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Medicare Reimbursement Analysis · Home Oxygen Therapy · 1989–2025

Decades of
Deliberate Erosion

How successive oxygen-specific legislation — the BBA, MMA, DRA, MIPPA, and competitive bidding — dismantled the financial foundation of home respiratory therapy, cutting Medicare oxygen reimbursement by over 75% and eliminating the economic model that funded RT clinical services in the home.

Guest Contributor · Chrysalis Ashton, MSRC, RRT
−76%
Cumulative rate reduction
from 1989 baseline to CBP floor
Baseline / Reference Rate
Legislative Cut
Resulting Rate
← Click a row to see what changed
Show rates in:
Dollar amounts shown are what providers were actually paid in that year — not adjusted for inflation.
All values converted to 2024 dollars using CPI-U — this reflects 2024 purchasing power specifically, not the current calendar year.
◈
Select a row to explore
each legislative event
Provider Payment ≠ Patient Cost
The rates on this chart represent what Medicare pays the oxygen equipment supplier — the provider's reimbursement from the payer. This is not the same as what a patient pays out of pocket. Under Medicare Part B, patients are generally responsible for 20% coinsurance of the Medicare-approved amount after meeting their annual deductible, with the remaining 80% going to the provider. Patients with Medigap, Medicaid, or employer supplemental coverage may pay significantly less or nothing at all. Conversely, patients in Medicare Advantage plans may face different contracted rates and cost-sharing structures entirely. Reported cuts to provider reimbursement do not translate directly into equivalent changes in patient bills — and the dollar amounts shown here reflect the payer-to-provider transaction only.
Sources · Medicare.gov: Oxygen Equipment & Accessories  ·  KFF: How Medicare Pays Physicians  ·  CMS: Fee Schedules — General Information
$320
1989 baseline
monthly rate
$77
CBP floor rate
(lowest recorded)
7
Oxygen-specific
legislative cuts since 1989
>3,500
DME companies
closed since cuts began
Sources: GAO HEHS-97-120R (1997) · OIG OEI-03-91-00711 (1991) · OIG OEI-09-03-00160 (2004) · OIG OEI-09-04-00420 (2005) · GAO-11-56 (2011) · GAO-15-63 (2014) · CMS Federal Register Nov. 2006 (71 FR 65884) · Lewarski JS (2023) · AARC Kaufman Survey (2011) · Dobson DaVanzo Survey (2017) · Note: Monthly rates shown represent the approximate national average Medicare allowable for home oxygen therapy (stationary concentrator E1390 plus portable contents), the primary proxy for total oxygen reimbursement. All events shown are oxygen-specific legislative or regulatory actions. Actual rates varied by state and modality. BBA = Balanced Budget Act. MMA = Medicare Modernization Act. DRA = Deficit Reduction Act. MIPPA = Medicare Improvements for Patients and Providers Act. CBP = Competitive Bidding Program.
Chrysalis Ashton
About the author
Chrysalis Ashton, MSRC, RRT
Respiratory Therapist · Post-Acute Care Advocate

Chrysalis Ashton, MSRC, RRT, is a respiratory therapist with 13 years of experience and a dedicated advocate for the post-acute care profession. After beginning her career in acute care, she found her passion for home care and DME, where she has served in several roles, including Clinical Director and Compliance Officer. Chrysalis actively advances the respiratory profession by coordinating partnerships with RT education programs, mentoring future clinicians, and volunteering as an AARC Delegate and home care chair-elect for her state respiratory society. She is a graduate of the AARC's inaugural Emerging Leaders Program (2024). Chrysalis regularly volunteers with several advocacy organizations, such as the COPD Foundation, where she is a State Captain, and AAHomecare, where she participates in several committees and work groups.

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