Topical Oxygen Therapy and the Proposed LCD: What It Is, Who It Covers, and Which Door Your Claim Walks Through

Multiple Names for One Therapy, and Why That Matters Before Anything Else

If you have been following topical oxygen therapy (TOT) in recent news cycles, you have probably seen it referred to several different ways depending on which document you were reading: continuous diffusion of oxygen (CDO), topical hyperbaric oxygen, topical application of oxygen, or whatever brand is on the box.

Before you can answer whether topical oxygen therapy is covered, you have to answer a surprisingly difficult question: which of these names is the one your payer or an auditor expects you to be using?

None of these names are intrinsically incorrect. Each simply comes from a different system. Some describe a coverage category. Others describe how oxygen is delivered. Others exist as a billing descriptor or regulatory heading. And some? Are simply trademarks.

The brand names.

These are trademarks. They identify a manufacturer's product, not a coverage category, and no payer policy is written around one.

Some are obvious. Others are not: at least one phrase circulating in the current coverage discussion reads like a plain description of the therapy and is in fact a manufacturer's registered therapy name. So, if a term sounds generic, that is not evidence that it is. Check whether it appears in the coverage document before you use it in a chart note.

The category name.

The proposed local coverage determination settles this in one sentence: "In this LCD, 'TOT' refers to topical oxygen therapy, including intermittent and continuous modalities."¹ That is the name that matters, because it is the name the proposed coverage policy uses.

The modality names.

The proposed local coverage determination describes two delivery methods. Intermittent TOT delivers oxygen at low pressure, 0.049 to 1.03 atmospheres depending on the system, into a closed chamber around the wound, typically 90 minutes a day for four consecutive days followed by three days without.¹

Continuous TOT, also called continuous diffusion of oxygen (CDO), applies low-flow oxygen, less than 1 liter per minute, to the wound surface continuously at atmospheric pressure through a cannula inserted into a specially designed dressing.¹

The billing names.

The existing Healthcare Common Procedure Coding System (HCPCS) descriptors read "topical oxygen delivery system" and "topical hyperbaric oxygen chamber."² These descriptors exist to identify billing codes, not to define Medicare coverage policy or summarize the clinical evidence.

The regulatory name.

Here is where the terminology becomes genuinely confusing.

Two separate parts of Medicare's own filing system point a clinician toward hyperbaric oxygen therapy. The first is a billing descriptor: a topical hyperbaric oxygen chamber.² The second is where the policy used to live. Until 2017, topical oxygen was addressed in a subsection titled "Topical Application of Oxygen," sitting inside the National Coverage Determination for Hyperbaric Oxygen Therapy.³

That is not marketing language. One is a billing code descriptor and the other is a filing location, and neither was written to explain the therapy to a clinician.

A currently effective local coverage determination states the distinction plainly: topical oxygen therapy administered to an open wound in small limb-encasing devices "is not typically hyperbaric oxygen (HBO) therapy."⁴

A clinician could reasonably see the word hyperbaric, assume the therapy falls under that national coverage determination, and begin asking the wrong coverage questions.

Different therapy, different benefit category, different policy.

And the confusion is not limited to billing or Medicare policy. It appears in clinical literature as well.

One network meta-analysis summarized in the proposed local coverage determination evaluated topical oxygen therapy, hyperbaric oxygen therapy, hyperbaric air therapy, and topical hyperbaric oxygen therapy as four separate interventions.¹

Whether every author uses those terms the same way is almost beside the point. The fact that researchers must distinguish among similarly named oxygen therapies illustrates the same challenge clinicians face when reading coverage policies.

If the name cannot reliably tell you what the therapy is, it certainly cannot tell you whether it is covered.

How Medicare Coverage Documents Are Organized

Names cannot tell you whether a therapy is covered. Documents can. But topical oxygen does not live in one document. It appears in a proposed local coverage determination, in a final one already in effect, in a separate non-coverage determination issued by a different contractor, and in billing articles, one of which is formally designated as supporting no determination at all.

Before any of those can tell you anything, you need to know what each one is and what it is allowed to decide.

Fortunately, there are only three document types you need to know, and they are not interchangeable. Two of them decide coverage. The third tells you how to bill it.

