](/cfr/42/414.210.md?p=g), divided by 60 months or total number of months of the reasonable useful lifetime of the equipment.

# §414.224. Customized items.

- (a) **Criteria for a customized item.** To be considered a customized item for payment purposes under [paragraph (b)](#b) of this section, a covered item (including a wheelchair) must be uniquely constructed or substantially modified for a specific beneficiary according to the description and orders of a physician and be so different from another item used for the same purpose that the two items cannot be grouped together for pricing purposes.
- (b) **Payment rule.** Payment is made on a lump sum basis for the purchase of a customized item based on the carrier's individual consideration and judgment of a reasonable payment amount for each customized item. The carrier's individual consideration takes into account written documentation on the costs of the item including at least the cost of labor and materials used in customizing an item.

# §414.226. Oxygen and oxygen equipment.

- (a) **Payment rules—**
  - (1) **Oxygen equipment.** Payment for rental of oxygen equipment is made based on a monthly fee schedule amount during the period of medical need, but for no longer than a period of continuous use of 36 months. A period of continuous use is determined under the provisions in [§ 414.230](/cfr/42/414.230.md).
  - (2) **Oxygen contents.** Payment for purchase of oxygen contents is made based on a monthly fee schedule amount until medical necessity ends.
- (b) **Monthly fee schedule amount for items furnished prior to 2007.**
  - (1) **Monthly fee schedule amounts are separately calculated for the following items—**
    - (i) **Stationary oxygen equipment and oxygen contents (stationary and portable oxygen contents).**
    - (ii) **Portable oxygen equipment only.**
    - (iii) **Stationary and portable oxygen contents only.**
    - (iv) **Portable oxygen contents only.**
  - (2) For 1989 and 1990, the monthly fee schedule amounts are the local payment amounts determined as follows:
    - (i) The carrier determines the base local average monthly payment rate equal to the total reasonable charges for the item for the 12-month period ending December 1986 divided by the total number of months for all beneficiaries receiving the item for the same period. In determining the local average monthly payment rate, the following limitations apply:
      - (A) Purchase charges for oxygen systems are not included as items classified under [paragraph (b)(1)(i)](#b-1-i) of this section.
      - (B) Purchase charges for portable equipment are not included as items classified under [paragraph (b)(1)(ii)](#b-1-ii) of this section.
    - (ii) The carrier determines the local monthly payment amount equal to 0.95 times the base local average monthly payment amount adjusted by the change in the CPI-U for the six-month period ending December 1987.
  - (3) For 1991 through 2006, the fee schedule amounts for items described in paragraphs [(b)(1)(iii)](#b-1-iii) and [(iv)](#b-1-iv) of this section are determined using the methodology contained in § [414.220(d)](/cfr/42/414.220.md?p=d), [(e)](/cfr/42/414.220.md?p=e), and [(f)](/cfr/42/414.220.md?p=f).
  - (4) For 1991 through 2006, the fee schedule amounts for items described in paragraphs [(b)(1)(i)](#b-1-i) and [(ii)](#b-1-ii) of this section are determined using the methodology contained in § [414.220(d)](/cfr/42/414.220.md?p=d), [(e)](/cfr/42/414.220.md?p=e), and [(f)](/cfr/42/414.220.md?p=f).
  - (5) For 2005 and 2006, the fee schedule amounts determined under [paragraph (b)(4)](#b-4) of this section are reduced using the methodology described in [section 1834(a)(21)(A)](/cfr/42/1834.md?p=a-21-A) of the Act.
- (c) **Monthly fee schedule amount for items furnished from 2007 through 2018.**
  - (1) For 2007, national limited monthly payment rates are calculated and paid as the monthly fee schedule amounts for the following classes of items:
    - (i) Stationary oxygen equipment (including stationary concentrators) and oxygen contents (stationary and portable).
