Medicare Oxygen Rules Get an Overhaul: SOAR Act Proposes New Payment System, Therapist Access, and Clearer Patient Rights Starting 2026

The Supplemental Oxygen Access Reform (SOAR) Act of 2025 aims to significantly change how Medicare handles supplemental oxygen therapy for beneficiaries. This bill removes oxygen and related equipment from the often-criticized competitive bidding program starting January 1, 2026. Instead, it sets up new, specific payment rules based on geographic area and introduces dedicated payment adjustments, particularly for costly liquid oxygen. The goal appears to be stabilizing access and supplier services, but it also reworks how these services are documented and delivered.

Beyond the Bids: Rethinking Oxygen Payments

One of the biggest shifts in the SOAR Act is taking supplemental oxygen out of Medicare's competitive bidding system (Sec. 101). Since 2011, competitive bidding aimed to lower costs by having suppliers bid against each other, but critics argued it sometimes limited patient choice and access, especially for specialized equipment. This bill scraps that for oxygen starting in 2026.

So, how will suppliers get paid? It depends on where you live:

• Areas that had competitive bidding: Payments in 2026 will be based on the rates from Dec 31, 2025, adjusted annually for inflation (CPI-U).
• Rural and non-contiguous areas (think Alaska, Hawaii): Payments will be a 50/50 blend of 110% of the national average price and the Dec 31, 2025 fee schedule amount, also adjusted for inflation annually.
• Other areas: A mix of 75% of the adjusted competitive bid area rate and 25% of the unadjusted fee schedule amount.

There's a special focus on liquid oxygen, often needed by patients with higher flow requirements. The bill mandates a separate, higher payment rate for liquid oxygen, starting with an interim rate set at 200% of the 2015 fee schedule (adjusted for inflation through 2025) until permanent rules are finalized (Sec. 101). The final rate must consider the actual costs of liquid oxygen and related infrastructure. There's also a specific add-on payment for patients needing high flow rates (6+ liters per minute). The government will need to establish clear clinical criteria for who qualifies for liquid oxygen coverage.

New Job Descriptions: What Oxygen Suppliers Must Do

Getting paid under this new system comes with strings attached. Section 102 lays out a detailed list of responsibilities for oxygen suppliers, effective one year after the bill becomes law. This isn't just about dropping off a tank; suppliers must:

• Evaluate patient needs using a standard form.
• Ensure access to portable oxygen for use outside the home.
• Provide thorough education on equipment use, safety (including home checks), and maintenance.
• Deliver and set up equipment promptly.
• Offer 24/7 on-call support.
• Help coordinate services if a patient travels or moves permanently.
• Conduct monitoring visits, potentially involving respiratory therapists.

This aims to standardize the service level beneficiaries receive, ensuring consistent support and education alongside the equipment itself.

Adding Experts to Your Corner: Respiratory Therapists Get Medicare Nod

For the first time, the SOAR Act proposes adding "respiratory therapist services" to the list of "medical and other health services" covered under Medicare Part B, effective January 1, 2026 (Sec. 201). This means services provided by respiratory therapists related to assessing, treating, and monitoring oxygen patients within their state scope of practice could be billed to Medicare. The bill also requires a specific, non-budget neutral add-on payment adjustment to cover the costs of these services when provided as part of the oxygen benefit, acknowledging their specialized role.

Digital Docs & Audit Rules: Tightening Oxygen Claims

To combat potential fraud and ensure oxygen is medically necessary, the bill mandates the use of standardized electronic templates starting January 1, 2026 (Sec. 301). Your doctor would need to complete this template, documenting things like qualifying test results and the need for specific equipment. This template becomes the primary document for justifying payment, intended to streamline the process and reduce paperwork burdens (specifically excluding the need for separate medical record notes for the template). Simultaneously, the bill requires Medicare contractors to use electronic systems for processing these claims.

Interestingly, Section 301 also directs Medicare auditors to use "clinical inference and judgment" when reviewing oxygen claims, similar to how audits were conducted before 2009. This contrasts with potentially stricter, purely objective reviews, suggesting a desire to balance program integrity with clinical realities, though it could raise questions about consistency.

Know Your Flow: New Rights and Notices for Oxygen Users

Transparency and patient empowerment are key themes in Titles III and IV. Patients will receive more frequent updates about their oxygen benefit. Currently, oxygen equipment rental is capped at 36 months, after which the patient owns the equipment but the supplier still gets paid for contents/maintenance. Section 302 requires the government to send monthly notices telling patients how many months are left in their 36-month rental copayment period. Annual notices will also detail rights, cost-sharing, and grievance procedures.

Furthermore, Section 401 establishes a comprehensive list of beneficiary rights. These include the right to:

• Choose and change local suppliers.
• Receive clear communication and have privacy respected.
• Be fully informed about services, costs, and the right to refuse treatment.
• Receive appropriate equipment for mobility and prescribed oxygen levels.
• Have equipment maintained and faulty items replaced promptly.
• Receive assistance with oxygen needs during travel.
• Be informed about emergency plans (like power outages).
• File grievances without fear of retaliation.

This detailed list aims to ensure patients are active, informed participants in their care and have clear recourse if issues arise with their supplier or services.