National Coverage Determinations (NCDs) are national policy that grants, limits, or excludes Medicare coverage for a specific item or service. CMS develops and publishes them, they apply in every state, and Medicare Administrative Contractors (MACs) are required to follow them.⁵

Local Coverage Determinations (LCDs) are decisions made by a MAC about whether a particular service or item is reasonable and necessary, and therefore covered, within the jurisdiction that contractor oversees. A MAC develops one when there is no NCD on the subject, or when an existing NCD needs to be further defined locally. Before an LCD becomes final, the MAC publishes a proposed version with a public comment period.⁵

Local Coverage Articles, which CMS's own document-type table simply calls Articles and which the industry usually shortens to LCAs, are also published by the MACs. They typically carry coding and billing guidance, and CMS is explicit that an article may or may not be written in support of an LCD. Articles that directly support one are formally designated LCD Reference Articles. Articles that do not are labeled, in so many words, as not being LCD reference articles. Response to Comment articles, which collect the issues stakeholders raised during a proposed LCD's comment period, are their own named type.⁵

The document IDs encode all of this, which is useful the moment you are trying to work out what somebody is actually citing. LCD IDs begin with L. Proposed LCD IDs begin with DL. Article IDs begin with A, and draft articles, written in support of a proposed LCD, begin with DA.⁵

So L33797 and DL33797 are not two names for the same document.

One is a final LCD in effect right now. The other is a proposal to revise it. You may also see a completely different number cited in news coverage or online discussions. That number is a database record identifier. It is not the document ID printed on the document itself.

And here is the rule that matters most. CMS states it plainly in the same document: where an NCD does not specifically exclude or limit an indication, or where the item or service is not mentioned in an NCD or a Medicare manual at all, that item or service may be covered at the discretion of the MAC based on an LCD. LCDs cannot contradict an NCD. They exist either to clarify national policy or to address coverage questions that national policy leaves unanswered.⁵

Hold onto that sentence. It is about to do a lot of work.

What the DME MACs Have Actually Proposed

On July 23, 2026, the four Durable Medical Equipment (DME) MACs posted a proposed revision to the Oxygen and Oxygen Equipment LCD.¹ Two clarifications, because both are being reported incorrectly in places.

This is not a CMS action.

CMS issues NCDs. MACs issue LCDs.

Since 2017, no NCD has governed topical oxygen therapy for chronic wounds. The coverage question falls to the MACs through the LCD process. That is the discretion rule, applied to TOT.

This proposed LCD originated from CGS Administrators, which covers DME jurisdictions J-B and J-C, and Noridian Healthcare Solutions, which covers J-A and J-D.¹ All four DME jurisdictions together cover the entire country, which is why a local coverage determination here has national reach. Some news coverage and industry communications have characterized this as a CMS approval. It is neither CMS nor an approval.

What is actually changing.

It is a proposed revision adding a new coverage group, Group V, to an existing LCD that already governs home oxygen.¹

The record names the requestors: a manufacturer and a group of wound care specialists represented by outside counsel, each with a request letter on file.¹ The proposed LCD lists the reason for the proposal as coverage requests from those two parties.¹

Comments are open from July 23, 2026 through September 5, 2026, and a virtual open meeting is scheduled for August 26, 2026 at 12:30 p.m. Eastern, covering all states. Written comments may be submitted by email to TOTRecon@noridian.com or by mail to the DME MAC Medical Directors, ATTN: OXY Proposed LCD Comments, 4510 13th Ave. S, STE 1, Fargo, ND 58103-6646.¹

One practical note. September 5, 2026 falls on a Saturday. If your program intends to comment, do not plan on the deadline.

Which Patients the Proposal Would Cover

Read this one with the patient in mind, because the criteria are precise.

For the first month, the treating practitioner must complete an in-person visit and document all five of the following.¹

• The beneficiary has a non-gestational type of diabetes mellitus.

• The ulcer has not experienced at least a 50% reduction in area despite at least four consecutive weeks of optimized diabetic foot ulcer care.

• Glycosylated hemoglobin is below 12% within the three months prior to starting therapy for the current ulcer.

• Arterial perfusion is adequate to support healing, established by any one of the following:

  • absolute toe systolic blood pressure above 30 mm Hg

  • ankle brachial index above 0.7

  • normal pulse volume recordings on Doppler ultrasound

  • transcutaneous oxygen measurement on the dorsum of the foot above 30 mm Hg together with skin perfusion pressure above 30 mm Hg

• The beneficiary will continue optimized ulcer care.

That second criterion should look familiar. The four-week, 50% area reduction checkpoint is not new and it is not unique to this policy. It is the standard reassessment point that already governs when a wound care team escalates to advanced therapy.

For each month after the first, the practitioner must complete another in-person visit and document that the patient is benefiting, defined as either a reduction in ulcer area (calculated as length x width) of at least 20% from the most recent month's measurement, or improvement in the ulcer classification on a clinically validated standardized grading scale, and that the patient continues to adhere to optimized care.¹

The measurement baseline is specified, and it is the kind of detail that determines whether a claim survives. The proposal is not simply asking whether the wound improved. It specifies which measurements must be compared to answer that question.