    - (ii) **Portable equipment only (gaseous or liquid tanks).**
    - (iii) **Oxygen generating portable equipment only.**
    - (iv) **Stationary oxygen contents only.**
    - (v) **Portable oxygen contents only.**
  - (2) The national limited monthly payment rate for items described in [paragraph (c)(1)(i)](#c-1-i) of this section is equal to the weighted average fee schedule amount established under [paragraph (b)(5)](#b-5) of this section reduced by $1.44.
  - (3) The national limited monthly payment rate for items described in [paragraph (c)(1)(ii)](#c-1-ii) of this section is equal to the weighted average of the fee schedule amounts established under [paragraph (b)(5)](#b-5) of this section.
  - (4) The national limited monthly payment rate for items described in [paragraph (c)(1)(iii)](#c-1-iii) of this section is equal to the national limited monthly payment rate established under [paragraph (c)(5)](#c-5) of this section, multiplied by 24, and divided by 36.
  - (5) The national limited monthly payment rate for items described in paragraphs [(c)(1)(iv)](#c-1-iv) and [(c)(1)(v)](#c-1-v) of this section is equal to 50 percent of the weighted average fee schedule amounts established under [paragraph (b)(3)](#b-3) of this section for items described in [paragraph (b)(1)(iii)](#b-1-iii) of this section.
  - (6) For 2008 through 2018, CMS makes an annual adjustment to the national limited monthly payment rate for items described in [paragraph (c)(1)(i)](#c-1-i) of this section to ensure that such payment rates do not result in expenditures for any year that are more or less than the expenditures that would have been made if such classes had not been established.
- (d) **Application of monthly fee schedule amounts for items furnished from 2007 through 2018.**
  - (1) The fee schedule amount for items described in [paragraph (c)(1)(i)](#c-1-i) of this section is paid when the beneficiary rents stationary oxygen equipment.
  - (2) Subject to the limitation set forth in [paragraph (g)(2)](#g-2) of this section, the fee schedule amount for items described in paragraphs [(c)(1)(ii)](#c-1-ii) and [(c)(1)(iii)](#c-1-iii) of this section is paid when the beneficiary rents portable oxygen equipment.
  - (3) The fee schedule amount for items described in [paragraph (c)(1)(iv)](#c-1-iv) of this section is paid when the beneficiary—
    - (i) Owns stationary oxygen equipment that requires delivery of gaseous or liquid oxygen contents; or
    - (ii) Rents stationary oxygen equipment that requires delivery of gaseous or liquid oxygen contents after the period of continuous use of 36 months described in [paragraph (a)(1)](#a-1) of this section.
  - (4) The fee schedule amount for items described in [paragraph (c)(1)(v)](#c-1-v) of this section is paid when the beneficiary—
    - (i) Owns portable oxygen equipment described in (c)(1)(ii) of this section;
    - (ii) Rents portable oxygen equipment described in [paragraph (c)(1)(ii)](#c-1-ii) of this section during the period of continuous use of 36 months described in [paragraph (a)(1)](#a-1) of this section and does not rent stationary oxygen equipment; or
    - (iii) Rents portable oxygen equipment described in [paragraph (c)(1)(ii)](#c-1-ii) of this section after the period of continuous use of 36 months described in [paragraph (a)(1)](#a-1) of this section.
- (e) **Monthly fee schedule amount for items furnished for years after 2018.**
  - (1) For 2019, national limited monthly payment rates are calculated and paid as the monthly fee schedule amounts for the following classes of items:
    - (i) Stationary oxygen equipment (including stationary concentrators) and oxygen contents (stationary and portable).
    - (ii) **Portable gaseous equipment only.**
    - (iii) **Portable liquid equipment only.**
    - (iv) **Oxygen generating portable equipment only.**
    - (v) **Stationary oxygen contents only.**
    - (vi) Portable oxygen contents only, except for portable liquid oxygen contents for prescribed flow rates greater than four liters per minute.
    - (vii) **Portable liquid oxygen contents only for prescribed flow rates of more than 4 liters per minute.**
  - (2) The monthly payment rate for items described in paragraphs [(e)(1)(i)](#e-1-i), [(ii)](#e-1-ii), [(iv)](#e-1-iv), [(v)](#e-1-v), and [(vi)](#e-1-vi) of this section are determined using the applicable methodologies contained in [§ 414.210(g)](/cfr/42/414.210.md?p=g).
