The SOAR Act of 2025 restructures how Medicare pays for supplemental oxygen and related equipment and services. It removes oxygen from the Competitive Acquisition Program and replaces that purchasing model with a hybrid fee-schedule system, a separate statutory regime for liquid oxygen, add-on payments for respiratory therapist services, and a set of supplier obligations aimed at improving beneficiary access and safety.
For providers and payers the bill matters because it swaps market-based pricing pressure for administratively set rates and explicit payment floors and add-ons. That changes incentives for suppliers, manufacturers, and Medicare contractors, while imposing new operational requirements—electronic prescribing templates, 24-hour on-call coverage, delivery and maintenance duties, and beneficiary notices—that will affect clinical workflows and compliance programs.
At a Glance
What It Does
The bill removes oxygen and related supplies from Medicare’s competitive bidding and prescribes area-specific fee-based payment formulas beginning January 1, 2026, plus a distinct statutory payment regime and floor for liquid oxygen. It requires a non-budget-neutral monthly add-on for respiratory therapist services, mandates electronic templates for medical necessity documentation, and establishes supplier duties and beneficiary notice and grievance rights.
Who It Affects
Durable medical equipment (DME) suppliers of gaseous and liquid oxygen, manufacturers and distributors of liquid oxygen infrastructure, respiratory therapists and home-health clinicians, Medicare Administrative Contractors (MACs) and CMS auditors, and Medicare beneficiaries who use supplemental oxygen at home or in the community.
Why It Matters
The changes recast payment incentives: they aim to restore supplier participation and liquid-oxygen availability that critics say competitive bidding reduced, while shifting program integrity tools toward standardized electronic documentation. The bill increases financial support for suppliers and clinicians but raises Medicare spending and implementation complexity for CMS and contractors.
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What This Bill Actually Does
The core payment change is straightforward: as of January 1, 2026 the bill takes oxygen and oxygen-related items out of the Competitive Acquisition Program and moves them back into an administratively determined payment path. In competitive-bidding areas that still have bidding for other items, payment equals the local fee-schedule amount in effect on December 31, 2025 for 2026, then is indexed annually to CPI-U thereafter.
Rural and non-contiguous areas receive a blended payment (half tied to a national average pricing construct, half to area fee schedules with CPI updates). Other areas receive a blended percentage (75% adjusted payment, 25% unadjusted fee-schedule amount).
Those formulas replace market bid prices with predictable, index-linked payments.
Liquid oxygen gets special treatment: CMS must set a separate, cost-informed payment rate via notice-and-comment rulemaking by January 1, 2026 that accounts for per-pound oxygen costs, equipment and infrastructure, transportation, maintenance, and regulatory compliance. The statute imposes a payment floor no lower than 200% of the 2015 DME fee schedule adjusted by CPI through 2025 and requires an interim transitional payment equal to that 200% floor until the new rate is implemented.
The Secretary must also establish objective clinical coverage criteria for liquid oxygen and update them at least every five years; there is an explicit monthly add-on mechanism for patients prescribed flows ≥6 LPM calculated on per-pound oxygen use.Suppliers must meet a defined scope of services to receive Medicare payment. The bill requires initial beneficiary evaluation using a uniform oxygen patient evaluation form, timely delivery and setup (including discharge coordination), access to portable systems when clinically necessary, patient and caregiver education (including safety and infection control), equipment maintenance, monitoring visits (including respiratory therapist involvement when needed), exception reporting to prescribers, 24-hour on-call coverage, and assistance coordinating care when beneficiaries travel or relocate.
The supplier duties create a service-level baseline that ties payment to demonstrable operational performance.To strengthen program integrity while reducing paperwork variation, the bill mandates electronic templates completed by the prescribing practitioner for any oxygen-related claim furnished on or after January 1, 2026. The template must document visit timing, qualifying blood-gas or saturation results, and the specific equipment or supplies ordered; CMS may not require prescribers’ narrative medical notes on the template.
MACs must adjudicate oxygen claims using electronic transactions. At the same time the bill directs CMS to restore ‘‘clinical inference’’ in audit reviews—requiring auditors to use clinical judgment alongside templates and records rather than rigid checklist denials.Finally, the bill builds beneficiary-facing protections: annual Medicare notices must explain the 36-month rental period and cost-sharing rules and suppliers must send monthly notices showing months remaining in the rental cap.