For the second month of continued coverage, the comparison uses measurements taken after optimized ulcer care began but before topical oxygen started. For any month after that, the comparison uses measurements taken at the beginning and end of the prior month.¹

Coverage would end at the earliest of three points: the initial criteria stop being met, the treating practitioner judges that adequate healing has occurred such that therapy may be discontinued, or the equipment and supplies are no longer being used by the beneficiary, whether or not the practitioner ordered the stop.¹

Read from beginning to end, the proposal defines a schedule as much as it defines eligibility. Before treatment begins, specific criteria must be documented. Every month afterward, progress must be measured against a defined baseline. And the proposal specifies when coverage ends.

It is not a course you start and revisit at the end.

The Exclusion List, and What It Tells You

The proposed policy would deny topical oxygen therapy as not reasonable and necessary if any of the following is present.¹

• A diabetic foot ulcer with:

  • abscess

  • osteomyelitis

  • joint sepsis

  • gangrene

• Limb involvement on the same side as the ulcer, within the past three months, of:

  • deep vein thrombosis

  • malignancy

It would also deny topical oxygen therapy for any indication other than nonhealing diabetic foot ulcers.¹

Set the second one against a product's indications list for a moment. Manufacturer materials for therapies in this space commonly list diabetic foot ulcers, venous leg ulcers, pressure injuries, surgical wounds, and burns. The proposed coverage policy names one of those. The indication list a product carries and the indication list a payer covers are two different lists, and the first one has never governed payment.

The first exclusion is worth reading against the grading scales your team already uses. Abscess, osteomyelitis, and joint sepsis correspond to Wagner grade 3. Gangrene corresponds to Wagner grades 4 and 5.

The proposed LCD corroborates the pattern from its own evidence review: "Seventy percent of studies included only ulcers graded as 1-2 using the Infectious Diseases Society of America, Wagner-Meggitt, or University of Texas classifications."¹

So the proposed coverage tracks the population that was actually studied. The proposal targets earlier-stage ulcers that have stalled, rather than ulcers that have become infected or limb-threatening. Hyperbaric oxygen therapy for diabetic foot ulcers under NCD 20.29 requires Wagner grade 3 or higher.³

As written, the two Medicare policies meet at the same clinical boundary from opposite directions. The proposed topical oxygen policy stops before Wagner grade 3. Hyperbaric oxygen coverage begins at Wagner grade 3.

These are coverage documents, not a comparison. They draw a boundary; they do not rank the two treatment modalities against each other. Clinicians should know where the line falls, because wounds evolve, and a patient's clinical course may cross it in either direction.

Which Door Your Claim Walks Through

Remember the discretion rule.

Until 2017, topical oxygen was addressed nationally: NCD 20.29 carried a section that excluded it from coverage. CMS was asked to reconsider and cover it. Instead, CMS decided that no NCD was appropriate and removed the section entirely.⁴ The NCD now carries that heading only to announce its own deletion: effective for dates of service on and after April 3, 2017, MACs acting within their respective jurisdictions may determine coverage of topical application of oxygen for chronic non-healing wounds.³

When asked to say yes where it had previously said no, CMS said neither, and handed the determination down to the MACs. From that point the standard rule governed: an item not addressed by national policy falls to contractor discretion, exercised through LCDs.⁵

So the contractors took it up. Independently, for the first time, and not all at the same pace.

Palmetto GBA, the A/B MAC for Alabama, Georgia, and Tennessee in Jurisdiction J and for South Carolina, Virginia, West Virginia, and North Carolina in Jurisdiction M, maintains a currently effective non-coverage LCD for topical oxygen therapy. Its conclusion: "This A/B MAC has rendered the LCD for TOT as non-covered."⁴

Wisconsin Physicians Service, the A/B MAC for Jurisdiction J-05 covering Iowa, Kansas, Missouri, and Nebraska, lists topical oxygen therapy among the therapies its Wound Care LCD addresses, alongside debridement, electrical stimulation, negative pressure wound therapy, and low frequency non-contact non-thermal ultrasound. That section directs readers to the CMS change request that removed Section C.⁶

The DME MACs have proposed covering it under the oxygen and oxygen equipment benefit.¹

Here is why these are not in conflict: they govern different claims.

The question is not whether topical oxygen therapy is covered in the abstract. The question is which Medicare benefit the claim is being submitted under.

An A/B MAC policy governs what a facility or a practitioner bills. The proposed DME MAC policy governs what a supplier bills for equipment furnished in the beneficiary's home. A hospital outpatient wound center and a DME supplier serving that same patient are not submitting the same claim to the same contractor under the same benefit.