  - (3) The monthly payment rate for items described in [paragraph (e)(1)(iii)](#e-1-iii) of this section is determined initially based on the monthly payment rate for items described in [paragraph (e)(1)(iv)](#e-1-iv) of this section and is subsequently adjusted using the applicable methodologies contained in [§ 414.210(g)](/cfr/42/414.210.md?p=g).
  - (4) The monthly payment rate for items described in [paragraph (e)(1)(vii)](#e-1-vii) of this section is determined initially based on 150 percent of the monthly payment rate for items described in [paragraph (e)(1)(vi)](#e-1-vi) of this section and is subsequently adjusted using the applicable methodologies contained in [§ 414.210(g)](/cfr/42/414.210.md?p=g).
  - (5) Beginning in 2019, CMS makes an annual adjustment to the monthly payment rate for items described in [paragraphs (e)(1)(i) through (e)(1)(vii)](#e-1-i..e-1-vii) of this section to ensure that such payment rates do not result in expenditures for any year that are more or less than the expenditures that would have been made if such classes had not been established.
- (f) **Application of monthly fee schedule amounts for items furnished for years after 2018.**
  - (1) The fee schedule amount for items described in [paragraph (e)(1)(i)](#e-1-i) of this section is paid when the beneficiary rents stationary oxygen equipment.
  - (2) Subject to the limitation set forth in [paragraph (g)(2)](#g-2) of this section, the fee schedule amount for items described in paragraphs [(e)(1)(ii)](#e-1-ii), [(iii)](#e-1-iii), and [(iv)](#e-1-iv) of this section is paid when the beneficiary rents portable oxygen equipment.
  - (3) The fee schedule amount for items described in [paragraph (e)(1)(v)](#e-1-v) of this section is paid when the beneficiary—
    - (i) Owns stationary oxygen equipment that requires delivery of gaseous or liquid oxygen contents; or
    - (ii) Rents stationary oxygen equipment that requires delivery of gaseous or liquid oxygen contents after the period of continuous use of 36 months described in [paragraph (a)(1)](#a-1) of this section.
  - (4) The fee schedule amount for items described in [paragraph (e)(1)(vi)](#e-1-vi) of this section is paid when the beneficiary—
    - (i) Owns portable oxygen equipment described in paragraphs [(e)(1)(ii)](#e-1-ii) or [(e)(1)(iii)](#e-1-iii) of this section; or Code of Federal Regulations/[Title 42](/cfr/42.md)—Public Health/Vol. 3/2017-10-0166
    - (ii) Rents portable oxygen equipment described in paragraphs [(e)(1)(ii)](#e-1-ii) or [(e)(1)(iii)](#e-1-iii) of this section during the period of continuous use of 36 months described in [paragraph (a)(1)](#a-1) of this section and does not rent stationary oxygen equipment; or
    - (iii) Rents portable oxygen equipment described in paragraphs [(e)(1)(ii)](#e-1-ii) or [(e)(1)(iii)](#e-1-iii) of this section after the period of continuous use of 36 months described in [paragraph (a)(1)](#a-1) of this section.
  - (5) The fee schedule amount for items described in [paragraph (e)(1)(vii)](#e-1-vii) of this section is paid when the beneficiary has a prescribed flow rate of more than 4 liters per minute and—
    - (i) Owns portable liquid oxygen equipment described in [paragraph (e)(1)(iii)](#e-1-iii) of this section; or Code of Federal Regulations/[Title 42](/cfr/42.md)—Public Health/Vol. 3/2017-10-0166
    - (ii) Rents portable liquid oxygen equipment described in [paragraph (e)(1)(iii)](#e-1-iii) of this section during the period of continuous use of 36 months described in [paragraph (a)(1)](#a-1) of this section and does not rent stationary oxygen equipment; or
    - (iii) Rents portable liquid oxygen equipment described in [paragraph (e)(1)(iii)](#e-1-iii) of this section after the period of continuous use of 36 months described in [paragraph (a)(1)](#a-1) of this section.
