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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 ventilators may be covered when they are medically necessary for patients who have neuromuscular disease, thoracic restrictive diseases, and chronic respiratory failure due to chronic obstructive pulmonary disease (COPD). You can find this rule in the Centers for Medicare and Medicaid Services, Internet Only Manual, Publication 100-03, Medicare National Coverage Determinations Manual, Chapter 1, Section 280.1. The rules also say that the decision to use a ventilator or a bi-level positive airway pressure device is made based upon the specifics of each person's medical condition. There must be enough detailed information in the medical record to justify the treatment selected. You can find this rule in the Local Coverage Determination (LCD): Respiratory Assist Devices (L33800). The rules say in this policy, the term PAP (positive airway pressure) device will refer to both a single-level continuous positive airway pressure device (E0601) and a bi-level respiratory assist device without back-up rate (E0470) when it is used in the treatment of obstructive sleep apnea. I. An E0601 device is covered for the treatment of obstructive sleep apnea (OSA) if criteria A - C are met: A. The beneficiary has an in-person clinical evaluation by the treating practitioner prior to the sleep test to assess the beneficiary for obstructive sleep apnea. B. The beneficiary has a sleep test (as defined below) that meets either of the following criteria (1 or 2): 1. The apnea-hypopnea index (AHI) or Respiratory Disturbance Index (RDI) is greater than or equal to 15 events per hour with a minimum of 30 events; or, 2. The AHI or RDI is greater than or equal to 5 and less than or equal to 14 events per hour with a minimum of 10 events and documentation of: a. Excessive daytime sleepiness, impaired cognition, mood disorders, or insomnia; or, b. Hypertension, ischemic heart disease, or history of stroke. C. The beneficiary and/or their caregiver has received instruction from the supplier of the device in the proper use and care of the equipment. If a claim for an E0601 is submitted and all of the criteria above have not been met, it will be denied as not reasonable and necessary. II. An E0470 device is covered for those beneficiaries with OSA who meet criteria A-C above, in addition to criterion D: D. An E0601 has been tried and proven ineffective based on a therapeutic trial conducted in either a facility or in a home setting. Ineffective is defined as documented failure to meet therapeutic goals using an E0601 during the titration portion of a facility-based study or during home use despite optimal therapy (i.e., proper mask selection and fitting and appropriate pressure settings). If E0470 is billed for a beneficiary with OSA and criteria A-D are not met, it will be denied as not reasonable and necessary. A bi-level positive airway pressure device with back-up rate (E0471) is not reasonable and necessary if the primary diagnosis is OSA. If an E0471 is billed with a diagnosis of OSA, it will be denied as not reasonable and necessary. If an E0601 device is tried and found ineffective during the initial facility-based titration or home trial, substitution of an E0470 does not require a new initial in-person clinical evaluation or a new sleep test. If an E0601 device has been used for more than 3 months and the beneficiary is switched to an E0470, a new initial in-person clinical evaluation is required, but a new sleep test is not required. A new 3-month trial would begin for use of the E0470. Coverage, coding and documentation requirements for the use of E0470 and E0471 for diagnoses other than OSA are addressed in the Respiratory Assist Devices (RAD) Local Coverage Determination (LCD) and related Policy Article (PA). 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.