Topical Oxygen Therapy and the Proposed Medicare LCD: What Podiatry Practices Need to Know

What Is the Proposed Medicare LCD for Topical Oxygen Therapy?

As of September 2026, the four DME Medicare Administrative Contractors (CGS Administrators and Noridian Healthcare Solutions) have proposed a Local Coverage Determination (DL33797) that would establish Medicare coverage for topical oxygen therapy (TOT) to treat non-healing diabetic foot ulcers. Coverage would apply to Wagner Grade 1 or 2 ulcers that have not achieved at least a 50% reduction in area after four consecutive weeks of optimized standard care, with documented adequate arterial perfusion and HbA1c below 12%.

Coverage pathway:
The proposed LCD routes through the DME oxygen benefit, not through Part B professional services. Claims would be billed by a DME supplier, not by the treating podiatrist’s practice under Part B.

Status:
This is a proposed rule. The comment period closed September 5, 2026. No coverage changes take effect until the LCD is finalized, which could take several months.

Documentation requirement:
If finalized, an in-person practitioner visit with wound measurement against a defined baseline would be required every month for continued coverage.

What Changed in Podiatry Wound Care Coverage

On July 23, 2026, the four Durable Medical Equipment Medicare Administrative Contractors posted a proposed revision to the Oxygen and Oxygen Equipment LCD (DL33797). The revision would add a new coverage group, Group V, specifically for topical oxygen therapy used to treat non-healing diabetic foot ulcers.

This marks the first time any Medicare coverage pathway has been formally proposed for topical oxygen in wound care since CMS removed topical oxygen from the National Coverage Determination for Hyperbaric Oxygen Therapy (NCD 20.29) in 2017. That removal did not deny coverage. It handed the coverage decision to the MACs through the Local Coverage Determination process.

The proposed LCD was released by CGS Administrators, which covers DME Jurisdictions B and C, and Noridian Healthcare Solutions, which covers Jurisdictions A and D. Because those four jurisdictions span the entire country, a finalized LCD would apply to every state. The public comment period ran from July 23 through September 5, 2026. APMA announced it would submit comments on behalf of its members.

For podiatry practices that treat diabetic foot ulcers, this development opens a potential new covered treatment option. But the coverage pathway, the documentation requirements, and the benefit category are different from what most billing teams are used to handling for wound care services.

Does the Proposed LCD Apply to All Podiatry Wound Care Patients?

The proposed LCD does not cover all chronic wounds. It applies exclusively to diabetic foot ulcers classified as Wagner Grade 1 or 2 that have failed to heal after four consecutive weeks of optimized standard care. Wagner Grade 3 and above, which involve deep tissue infection, osteomyelitis, or gangrene, are explicitly excluded from coverage under this proposal.

This distinction matters for two reasons. First, hyperbaric oxygen therapy under NCD 20.29 requires Wagner Grade 3 or higher. The proposed topical oxygen LCD stops where hyperbaric coverage begins. The two policies meet at the same clinical boundary from opposite sides. Second, the proposed LCD excludes coverage for venous leg ulcers, pressure injuries, surgical wounds, and burns, even though manufacturer labeling for topical oxygen products may list those indications.

In our experience matching providers with billing partners, wound care documentation errors remain one of the top drivers of podiatry claim denials. The specificity of this proposed LCD means the documentation requirements are tighter than what many practices currently maintain for routine wound care visits.

The specific patient eligibility criteria under the proposed LCD are:

Criteria	Requirement	Billing Impact
Diagnosis	Non-gestational diabetes mellitus with DFU	ICD-10 must specify diabetes type and DFU laterality
Healing threshold	Less than 50% area reduction after 4 weeks of optimized care	Weekly wound measurements must be documented before TOT starts
HbA1c	Below 12% within 3 months prior	Lab result must be on file with date
Arterial perfusion	ABI > 0.7 or toe pressure > 30 mmHg or TcPO2 > 30 mmHg + SPP > 30	Vascular study results must be in the record
Wound grade	Wagner Grade 1 or 2 only	Grade 3+ excluded; those route to NCD 20.29 (HBO)
Ongoing care	Patient must continue optimized DFU care	Standard care documentation must continue alongside TOT

Why CMS Opened the Door to Topical Oxygen

The path to this proposed LCD started in 2017 when CMS removed topical oxygen therapy from the Hyperbaric Oxygen Therapy NCD (20.29). CMS did not deny coverage. Instead, it determined that no National Coverage Determination was appropriate and handed the coverage decision to the MACs through the LCD process.

Since that 2017 decision, the evidence base has grown. The 2023 International Working Group on the Diabetic Foot guideline advises considering topical oxygen as an adjunct for diabetes-related foot ulcers that have not healed with standard care alone, though it grades the recommendation as conditional on low-certainty evidence. The American Diabetes Association’s 2026 Standards of Care names topical oxygen therapy alongside negative-pressure wound therapy and skin substitutes as adjunctive treatments to consider for chronic diabetic foot ulcers that have failed optimal standard care.

The proposed LCD itself is candid about the evidence quality. Using the GRADE framework, it reports low to very low certainty across available studies. But it also notes that for refractory diabetic foot ulcers, treatment options are limited and all lack robust evidence, and that the risk of undesirable effects from topical oxygen is consistently low.

The practical takeaway for podiatry practices: this proposed LCD is not an endorsement of topical oxygen as a first-line therapy. It is a structured coverage pathway for a specific subset of non-healing diabetic foot ulcers where standard care alone has not been enough.

How Would Topical Oxygen Therapy Be Billed Under Medicare?

This is where the proposed LCD introduces a billing workflow that differs from most wound care services podiatry practices currently handle. The proposed coverage routes through the DME oxygen benefit, not through Part B professional services. That distinction changes who bills, what codes are used, and how the payment flows.