- (g) **Volume adjustments.**
  - (1) The fee schedule amount for an item described in [paragraph (c)(1)(i)](#c-1-i) of this section is adjusted as follows:
    - (i) If the attending physician prescribes an oxygen flow rate exceeding four liters per minute, the fee schedule amount is increased by 50 percent, subject to the limit in [paragraph (g)(2)](#g-2) of this section.
    - (ii) If the attending physician prescribes an oxygen flow rate of less than one liter per minute, the fee schedule amount is decreased by 50 percent.
  - (2) If portable oxygen equipment is used and the prescribed oxygen flow rate exceeds four liters per minute, the total fee schedule amount recognized for payment is limited to the higher of—
    - (i) The sum of the monthly fee schedule amount for the items described in paragraphs [(c)(1)(i)](#c-1-i) and [(c)(1)(ii)](#c-1-ii) or [(c)(1)(iii)](#c-1-iii) of this section; or
    - (ii) **The adjusted fee schedule amount described in paragraph (g)(1)(i) of this section.**
  - (3) In establishing the volume adjustment for those beneficiaries whose physicians prescribe varying flow rates, the following rules apply:
    - (i) If the prescribed flow rate is different for stationary oxygen equipment than for portable oxygen equipment, the flow rate for the stationary equipment is used.
    - (ii) If the prescribed flow rate is different for the patient at rest than for the patient at exercise, the flow rate for the patient at rest is used.
    - (iii) If the prescribed flow rate is different for nighttime use and daytime use, the average of the two flow rates is used.
- (h) **Furnishing oxygen and oxygen equipment after the 36-month rental cap.**
  - (1) The supplier that furnishes oxygen equipment for the 36th continuous month during which payment is made under this section must—
    - (i) Continue to furnish the equipment during any period of medical need for the remainder of the reasonable useful lifetime established for the equipment in accordance with [§ 414.210(f)(1)](/cfr/42/414.210.md?p=f-1); or
    - (ii) Arrange for furnishing the oxygen equipment with another supplier if the beneficiary relocates to an area that is outside the normal service area of the supplier that initially furnished the equipment.
  - (2) The supplier that furnishes liquid or gaseous oxygen equipment (stationary or portable) for the 36th continuous month during which payment is made under this section must—
    - (i) Continue to furnish the oxygen contents necessary for the effective use of the liquid or gaseous equipment during any period of medical need for the remainder of the reasonable useful lifetime established for the equipment in accordance with [§ 414.210(f)(1)](/cfr/42/414.210.md?p=f-1); or
    - (ii) Arrange for furnishing the oxygen contents with another supplier if the beneficiary relocates to an area that is outside the normal service area of the supplier that initially furnished the equipment.
    - (i) **Additional supplier requirements for rentals that begin on or after January 1, 2007.**
  - (1) The supplier that furnishes oxygen equipment for the first month during which payment is made under this section must continue to furnish the equipment for the entire 36-month period of continuous use, unless medical necessity ends or—
    - (i) The item becomes subject to a competitive acquisition program implemented in accordance with section 1847(a) of the Act;
    - (ii) The beneficiary relocates to an area that is outside the normal service area of the supplier that initially furnished the equipment;
    - (iii) The beneficiary elects to obtain oxygen equipment from a different supplier prior to the expiration of the 36-month rental period; or
    - (iv) CMS or the carrier determines that an exception should apply in an individual case based on the circumstances.