Noridian illustrates this better than any argument could, because it holds both kinds of contract. As one of the DME MACs, it is a party to the proposed coverage. As the A/B MAC for Jurisdiction J-E in California, it publishes its own billing and coding guidance on topical hyperbaric oxygen, formally designated as not being an LCD reference article.⁷ Same company. Two contract types. Two documents, each governing a different set of claims. That is not an inconsistency waiting to be resolved. It is the rule working exactly as written: the contract type determines which policy applies, and the name on the letterhead does not.

Which means the accurate answer to "is topical oxygen covered?" is: it depends which door the claim walks through. Same patient. Same wound. Same state. The benefit category decides, and the benefit category is not something you can read off the product name.

The payment structure follows the door, and that is where it acquires operational teeth. Under the proposed policy, topical oxygen would be paid inside the oxygen benefit's existing structure. The proposed text states that "Oxygen reimbursement is a bundled payment for both inhaled and topical modalities," with contents reimbursed through a monthly allowance and supplies included in the monthly rental payment.¹

A monthly bundled rental billed by a supplier is a fundamentally different economic object from an advanced therapy applied in your clinic and billed per application by area. Many wound programs naturally evaluate advanced therapies on a cost-per-square-centimeter basis. This one does not sit on that axis at all. It does not run through your chair time, your clinical staff, or your department's revenue. It does run through your documentation, every single month, because the practitioner visit and the measurement are what the coverage rests on.

What the Evidence Actually Says

Topical oxygen therapy is a legitimate area of clinical investigation and professional consideration. Practicing wound care specialists asked for this coverage. The 2023 International Working Group on the Diabetic Foot guideline advises considering topical oxygen as an adjunct to standard care for diabetes-related foot ulcers where standard care alone has failed and resources exist to support it, a recommendation graded conditional on low-certainty evidence.⁸ The American Diabetes Association's Standards of Care in Diabetes for 2026 states that for chronic diabetic foot ulcers that have failed to heal with optimal standard care alone, adjunctive treatment with randomized controlled trial-proven advanced agents should be considered, and names topical oxygen therapy alongside negative-pressure wound therapy and skin substitutes.⁹ The Wound Healing Society's 2024 diabetic foot ulcer treatment guidelines state that topical oxygen has been shown to increase the incidence of healing and decrease the time to heal.¹⁰

The proposed LCD also summarizes assessments from national bodies outside the United States. Those three guidelines are the ones carrying weight for a US wound care audience, and they are the ones cited here.

The proposed LCD reaches a measured conclusion. Although it acknowledges that the available literature is limited, it finds that the overall evidence supports the use of topical oxygen therapy for the treatment of shallow, noninfected, Wagner Grade 1 or 2 diabetic foot ulcers and concludes that the evidence is "consistently favorable and applicable to U.S. Medicare beneficiaries."¹ It notes that in refractory cases "there are limited non-surgical treatment options, which also lack robust evidence," that the risk of undesirable effects is consistently low, and that there is "a clear need for further investigation."¹

And the appraisal is candid. Applying GRADE, the standard framework for rating how certain a body of evidence is, the LCD reports low to very low certainty. Three randomized controlled trials were judged at low risk of bias; five were rated at high risk of bias. "Most were small, underpowered, industry-sponsored trials."¹

The DME MACs convened an eight-member specialty-focused Contractor Advisory Committee, seven voting members plus one industry representative, on December 11, 2024, and scored sixteen key questions on a 1 to 5 confidence scale.¹ Notably, the highest score in the table was 3.29, for intermittent oxygen and complete wound closure. Continuous oxygen on the same question scored 2.86. Durable healing scored 3.00 for intermittent and 2.14 for continuous.¹

Taken together, the evidence review and the specialty panel point in the same direction. The potential benefit appears real. The certainty does not yet match it. That is the balance reflected in the proposed LCD itself: favorable evidence, low risk, meaningful clinical need, and a continuing call for better studies.¹

Why This Matters Monday Morning

The proposed LCD? Is a technical document.

The problem it addresses? Is not.

The proposal reports approximately 38 million people in the United States living with diabetes, including roughly 16.5 million Medicare beneficiaries. Among those Medicare beneficiaries with diabetes, about 6% develop a diabetic foot ulcer each year. Roughly one in five patients who develop an ulcer eventually requires an amputation. Major lower-extremity amputation is associated with an increase in five-year mortality, to about 50%.¹

Nothing changes today.