Under the proposal, topical oxygen equipment and supplies would be furnished by a DME supplier and billed to a DME MAC. The reimbursement would be a bundled monthly rental payment that covers both inhaled and topical oxygen modalities. This is not a per-application or per-square-centimeter payment. It is a monthly allowance billed by the supplier.

For the podiatrist’s practice, the role is prescribing and documenting, not billing the TOT claim directly. The treating practitioner must complete an in-person visit for the initial month and every month thereafter, documenting that the patient continues to meet the coverage criteria. That monthly visit and measurement are what the DME supplier’s claim depends on.

Providers often come to us after running into coverage issues with wound care claims where the documentation did not match the payer’s requirements. If this LCD is finalized, the monthly measurement and comparison against a defined baseline will be the single most important compliance element. A missed month does not just create a gap in the record. It removes the coverage basis for that month entirely.

What Should Podiatry Practices Do Now?

The proposed LCD is not final, but the documentation standards it outlines reflect the direction Medicare oversight is heading for wound care. Practices that treat diabetic foot ulcers should prepare now regardless of the final timeline. Here are the steps to take:

1. Audit your wound measurement workflow. The proposed LCD requires length-by-width wound area measurements documented at each visit, with progress compared against a defined baseline. If your team measures wounds inconsistently or uses subjective descriptors instead of numeric measurements, that gap must close before any new coverage policy takes effect.
2. Verify your vascular assessment documentation. Coverage eligibility requires documented adequate arterial perfusion using specific thresholds: ABI above 0.7, toe pressure above 30 mmHg, or TcPO2 above 30 mmHg with SPP above 30. These results must be in the patient record before topical oxygen therapy begins.
3. Confirm your HbA1c documentation protocol. A lab result dated within three months before starting therapy, with a value below 12%, must be on file. If your practice does not routinely track when the most recent HbA1c was drawn relative to wound care initiation, build that checkpoint into your intake process.
4. Establish a monthly reassessment schedule. The proposed LCD requires an in-person visit every month with documented wound area reduction of at least 20% from the prior month or improvement in wound classification. Set recurring 30-day follow-up appointments for DFU patients from the start.
5. Clarify your DME supplier relationships. Since the TOT claim is billed by a DME supplier, not by the podiatrist’s practice under Part B, you need a supplier relationship in place. Identify which DME suppliers in your area can furnish topical oxygen equipment and determine the coordination workflow between your clinical documentation and their claims.
6. Separate topical oxygen from hyperbaric oxygen in your coding references. Topical oxygen therapy under the proposed LCD and hyperbaric oxygen therapy under NCD 20.29 are different treatments, different coverage pathways, and different benefit categories. Make sure your billing team understands the distinction so claims are routed correctly.

Common Misreadings of This Proposed LCD

Because this proposed LCD has generated significant attention in the wound care industry, several points of confusion are already circulating that podiatry practices should be aware of.

The most common misreading is treating this as a CMS decision. It is not. CMS issues National Coverage Determinations. MACs issue Local Coverage Determinations. The proposed LCD originated from CGS Administrators and Noridian Healthcare Solutions, the four DME MACs, not from CMS directly.

The second common error is assuming the proposed coverage applies to all wound types. It does not. Only non-healing diabetic foot ulcers classified as Wagner Grade 1 or 2 are covered under the proposal. Venous leg ulcers, pressure injuries, and surgical wounds are excluded even if a topical oxygen product is FDA-cleared for those indications.

The third misreading is treating topical oxygen as equivalent to or interchangeable with hyperbaric oxygen therapy. They are clinically different treatments governed by different coverage documents. The proposed topical oxygen LCD covers Wagner Grade 1 and 2 ulcers. Hyperbaric oxygen therapy under NCD 20.29 requires Wagner Grade 3 or higher. One question we hear constantly from practice managers is whether the same patient can receive both. The answer is that the coverage documents draw a line at the same clinical boundary, so the patient would typically qualify for one or the other based on wound severity, not both simultaneously.

Finally, some supplier representatives have suggested that topical oxygen is “now covered” by Medicare. That is premature. The LCD is proposed, not finalized. Ordering and billing on the basis of proposed coverage creates a denial the practice or supplier absorbs.

In-House Wound Care vs. Outsourced Billing

The proposed topical oxygen LCD adds a layer of complexity to podiatry wound care billing that reinforces the case for specialized billing support. The documentation requirements are monthly, measurement-specific, and tied to defined baselines and thresholds. Missing a single element in a single month can eliminate coverage for that month entirely.

In our experience matching providers with billing partners, practices that handle wound care billing in-house often do well with standard E/M and procedure coding but struggle when a new coverage pathway introduces unfamiliar documentation requirements, benefit categories, or DME supplier coordination. This proposed LCD touches all three.

A billing partner with wound care experience can help bridge the gap between the clinical documentation the podiatrist creates and the compliance requirements the DME supplier’s claim depends on. Across the billing companies we vet, a recurring pattern is that wound care denial rates drop significantly when the billing team understands exactly which measurements, lab values, and visit dates the payer will look for on audit.

Frequently Asked Questions

Next Steps

• Review the proposed LCD (DL33797) on the CMS Medicare Coverage Database to understand the full eligibility criteria and exclusions.
• If your practice treats diabetic foot ulcers, begin tightening wound measurement documentation protocols now, regardless of when the LCD is finalized. For a deeper look at how the CY 2027 fee schedule changes affect podiatry revenue alongside new coverage developments, read our recent analysis.
• Connect with a billing partner through Podiatry Bill Co who specializes in podiatry wound care documentation and can help your practice prepare for new coverage pathways.