  - (2) Oxygen equipment furnished under this section may not be replaced by the supplier prior to the expiration of the reasonable useful lifetime established for the equipment in accordance with [§ 414.210(f)(1)](/cfr/42/414.210.md?p=f-1) unless:
    - (i) The supplier replaces an item with the same, or equivalent, make and model of equipment because the item initially furnished was lost, stolen, irreparably damaged, is being repaired, or no longer functions;
    - (ii) **A physician orders different equipment for the beneficiary.** If the order is based on medical necessity, then the order must indicate why the equipment initially furnished is no longer medically necessary and the supplier must retain this order in the beneficiary's medical record;
    - (iii) The beneficiary chooses to obtain a newer technology item or upgraded item and signs an advanced beneficiary notice (ABN); or
    - (iv) **CMS or the carrier determines that a change in equipment is warranted.**
  - (3) Before furnishing oxygen equipment, the supplier must disclose to the beneficiary its intentions regarding whether it will accept assignment of all monthly rental claims for the duration of the rental period. A supplier's intentions could be expressed in the form of a written agreement between the supplier and the beneficiary.

# §414.228. Prosthetic and orthotic devices.

- (a) **Payment rule.** Payment is made on a lump-sum basis for prosthetic and orthotic devices subject to this subpart.
- (b) **Fee schedule amounts.** The fee schedule amount for prosthetic and orthotic devices is determined as follows:
  - (1) The carrier determines a base local purchase price equal to the average reasonable charge for items purchased during the period July 1, 1986 through June 30, 1987 based on the mean of the carrier's allowed charges for the item.
  - (2) **The carrier determines a local purchase price equal to the following—**
    - (i) For 1989 and 1990, the base local purchase price is adjusted by the change in the level of the CPI-U for the 6-month period ending December 1987.
    - (ii) For 1991 through 1993, the local purchase price for the preceding year is adjusted by the applicable percentage increase for the year. The applicable percentage increase is equal to 0 percent for 1991. For 1992 and 1993, the applicable percentage increase is equal to the percentage increase in the CPI-U for the 12-month period ending with June of the previous year.
    - (iii) **For 1994 and 1995, the applicable percentage increase is 0 percent.**
    - (iv) For all subsequent years the applicable percentage increase is equal to the percentage increase in the CPI-U for the 12-month period ending with June of the previous year.
  - (3) **CMS determines the regional purchase price equal to the following—**
    - (i) For 1992, the average (weighted by the relative volume of all claims among carriers) of the local purchase prices for the carriers in the region.
    - (ii) For 1993 and subsequent years, the regional purchase price for the preceding year adjusted by the applicable percentage increase for the year.
  - (4) **CMS determines a purchase price equal to the following—**
    - (i) **For 1989, 1990 and 1991, 100 percent of the local purchase price.**
    - (ii) **For 1992, 75 percent of the local purchase price plus 25 percent of the regional purchase price.**
    - (iii) **For 1993, 50 percent of the local purchase price plus 50 percent of the regional purchase price.**
    - (iv) **For 1994 and subsequent years, 100 percent of the regional purchase price.**
  - (5) For 1992 and subsequent years, CMS determines a national average purchase price equal to the unweighted average of the purchase prices determined under [paragraph (b)(4)](#b-4) of this section for all carriers.
  - (6) CMS determines the fee schedule amount equal to 100 percent of the purchase price determined under [paragraph (b)(4)](#b-4) of this section, subject to the following limitations:
    - (i) For 1992, the amount cannot be greater than 125 percent nor less than 85 percent of the national average purchase price determined under [paragraph (b)(5)](#b-5) of this section.
    - (ii) For 1993 and subsequent years, the amount cannot be greater than 120 percent of the national average nor less than 90 percent of the national average purchase price determined under [paragraph (b)(5)](#b-5) of this section.
- (c) **Payment for therapeutic shoes.** The payment rules specified in paragraphs [(a)](#a) and [(b)](#b) of this section are applicable to custom molded and extra depth shoes, modifications, and inserts (therapeutic shoes) furnished after December 31, 2004.

# §414.229. Other durable medical equipment—capped rental items.

- (a) **General payment rule.** Payment is made for other durable medical equipment that is not subject to the payment provisions set forth in [§ 414.220](/cfr/42/414.220.md) through [§ 414.228](/cfr/42/414.228.md) as follows:
  - (1) For items furnished prior to January 1, 2006, payment is made on a rental or purchase option basis in accordance with the rules set forth in [paragraphs (b) through (e)](#b..e) of this section.