The Secretary must write regulations guaranteeing supplier choice, plain-language communications, confidentiality, timely repair/replacement, involuntary-discharge procedures (30 days’ notice except in immediate-safety cases), emergency continuity plans, and internal and external grievance options without retaliation.
The Five Things You Need to Know
Beginning January 1, 2026 oxygen and all oxygen-related equipment and supplies are removed from the Competitive Acquisition Program and paid under new fee-based formulas tied to area fee schedules and CPI-U increases.
The bill requires a separate liquid-oxygen payment set by notice-and-comment rulemaking, with a statutory floor no lower than 200% of the 2015 DME fee schedule updated through 2025 and a transitional interim payment at that same 200% level until the final rate is implemented.
It creates a non-budget-neutral monthly add-on to the oxygen payment to cover respiratory therapist services beginning January 1, 2026, and defines 'respiratory therapist services' in statute.
Prescribers must complete an electronic template for every oxygen-related request that documents visit timing, qualifying blood-gas or saturation results, and the ordered equipment; MACs must adjudicate claims using electronic transactions.
Suppliers must provide operational minimums (initial uniform evaluations, delivery/setup, maintenance, 24-hour on-call coverage, portable oxygen access, and monthly notices of remaining rental months) or face payment ineligibility.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Remove oxygen from competitive bidding; new fee-based payment formulas
This section amends sections 1847 and 1834(a)(9) of the Social Security Act to exclude oxygen and oxygen-related items from the Competitive Acquisition Program as of Jan 1, 2026. It prescribes area-differentiated payment rules: in competitive-bidding areas payment starts with the 2025 fee-schedule amount and is CPI-U indexed; in rural/non-contiguous areas a 50/50 blend of an adjusted national-average price and area fee-schedule is used; other areas receive a weighted blend of adjusted and unadjusted fee-schedule amounts. Practically, this substitutes administratively determined rates for bid-derived payments and creates predictable CPI-based updates.
Separate liquid-oxygen payment, floor, updates, and high-flow add-on
Subparagraph (F) imposes a separate payment architecture for liquid oxygen: CMS must adopt a rate via notice-and-comment that captures per-pound oxygen cost, equipment and infrastructure, transportation, maintenance, and regulatory compliance. The statute sets a minimum payment floor equal to 200% of the 2015 DME fee schedule updated through 2025; an identical transitional interim payment applies from enactment until rule implementation. The Secretary must increase the base rate annually beginning 2027 by projected CPI-U, assess adequacy at least every three years, and implement a non-budget-neutral monthly add-on for prescriptions ≥6 liters per minute tied to the incremental per-pound oxygen cost.
Supplier scope-of-service / responsibilities criteria
Section 102 adds a new statutory list of minimum supplier responsibilities to receive Medicare payment. These duties range from using a uniform oxygen patient evaluation form and ensuring appropriate portable oxygen access, to performing delivery and setup, evaluating patient ability to use equipment, providing infection-control instructions, conducting maintenance and monitoring visits (including respiratory therapist involvement when appropriate), supplying emergency backups, and offering 24-hour on-call coverage. The Secretary must define and finalize these responsibilities in consultation with stakeholders, and the provision takes effect one year after enactment to allow supplier operational adjustments.
Technical correction to statutory language
A narrow drafting correction replaces anachronistic references (e.g., 'iron lungs, oxygen tents') with the modern phrase 'oxygen and oxygen related equipment, supplies, and services' in section 1861(n). The change aligns statutory cross-references with the bill’s broader updates and avoids conflicting terminology across Medicare rules.
Statutory recognition and reimbursement for respiratory therapist services
This title adds 'respiratory therapist services' to the list of covered 'medical and other health services' under section 1861(s)(2) and defines the term in a new subsection. It also requires the Secretary to implement a non-budget-neutral monthly payment add-on for respiratory therapist services through notice-and-comment rulemaking. The statutory language ties coverage to State scope-of-practice and accreditation standards, creating a fiscal pathway to reimburse RT involvement in home oxygen care.
