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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 state that A lower limb prosthesis is covered when the beneficiary: 
1. Will reach or maintain a defined functional state within a reasonable period of time; and 
2. Is motivated to ambulate. 
FUNCTIONAL LEVELS: 
 
A determination of the medical necessity for certain components/additions to the prosthesis is based on the 
beneficiary's potential functional abilities. Potential functional ability is based on the reasonable expectations 
of the prosthetist, and treating practitioner, considering factors including, but not limited to: 
1. The beneficiary's past history (including prior prosthetic use if applicable); and 
2. The beneficiary's current condition including the status of the residual limb and the nature of other 
medical problems; and 
3. The beneficiary's desire to ambulate. 
Clinical assessments of beneficiary rehabilitation potential must be based on the following classification levels:  
 
Level 0: Does not have the ability or potential to ambulate or transfer safely with or without assistance and a 
prosthesis does not enhance their quality of life or mobility. 
 
Level 1: Has the ability or potential to use a prosthesis for transfers or ambulation on level surfaces at fixed 
cadence. Typical of the limited and unlimited household ambulator. 
 
Level 2: Has the ability or potential for ambulation with the ability to traverse low level environmental barriers 
such as curbs, stairs or uneven surfaces. Typical of the limited community ambulator. 
 
Level 3: Has the ability or potential for ambulation with variable cadence. Typical of the community ambulator 
who has the ability to traverse most environmental barriers and may have vocational, therapeutic, or exercise 
activity that demands prosthetic utilization beyond simple locomotion. 
 
Level 4: Has the ability or potential for prosthetic ambulation that exceeds basic ambulation skills, exhibiting 
high impact, stress, or energy levels. Typical of the prosthetic demands of the child, active adult, or athlete.  
 
The records must document the beneficiary's current functional capabilities and his/her expected functional 
potential, including an explanation for the difference, if that is the case. It is recognized, within the functional 
classification hierarchy, that bilateral amputees often cannot be strictly bound by functional level 
classifications. 
A determination of the type of knee for the prosthesis will be made by the treating practitioner and/or the 
prosthetist based upon the functional needs of the beneficiary. Basic lower extremity prostheses include a 
single axis, constant friction knee. Other prosthetic knees are considered for coverage based upon functional 
classification. 
 
A high activity knee control frame (L5930) is covered for beneficiaries whose functional level is 4. 
 
A fluid, pneumatic, or electronic/microprocessor knee (L5610, L5613, L5614, L5722, L5724, L5726, L5728, 
L5780, L5814, L5822, L5824, L5826, L5828, L5830, L5840, L5848, L5856, L5857, L5858) is covered for 
beneficiaries whose functional level is 3 or above. 
 
L5859 (Addition to lower extremity prosthesis, endoskeletal knee-shin system, powered and programmable 
flexion/extension assist control, includes any type motor(s)) is only covered when the beneficiary meets all of 
the criteria below: 
1. Has a microprocessor (swing and stance phase type (L5856)) controlled (electronic) knee 
2. K3 functional level only 
3. Has a documented comorbidity of the spine and/or sound limb affecting hip extension and/or 
quadriceps function that impairs K-3 level function with the use of a microprocessor-controlled knee 
alone 
4. Is able to make use of a product that requires daily charging 
5. Is able to understand and respond to error alerts and alarms indicating problems with the function of the 
unit 
A determination of the type of knee for the prosthesis will be made by the treating practitioner and/or the 
prosthetist based upon the functional needs of the beneficiary. Basic lower extremity prostheses include a 
single axis, constant friction knee. Other prosthetic knees are considered for coverage based upon functional 
classification. 
 
A high activity knee control frame (L5930) is covered for beneficiaries whose functional level is 4. 
 
A fluid, pneumatic, or electronic/microprocessor knee (L5610, L5613, L5614, L5722, L5724, L5726, L5728, 
L5780, L5814, L5822, L5824, L5826, L5828, L5830, L5840, L5848, L5856, L5857, L5858) is covered for 
beneficiaries whose functional level is 3 or above. 
A flex-walk system or equal (L5981) is covered for beneficiaries whose functional level is 3 or above. 
 
An axial rotation unit (L5986) is covered for beneficiaries whose functional level is 2 or above. 
 
You can find these rules in the Local Coverage Determination (LCD) for Lower Limb Prostheses, L33787 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.