  - (2) For items other than power-driven wheelchairs furnished on or after January 1, 2006, payment is made in accordance with the rules set forth in [paragraph (f)](#f) of this section.
  - (3) For power-driven wheelchairs furnished on or after January 1, 2006 through December 31, 2010, payment is made in accordance with the rules set forth in paragraphs [(f)](#f) or [(h)](#h) of this section.
  - (4) For power-driven wheelchairs that are not classified as complex rehabilitative power-driven wheelchairs, furnished on or after January 1, 2011, payment is made in accordance with the rules set forth in [paragraph (f)](#f) of this section.
  - (5) For power-driven wheelchairs classified as complex rehabilitative power-driven wheelchairs, furnished on or after January 1, 2011, payment is made in accordance with the rules set forth in paragraphs [(f)](#f) or [(h)](#h) of this section.
- (b) **Fee schedule amounts for rental.**
  - (1) For 1989 and 1990, the monthly fee schedule amount for rental of other covered durable medical equipment equals 10 percent of the purchase price recognized as determined under [paragraph (c)](#c) of this section subject to the following limitation: For 1989 and 1990, the fee schedule amount cannot be greater than 115 percent nor less than 85 percent of the prevailing charge, as determined under [§ 405.504](/cfr/42/405.504.md) of this chapter, established for rental of the item in January 1987, as adjusted by the change in the level of the CPI-U for the 6-month period ending December 1987.
  - (2) For 1991 and subsequent years, the monthly fee schedule amount for rental of other covered durable medical equipment equals 10 percent of the purchase price recognized as determined under [paragraph (c)](#c) of this section for each of the first 3 months and 7.5 percent of the purchase price for each of the remaining months.
  - (3) For power-driven wheelchairs furnished on or after January 1, 2011, the monthly fee schedule amount for rental equipment equals 15 percent of the purchase price recognized as determined under [paragraph (c)](#c) of this section for each of the first 3 months and 6 percent of the purchase price for each of the remaining months.
- (c) **Determination of purchase price.** The purchase price of other covered durable medical equipment is determined as follows:
  - (1) For 1989 and 1990. (i) The carrier determines a base local purchase price amount equal to the average of the purchase prices submitted on an assignment-related basis of new items supplied during the 6-month period ending December 1986.
    - (ii) The purchase price is equal to the base local purchase price adjusted by the change in the level of the CPI-U for the 6-month period ending December 1987.
  - (2) For 1991. (i) The local payment amount is the purchase price for the preceding year adjusted by the covered item update for 1991 and decreased by the percentage by which the average of the reasonable charges for claims paid for all other items described in § 414.229, is lower than the average of the purchase prices submitted for such items during the final 9 months of 1988.
    - (ii) The purchase price for 1991 is the national limited payment amount as determined using the methodology contained in [§ 414.220(f)](/cfr/42/414.220.md?p=f).
  - (3) **For years after 1991.** The purchase price is determined using the methodology contained in [paragraphs (d) through (f)](/cfr/42/414.220.md?p=d..f) of § 414.220.
- (d) **Purchase option.** Suppliers must offer a purchase option to beneficiaries during the 10th continuous rental month and, for power-driven wheelchairs, the purchase option must also be made available at the time the equipment is initially furnished.
  - (1) Suppliers must offer beneficiaries the option of purchasing power-driven wheelchairs at the time the supplier first furnishes the item. On or after January 1, 2011, this option is available only for complex rehabilitative power-driven wheelchairs. Payment must be on a lump-sum fee schedule purchase basis if the beneficiary chooses the purchase option. The purchase fee is the amount established in [paragraph (c)](#c) of this section.
  - (2) Suppliers must offer beneficiaries the option of converting capped rental items (including power-driven wheelchairs not purchased when initially furnished) to purchased equipment during their 10th continuous rental month. Beneficiaries have one month from the date the supplier makes the offer to accept the purchase option.
