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January 26, 2026

Widespread Pre-Pay Service Specific Medical Record Review Announcement – (Healthcare Common Procedure Coding System) (HCPCS) Code E1390

CGS will conduct a medical record pre-pay review of claims that have the code E1390 and associated codes with the N3 modifier:

  • E1390 – OXYGEN CONCENTRATOR, SINGLE DELIVERY PORT, CAPABLE OF DELIVERING 85 PERCENT OR GREATER OXYGEN CONCENTRATION AT THE PRESCRIBED FLOW RATE
  • N3 MODIFIER – GROUP 3 OXYGEN COVERAGE CRITERIA MET

The Oxygen policy group ranks high in Comprehensive Error Rate Testing (CERT) errors for Jurisdiction B and Jurisdiction C. In November 2025, CGS concluded a 100-claim widespread probe for oxygen claims with the N3 modifier in which 84% of the claims reviewed were denied. The most common denial reason was related to improper application of the N3 modifier (Group III). Group III is for patients with absence of hypoxemia who need oxygen due to a medical condition with distinct physiologic, cognitive, and/or functional symptoms documented in high-quality, peer-reviewed literature to be improved by oxygen therapy, such as cluster headaches (not all inclusive). Based on these results, more claim review and supplier education is warranted.

CGS will review medical records for randomly selected claims before payment. This review does not target any specific supplier or provider.

CGS will send Additional Documentation Requests (ADR) for these claims. It is important to respond to ADR letters. Federal law (Social Security Act, Sections 1815(a), 1833(e), and 1862(a)(1)(A)) authorizes the collection of this information. Suppliers are in violation of Supplier Standard #28 when, upon request, they fail to provide requested documentation to a Medicare contractor like CGS.

Failure to provide records may result in a claim denial and referral to either or both the National Provider Enrollment (NPE) contractor and/or UPIC.

The ADR letter will have the following information:

  • Treating practitioner's written order
  • Documentation to support the statutory and reasonable and necessary criteria; defined in the Local Coverage Determination and related Policy Article
  • Any other pertinent documentation
  • Copy of Advance Beneficiary Notice of Noncoverage (ABN), if one was obtained

Resources

Publication History

January 20, 2026 Originally published
January 26, 2026 Revised to clarify N3 modifier

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