How Medicare's 13 Month CPAP Capped Rental Works

Updated October 2026. Written by Matteo Grassi, cofounder of HANA Health, trained in psychology.

Medicare's CPAP capped rental is a payment rule that pays a supplier a monthly rental fee for a CPAP device for up to 13 continuous months, then ends rental payments and transfers ownership to the patient. Months 1 to 3 pay the full rental rate, and months 4 to 13 pay 75% of it. In 2026, the non-rural rate is about $50 to $53 a month.

I've spent years on the patient side of the phone call that decides whether someone keeps using their therapy. The rental clock doesn't care about that call, but your revenue depends on it.

Key facts

• CPAP devices (HCPCS E0601) fall in the capped rental payment category, which pays monthly rent for up to 13 continuous months. Source: Medicare Claims Processing Manual, Chapter 20.
• Months 1 to 3 pay 10% of the average purchase price. Months 4 to 13 pay 7.5%, which is 75% of the early rate. Source: CGS Medicare, DMEPOS payment categories.
• After 13 paid rental months, title passes to the beneficiary on the first day after the last rental month. Source: Noridian JD DME, capped rental items.
• Claims use modifiers KH for month 1, KI for months 2 and 3, and KJ for months 4 to 13. Source: Noridian JD DME.
• Continued coverage after month 3 needs the adherence and re-evaluation criteria in LCD L33718, revised effective January 2024.
• The 2026 non-rural E0601 rental amounts I checked run from $50.04 to $52.65 a month across the contiguous states. Source: CMS DMEPOS fee schedule files for 2026.
• In a 2024 study of 213,341 commercially insured patients, 48% met the CMS adherence standard in all four quarters of year one. Source: Alpert et al., Chest, 2024.

What is the 13 month CPAP capped rental?

It's the way Medicare pays for a CPAP machine. Instead of buying the device outright, Medicare pays a monthly rental fee, and the supplier owns the machine until month 13.

CPAP and auto CPAP devices are classed as capped rental items. The payment rules say the supplier bills each month of continuous use, up to a cap of 13 paid months. After that, no more rental payments are made.

The cap is about payment, not about how long the patient uses therapy. A patient who keeps using the machine in month 14 owns it. The supplier can still bill separately for accessories and supplies, such as masks, tubing and filters, because those are paid on their own schedule. Our CPAP resupply schedule guide walks through that side.

Continuous use matters too. The claims manual treats medical necessity as ongoing unless there's a break in need of at least 60 days. A short gap in therapy doesn't reset the clock, but a long one can.

How much does Medicare pay for CPAP rental each month?

For 2026, the published non-rural amount for a CPAP rental (E0601 with the RR modifier) ranges from $50.04 to $52.65 a month in the contiguous states, depending on your state. Rural ZIP codes pay more, and amounts outside the contiguous states differ.

Two rates apply to every rental:

• Months 1 to 3: the full monthly rental rate, set at 10% of the average allowed purchase price.
• Months 4 to 13: 75% of the full rate, set at 7.5% of the average allowed purchase price.

Medicare pays 80% of the allowable amount after the Part B deductible, and the patient owes the 20% coinsurance. That split affects collections, not the schedule.

Amounts change. CMS publishes the DMEPOS fee schedule quarterly, with 2026 files released in January, April, July and October. Always price the claim from the file and modifier on your own claim, using the ZIP code that prices it.

What does a 13 month rental look like in dollars?

Here's the arithmetic, using the lowest and highest non-rural amounts I found for 2026. This is an illustration of the schedule, not a forecast of what your business will collect.

Lower end: $50.04 a month for months 1 to 3

1. Months 1 to 3: 3 × $50.04 = $150.12.
2. Months 4 to 13 rate: $50.04 × 0.75 = $37.53 a month.
3. Months 4 to 13 total: 10 × $37.53 = $375.30.
4. Full rental: $150.12 + $375.30 = $525.42.

Higher end: $52.65 a month for months 1 to 3

1. Months 1 to 3: 3 × $52.65 = $157.95.
2. Months 4 to 13 rate: $52.65 × 0.75 = $39.49 a month, rounded.
3. Months 4 to 13 total: 10 × $39.4875 = $394.88, rounded.
4. Full rental: $157.95 + $394.88 = $552.83.