    - (i) If the beneficiary does not accept the purchase option, payment continues on a rental basis not to exceed a period of continuous use of longer than 15 months. After 15 months of rental payments have been paid, the supplier must continue to provide the item without charge, other than a charge for maintenance and servicing fees, until medical necessity ends or Medicare coverage ceases. A period of continuous use is determined under the provisions in [§ 414.230](/cfr/42/414.230.md).
    - (ii) If the beneficiary accepts the purchase option, payment continues on a rental basis not to exceed a period of continuous use of longer than 13 months. On the first day after 13 continuous rental months during which payment is made, the supplier must transfer title to the equipment to the beneficiary.
- (e) **Payment for maintenance and servicing.**
  - (1) The carrier establishes a reasonable fee for maintenance and servicing for each rented item of other durable medical equipment. The fee may not exceed 10 percent of the purchase price recognized as determined under [paragraph (c)](#c) of this section.
  - (2) Payment of the fee for maintenance and servicing of other durable medical equipment that is rented is made only for equipment that continues to be used after 15 months of rental payments have been made and is limited to the following:
    - (i) **For the first 6-month period, no payments are to be made.**
    - (ii) For each succeeding 6-month period, payment may be made during the first month of that period.
  - (3) Payment for maintenance and servicing DME purchased in accordance with paragraphs [(d)(1)](#d-1) and [(d)(2)(ii)](#d-2-ii) of this section, is made on the basis of reasonable and necessary charges.
- (f) **Rules for capped rental items furnished beginning on or after January 1, 2006.**
  - (1) For items furnished on or after January 1, 2006, payment is made based on a monthly rental fee schedule amount during the period of medical need, but for no longer than a period of continuous use of 13 months. A period of continuous use is determined under the provisions in [§ 414.230](/cfr/42/414.230.md).
  - (2) The supplier must transfer title to the item to the beneficiary on the first day that begins after the 13th continuous month in which payments are made under [paragraph (f)(1)](#f-1) of this section.
  - (3) Payment for maintenance and servicing of beneficiary-owned equipment is made in accordance with [§ 414.210(e)](/cfr/42/414.210.md?p=e).
- (g) **Additional supplier requirements for capped rental items that are furnished beginning on or after January 1, 2007.**
  - (1) The supplier that furnishes an item for the first month during which payment is made using the methodology described in [paragraph (f)(1)](#f-1) of this section must continue to furnish the equipment until medical necessity ends, or the 13-month period of continuous use ends, whichever is earlier, unless—
    - (i) The item becomes subject to a competitive acquisition program implemented in accordance with section 1847(a) of the Act;
    - (ii) The beneficiary relocates to an area that is outside the normal service area of the supplier that initially furnished the equipment;
    - (iii) The beneficiary elects to obtain the equipment from a different supplier prior to the expiration of the 13-month rental period; or
    - (iv) CMS or the carrier determines that an exception should apply in an individual case based on the circumstances.
  - (2) A capped rental item furnished under this section may not be replaced by the supplier prior to the expiration of the 13-month rental period unless:
    - (i) The supplier replaces an item with the same, or equivalent, make and model of equipment because the item initially furnished was lost, stolen, irreparably damaged, is being repaired, or no longer functions;
    - (ii) **A physician orders different equipment for the beneficiary.** If the need for different equipment is based on medical necessity, then the order must indicate why the equipment initially furnished is no longer medically necessary and the supplier must retain this order in the beneficiary's medical record;
    - (iii) The beneficiary chooses to obtain a newer technology item or upgraded item and signs an advanced beneficiary notice (ABN); or
    - (iv) **CMS or the carrier determines that a change in equipment is warranted.**
  - (3) Before furnishing a capped rental item, the supplier must disclose to the beneficiary its intentions regarding whether it will accept assignment of all monthly rental claims for the duration of the rental period. A supplier's intentions could be expressed in the form of a written agreement between the supplier and the beneficiary.