Electronic templates for medical necessity and restoration of clinical inference
Section 301 directs CMS to adopt an electronic template that prescribing practitioners must complete for oxygen claims furnished on or after January 1, 2026. The template must capture visit timing, qualifying blood gas or oxygen saturation results, and the prescribed equipment; CMS may not demand full narrative medical notes on the form. The bill also requires MACs to adjudicate oxygen claims electronically and instructs CMS to restore the use of clinical inference and judgment in audits—i.e., auditors must consider clinical context when reviewing templates and records rather than applying inflexible checklist rules.
Beneficiary notices: annual cost-sharing and monthly rental-cap updates
This section amends the Medicare 'Medicare & You' notice duties to require annual explanations of the 36-month rental period, the right to discuss oxygen prescriptions with clinicians, and cost-sharing rules, plus grievance-process information. It also directs CMS to send monthly notices to supplemental oxygen beneficiaries (developed with stakeholders) indicating the number of months remaining in their rental cap during which they owe cost sharing—intended to reduce surprise bills and clarify when rental obligations end.
Regulatory beneficiary protections and supplier obligations
Section 401 requires the Secretary to promulgate regulations guaranteeing beneficiaries a menu of rights: supplier choice and change, clear communications and confidentiality, the right to refuse or discontinue treatment without retaliation, maintenance and timely repair or replacement of broken equipment, emergency continuity plans (e.g., for power outages), notice rules for involuntary supplier discharge (30 days in most cases), and assistance when traveling. The provision links these rights directly to supplier obligations under Medicare payment rules.
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Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Medicare beneficiaries on supplemental oxygen — will likely see improved access, clearer cost-sharing timelines (monthly rental-cap notices), stronger consumer protections (choice of supplier, repair/replacement standards, grievance rights), and better continuity during travel or emergencies.
- Liquid-oxygen suppliers and manufacturers — receive an explicit statutory payment floor and a rulemaking process to capture infrastructure and transportation costs, improving the business case for supplying liquid oxygen in rural or hard-to-serve markets.
- Respiratory therapists and home-based clinicians — gain a statutory payment pathway and an explicit add-on intended to reimburse RT clinical involvement, which could expand RT roles in home oxygen evaluation, setup, and monitoring.
Who Bears the Cost
- Medicare program / taxpayers — the statutory floors, transitional interim payments, CPI-indexed updates, and non-budget-neutral add-ons increase expected program outlays compared with competitive-bid prices.
- DME suppliers who lack scale or efficient logistics — must absorb new operational requirements (24-hour on-call, timely delivery, maintenance and monitoring visits) that raise operating costs; small or thin-margin suppliers may exit or consolidate.
- CMS and Medicare Administrative Contractors — must develop and implement new electronic templates, adjudication workflows, rulemaking for liquid oxygen rates, rental-cap monthly notices, and audit guidance that restores clinical inference, increasing administrative workload and implementation complexity.
- Prescribing practitioners — must complete electronic templates for every oxygen-related order, adding a new documentation step that changes clinical workflow, even though narrative notes are not required on the template.
Key Issues
The Core Tension
The central dilemma: the bill prioritizes beneficiary access and reliable supplier participation by increasing payments and adding service mandates, but those steps weaken market-based price discipline and increase fiscal and administrative burdens—trading cost containment for access and quality assurances with no simple, risk-free balance.
The bill resolves access problems by increasing payments and codifying service standards, but those same fixes create clear trade-offs. Replacing competitive-bid prices with administratively set fee formulas and statutory floors reduces price pressure and will likely increase Medicare spending; the measure relies on CPI indexing rather than direct cost-based updates except where CMS must set rates through rulemaking (liquid oxygen).
That leaves open how CMS will calibrate rates to avoid overpayment in efficient markets while assuring supply in high-cost, low-volume geographies.
Operationally, the supplier service obligations and template mandates improve transparency and continuity of care but impose implementation costs. Smaller suppliers may struggle with 24-hour coverage obligations and the capital outlay for liquid-oxygen infrastructure, potentially accelerating consolidation—ironically reducing competition that the Competitive Acquisition Program sought to harness.
The requirement that auditors use clinical inference balances program integrity and beneficiary access, but it also introduces subjectivity into audits and potential inconsistency across contractors. Finally, liquid-oxygen rate-setting depends on granular cost data (per-pound oxygen costs, infrastructure) that could be difficult to standardize, and the high-flow add-on tied to per-pound oxygen use may be complex to calculate and audit safely.
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