Nothing in Medicare coverage changes until the proposal is finalized. If a supplier representative tells your team that topical oxygen is now covered, that is not accurate yet, and ordering on that basis creates a denial your program absorbs.

Know which contractor governs the claim.

If you are in a jurisdiction whose A/B MAC currently non-covers topical oxygen therapy, that policy governs what your facility bills regardless of what the DME MACs finalize. The two answers can coexist because they answer different questions.

The four-week checkpoint is already a gate.

The proposal turns the standard four-week reassessment into a coverage determination. Programs measuring and documenting at that interval are already positioned for this. Programs that reassess informally? Are not.

Document every month.

An in-person visit, a measurement, a comparison against a specified baseline, every month. Missing one month's measurement does not create a gap in the record. It creates a month with no basis for coverage.

If your clinicians have experience treating patients with these types of wounds, this is the point in the process when the contractors are asking to hear from them. The comment period remains open until September 5, 2026, and the open meeting is August 26, 2026.

SHS Insight: SHS assists our hospital and physician practice partners in implementing the documentation architecture that coverage policies like the proposed topical oxygen LCD depend on: consistent wound measurement at defined intervals, reassessment captured in the record rather than in the hallway, and medical necessity narratives that hold up when a payer reads them months later. When a policy makes a monthly measurement the difference between a covered month and an uncovered one, the measurement habit is the compliance control.

Questions about wound care or hyperbaric program documentation and compliance? Call (800) 474-0202 or email sales@sharedhealthservices.com.

References:

1. Centers for Medicare & Medicaid Services. Proposed Local Coverage Determination: Oxygen and Oxygen Equipment (DL33797). CGS Administrators, LLC and Noridian Healthcare Solutions, LLC, DME MACs. Posted July 23, 2026. Comment period July 23, 2026 through September 5, 2026. https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?lcdid=40403. Accessed August 3, 2026.

   
   

2. Centers for Medicare & Medicaid Services. Local Coverage Determination: Oxygen and Oxygen Equipment (L33797). Revision effective April 1, 2023. https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?lcdid=33797. Accessed August 3, 2026.

   
   

3. Centers for Medicare & Medicaid Services. National Coverage Determination 20.29: Hyperbaric Oxygen Therapy. Medicare National Coverage Determinations Manual, Publication 100-3, Section 20.29. Version 4, effective April 3, 2017. https://www.cms.gov/medicare-coverage-database/view/ncd.aspx?ncdid=12. Accessed August 3, 2026.

   
   

4. Centers for Medicare & Medicaid Services. Local Coverage Determination: Topical Oxygen Therapy (L37873). Palmetto GBA, A/B MAC. Original effective date May 6, 2019; revision effective April 16, 2026. https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?lcdid=37873. Accessed August 3, 2026.

   
   

5. Centers for Medicare & Medicaid Services. Medicare Coverage Document Type Descriptions. Last updated December 14, 2023. https://www.cms.gov/medicare-coverage-database/help/Document_Type_Descriptions.pdf. Accessed August 3, 2026.

   
   

6. Centers for Medicare & Medicaid Services. Local Coverage Determination: Wound Care (L37228). Wisconsin Physicians Service Insurance Corporation, J-05. Revision effective March 27, 2025. https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?LCDId=37228. Accessed August 3, 2026.

   
   

7. Centers for Medicare & Medicaid Services. Billing and Coding: Topical HBO and Physician Related Service Billing and Coding Guidelines (A56025). Noridian Healthcare Solutions, LLC, A/B MAC J-E. https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleid=56025. Accessed August 3, 2026.

   
   

8. Chen P, Vilorio NC, Dhatariya K, et al. Guidelines on interventions to enhance healing of foot ulcers in people with diabetes (IWGDF 2023 update). Diabetes Metab Res Rev. 2024;40(3):e3644. doi:10.1002/dmrr.3644. https://pubmed.ncbi.nlm.nih.gov/37232034/. Accessed August 3, 2026.

   
   

9. American Diabetes Association Professional Practice Committee for Diabetes. 12. Retinopathy, neuropathy, and foot care: Standards of Care in Diabetes-2026. Diabetes Care. 2026;49(Suppl 1):S261-S276. doi:10.2337/dc26-S012. https://pubmed.ncbi.nlm.nih.gov/41358886/. Accessed August 3, 2026.

10. Lavery LA, Suludere MA, Attinger CE, et al. WHS (Wound Healing Society) guidelines update: diabetic foot ulcer treatment guidelines. Wound Repair Regen. 2024;32(1):34-46. doi:10.1111/wrr.13133. https://onlinelibrary.wiley.com/doi/10.1111/wrr.13133. Accessed August 3, 2026.