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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 that the covered indications for a wireless capsule endoscopy (WCE) include: 
1. WCE is indicated for the diagnosis of occult gastrointestinal bleeding (i.e., likely involving the small 
intestine), the site of which has not previously been identified by any of the following: upper gastrointestinal 
endoscopy, colonoscopy, push enteroscopy, nuclear imaging or radiological procedures. 
2. WCE is limited to those patients who have undergone upper GI endoscopy and colonoscopy and these tests 
have failed to reveal a source of bleeding. Medicare would not expect to see a WCE provided if upper and 
lower endoscopy has not previously been performed. Documentation in the medical record must indicate that 
the beneficiary has suspected GI blood loss with or without anemia. Appropriate differential diagnoses for the 
evaluation of such bleeding include: 
   Angiodysplasia 
   Neoplasm 
   Iron deficiency anemia, which is unexplained after upper and lower endoscopy 
   Zollinger-Ellison syndrome 
   Tuberculosis 
   Vasculitis 
   Radiation enteritis 
   Meckels diverticulum 
   Jejunal diverticula 
   Chronic mesenteric ischemia 
3. Other indications include the management of celiac disease (e.g., surveillance for small-intestinal cancer) 
and of Crohns disease (that is, either Crohns disease is suspected, but not diagnosed, or colonic involvement 
of Crohns disease is known, but it is necessary to determine whether there is also involvement of the small 
bowel). In addition, WCE is indicated where an indeterminate type of colitis exists, but where a more specific 
diagnosis is being sought via small bowel evaluation. 
4. Esophageal capsule endoscopy may be used in the evaluation of esophageal varices in patients with portal 
hypertension, as an alternative to upper GI endoscopy. 
 
The rules also say that in addition to any specific indications noted above, WCE is limited as follows: 
 
1. Erosive esophagitis and Barretts esophagus may be viable clinical indications in the future, but further peer-
reviewed literature is being sought before this additional coverage might become available. 
2. This test is not reimbursable for colorectal cancer screening. 
3. The test is payable only for services using FDA-approved devices. 4. This test is not reimbursable for the confirmation of lesions or pathology normally within the reach of upper 
or lower endoscopes (lesions proximal to the ligament of Treitz or distal to the ileum). 
5. This test is only covered when performed by physicians trained in endoscopy or for independent diagnostic 
testing facilities, which are under the general supervision of a physician trained in endoscopy procedures. 
6. Contraindications include: pregnancy, cardiac pacemaker and other implanted electro-medical devices, 
swallowing disorders, known or suspected GI obstruction, strictures or fistulas based on the clinical picture or 
pre-procedure testing. 
7. Medicare would not expect to see a second capsule administered per episode of illness unless it was to 
guarantee an adequate examination (e.g., the initial capsule does not penetrate the pylorus). Please note that any 
other procedure codes that are used to ensure proper passage of the capsule must be reasonable and necessary 
and documented appropriately. 
8. Medicare expects repeat wireless capsule endoscopic studies for any patient to be for medically reasonable 
and necessary clinical circumstances consistent with accepted standards of medical practice and that the 
medical records demonstrate such.  
 
You can find this information in the Local Coverage Determination (LCD) Wireless Capsule Endoscopy 
(L35089). 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.