Look at the shape. About 29% of the lower end total arrives in the first three months, and about 71% arrives in months 4 to 13. The longer, lower paying stretch is where a patient's adherence decides whether you get paid at all.

What happens at month 13?

Rental payments stop, and the supplier must transfer ownership to the beneficiary on the first day after the last paid rental month. After that, Medicare pays for reasonable and necessary maintenance and servicing of the device, meaning parts and labor not covered by a warranty.

For a supplier, month 13 changes the revenue mix. The device stops paying. What keeps paying is the supply line: masks, cushions, tubing, filters and the humidifier chamber, each on its own replacement schedule.

Medicare also sets its own rules about when a patient can get a replacement device. Those rules are separate from the rental clock, so check the LCD and policy article before you plan around a replacement.

Why does adherence matter during the rental window?

Because coverage after month 3 depends on it. Continued coverage needs the patient to have used PAP for at least 4 hours a night on at least 70% of nights in a consecutive 30 day window during the first 3 months, plus a face to face re-evaluation between day 31 and day 91 that documents symptom improvement. Our CPAP compliance requirements guide covers the full test, and the re-evaluation guide covers the visit.

Without that documentation, the KX modifier can't be added from month 4 onward, and the claims are at risk. Many suppliers hold the month 4 claim until the paperwork arrives.

The hard part is how common partial adherence is. In the Alpert study, 48% of patients met the CMS standard in every quarter of year one, 30% met it in some quarters, and 22% met it in none. That study was in commercially insured adults aged 18 to 64, so it isn't a Medicare population. It does show how much use drifts over a year, even among people who started therapy.

Be careful with the lesson here. The study measured device use, and it tells you adherence varies. It doesn't tell you what intervention would change it.

What this means for your DME

The 13 month cap makes months 4 to 13 your exposure window. Here are practical steps:

1. Map each patient's rental month, so you know who is in the 75% stretch and who is about to age out.
2. Track the day 31 to 91 re-evaluation date as closely as you track the delivery date.
3. Check device data for the 4 hours on 70% of nights test before the first 30 day window closes, not after.
4. Plan for month 14 and beyond, when supplies replace the rental as your recurring revenue.

At HANA, we build outreach for sleep and PAP therapy teams that supports patients between the visits and the device downloads. You can read more on the HANA sleep page. The rental rules above apply whether or not you use any outreach tool.

Frequently asked questions

Does the patient own the CPAP machine after 13 months?

Yes. After 13 paid rental months, the supplier must transfer title to the beneficiary. Medicare then pays for reasonable and necessary maintenance and servicing.

Is the 13 month rule the same for bilevel devices?

Bilevel devices without a backup rate (E0470) and with a backup rate (E0471) are also capped rental items. Coverage criteria differ by device, so check the LCD for the code you bill.

What if a patient stops using CPAP during the rental period?

A break in need of at least 60 days can end the continuous use period under the claims manual. Shorter gaps don't reset the clock, but poor adherence can still put continued coverage at risk.

Do commercial payers use the same 13 month cap?

Many follow a rent to own model, but rules vary by plan and policy. Verify each payer's current guidelines, because adherence checks and rental terms differ.

Can I bill for supplies during the rental months?

Accessories are separately reimbursable at initial issue and when replaced, under the policy article for the LCD. Frequency limits apply, so follow the resupply schedule.

Sources

1. Centers for Medicare & Medicaid Services, Medicare Claims Processing Manual, Chapter 20, Durable Medical Equipment.
2. Centers for Medicare & Medicaid Services, Local Coverage Determination L33718, Positive Airway Pressure Devices for the Treatment of Obstructive Sleep Apnea, revised 2024.
3. Centers for Medicare & Medicaid Services, Policy Article A52467 for PAP devices.
4. Centers for Medicare & Medicaid Services, DMEPOS Fee Schedule Files, 2026.
5. CGS Administrators, DMEPOS Fee Schedule Categories, Chapter 5.
6. Noridian Healthcare Solutions, Capped Rental Items, JD DME.
7. Alpert N, Cole KV, Dexter RB, Sterling KL, Wickwire EM, Performance of Claims Based Algorithms for Adherence to Positive Airway Pressure Therapy in Commercially Insured Patients With OSA, Chest, 2024.

This article is educational and isn't billing, coding, clinical or legal advice. Check current CMS guidance and your MAC before you bill. If you run a DME or sleep program and want to talk through adherence outreach, book a discovery call.