Medicare Oxygen Bill Ends Competitive Bidding, Mandates 24/7 Supplier Support, and Boosts Liquid Oxygen Payments

The SOAR Act of 2025 is tackling a major pain point in the healthcare system: how Medicare covers supplemental oxygen therapy. Starting January 1, 2026, this bill pulls oxygen and all related equipment, supplies, and services out of Medicare’s competitive bidding program. For years, critics argued that competitive bidding—which drives prices down—also compromised quality and access, especially in rural areas. The bill swaps that low-bid model for new, geographically adjusted fee schedules, which are expected to be higher than current rates. For liquid oxygen, specifically, the payment floor will be set no lower than 200% of the 2015 fee schedule, adjusted for inflation through 2025 (Sec. 101), a move that aims to stabilize the supply chain but definitely signals higher costs for Medicare.

The New Rulebook for Oxygen Suppliers

If you or a loved one relies on supplemental oxygen, Title I of this bill is a game-changer for service quality. To get paid by Medicare, suppliers can no longer just drop off a machine and disappear. They must now meet a long list of mandatory responsibilities, including initial patient evaluations, providing portable equipment for mobility outside the home, offering written and verbal safety training, and—critically—providing 24-hour on-call coverage (Sec. 102). This means if your machine breaks at 2 a.m., someone has to answer the phone and address the issue. While this is fantastic news for patients who rely on reliable service, it creates a high compliance bar that could squeeze out smaller or rural suppliers who struggle to staff 24/7 support, potentially leading to service consolidation.

Clearing the Air on Costs and Rights

Title IV establishes a robust set of new patient rights designed to increase transparency and choice. You get to pick your local supplier from qualified providers and switch if you need to (Sec. 401). Perhaps most helpful for managing household finances, the bill mandates that Medicare send out a monthly notice detailing exactly how many months are left in the 36-month rental cap period for the equipment (Sec. 302). This means no more guessing when your rental obligation ends and the equipment officially becomes yours. The supplier also has to be upfront about your right to refuse treatment, their emergency plans for power outages, and their policy for helping you secure oxygen when you travel.

Less Paperwork, More Clinical Judgment

Title III tackles the bureaucratic side of oxygen claims. Starting in 2026, doctors prescribing oxygen must use a specific electronic template to document medical necessity, which must include proof of a recent patient visit and required blood gas test results (Sec. 301). The good news is that this template is intended to be the sole requirement for coverage decisions, meaning less administrative hassle for the physician. Furthermore, Medicare auditors are instructed to restore “clinical inference” when reviewing claims—a move back to common-sense clinical judgment rather than rigid, checklist-style audits used since 2009. This should reduce arbitrary claim denials for suppliers, but doctors must adapt quickly to the new mandatory electronic template, as paper claims for these items will no longer be accepted.

A Win for Respiratory Therapists

Finally, the bill formally recognizes the role of Respiratory Therapists (RTs) in oxygen care. Starting January 1, 2026, the law includes “respiratory therapist services” under Medicare coverage and mandates an extra payment amount to reflect the cost of these services appropriately (Sec. 201). For RTs, this is a significant step toward proper reimbursement and recognition of their expertise in managing complex oxygen therapy, which should improve the overall quality of care coordination for patients.