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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101.
The rules say continued coverage of a PAP device (E0470 or E0601) beyond the first three months of therapy requires that, no sooner than the 31st day but no later than the 91st day after initiating therapy, the treating practitioner must conduct a clinical re-evaluation and document that the beneficiary is benefiting from PAP therapy. For PAP devices with initial dates of service on or after November 1, 2008, documentation of clinical benefit is demonstrated by: 1. In-person clinical re-evaluation by the treating practitioner with documentation that symptoms of obstructive sleep apnea are improved; and, 2. Objective evidence of adherence to use of the PAP device, reviewed by the treating practitioner. Adherence to therapy is defined as use of PAP equals 4 hours per night on 70% of nights during a consecutive thirty (30) day period anytime during the first three (3) months of initial usage. If the above criteria are not met, continued coverage of a PAP device and related accessories will be denied as not reasonable and necessary. If the treating practitioner re-evaluation does not occur until after the 91st day but the evaluation demonstrates that the beneficiary is benefiting from PAP therapy as defined in criteria 1 and 2 above, continued coverage of the PAP device will commence with the date of that re-evaluation. Beneficiaries who fail the initial 12-week trial are eligible to re-qualify for a PAP device but must have both: 1. In-person clinical re-evaluation by the treating practitioner to determine the etiology of the failure to respond to PAP therapy; and, 2. Repeat sleep test in a facility-based setting (Type 1 study). This may be a repeat diagnostic, titration or split-night study. If an E0601 device is tried and found ineffective during the initial facility-based titration or home trial, substitution of an E0470 does not change the length of the trial unless there is less than 30 days remaining in the trial period. If more than 30 days remain in the trial period, the clinical re-evaluation would still occur between the 31st and 91st day following the initiation of an E0601 and objective documentation of adherence on the E0470 would need to occur prior to the 91st day following initiation of the E0601. If less than 30 days remain in the trial period, the clinical re-evaluation and objective documentation of adherence must occur before the 120th day following the initiation of the E0601. If an E0601 device was used for more than 3 months and the beneficiary was then switched to an E0470, the clinical re-evaluation must occur between the 31st and 91st day following the initiation of the E0470. There would also need to be documentation of adherence to therapy during the 3-month trial with the E0470. If there is discontinuation of usage of a PAP device at any time, the supplier is expected to ascertain this and stop billing for the equipment and related accessories and supplies. For a PAP device dispensed prior to November 1, 2008, if the initial Medicare coverage criteria in effect at the time were met and the criteria for coverage after the first 3 months that were in effect at the time were met, the device will continue to be covered for dates of service on or after November 1, 2008 as long as the beneficiary continues to use the device. You can find this information in Medicare's Local Coverage Determination (LCD): Positive Airway Pressure (PAP) Devices for the Treatment of Obstructive Sleep Apnea (L33718).
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.