  - (4) No later than two months before the date on which the supplier must transfer title to a capped rental item to the beneficiary, the supplier must disclose to the beneficiary whether it can maintain and service the item after the beneficiary acquires title to it. CMS or its carriers may make exceptions to this requirement on a case-by-case basis.
- (h) **Purchase of power-driven wheelchairs furnished on or after January 1, 2006.**
  - (1) Suppliers must offer beneficiaries the option to purchase power-driven wheelchairs at the time the equipment is initially furnished.
  - (2) **Payment is made on a lump-sum purchase basis if the beneficiary chooses this option.**
  - (3) On or after January 1, 2011, this option is available only for complex rehabilitative power-driven wheelchairs.

# §414.230. Determining a period of continuous use.

- (a) **Scope.** This section sets forth the rules that apply in determining a period of continuous use for rental of durable medical equipment.
- (b) **Continuous use.**
  - (1) A period of continuous use begins with the first month of medical need and lasts until a beneficiary's medical need for a particular item of durable medical equipment ends.
  - (2) In the case of a beneficiary receiving oxygen equipment on December 31, 2005, the period of continuous use for the equipment begins on January 1, 2006.
- (c) **Temporary interruption.**
  - (1) **A period of continuous use allows for temporary interruptions in the use of equipment.**
  - (2) An interruption of not longer than 60 consecutive days plus the days remaining in the rental month in which use ceases is temporary, regardless of the reason for the interruption.
  - (3) Unless there is a break in medical necessity that lasts longer than 60 consecutive days plus the days remaining in the rental month in which use ceases, medical necessity is presumed to continue.
- (d) **Criteria for a new rental period.** If an interruption in the use of equipment continues for more than 60 consecutive days plus the days remaining in the rental month in which use ceases, a new rental period begins if the supplier submits all of the following information—
  - (1) **A new prescription.**
  - (2) **New medical necessity documentation.**
  - (3) A statement describing the reason for the interruption and demonstrating that medical necessity in the prior episode ended.
- (e) **Beneficiary moves.** A permanent or temporary move made by a beneficiary does not constitute an interruption in the period of continuous use.
- (f) **New equipment.**
  - (1) If a beneficiary changes equipment or requires additional equipment based on a physician's prescription, and the new or additional equipment is found to be necessary, a new period of continuous use begins for the new or additional equipment. A new period of continuous use does not begin for base equipment that is modified by an addition.
  - (2) A new period of continuous use does not begin when a beneficiary changes from one stationary oxygen equipment modality to another or from one portable oxygen equipment modality to another.
- (g) **New supplier.** If a beneficiary changes suppliers, a new period of continuous use does not begin.
- (h) **Oxygen equipment furnished after the 36-month rental period.** A new period of continuous use does not begin under any circumstance in the case of oxygen equipment furnished after the 36-month rental period in accordance with [§ 414.226(h)](/cfr/42/414.226.md?p=h) until the end of the reasonable useful lifetime established for such equipment in accordance with [§ 414.210(h)](/cfr/42/414.210.md?p=h).

# §414.232. Special payment rules for transcutaneous electrical nerve stimulators (TENS).

- (a) **General payment rule.** Except as provided in [paragraph (b)](#b) of this section, payment for TENS is made on a purchase basis with the purchase price determined using the methodology for purchase of inexpensive or routinely purchased items as described in [§ 414.220](/cfr/42/414.220.md). The payment amount for TENS computed under [§ 414.220(c)(2)](/cfr/42/414.220.md?p=c-2) is reduced according to the following formula:
  - (1) **Effective April 1, 1990—** the original payment amount is reduced by 15 percent.
  - (2) **Effective January 1, 1991—** the reduced payment amount in [paragraph (a)(1)](#a-1) is reduced by 15 percent.
  - (3) **Effective January 1, 1994—** the reduced payment amount in [paragraph (a)(1)](#a-1) is reduced by 45 percent.
- (b) **Exception.** In order to permit an attending physician time to determine whether the purchase of the TENS is medically appropriate for a particular patient, two months of rental payments may be made in addition to the purchase price. The rental payments are equal to 10 percent of the purchase price.