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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 payment for inpatient psychiatric hospital services is to be made only for active treatment. 
For services to be designated as active treatment they must: 
 
1. be provided under an individualized treatment or diagnostic plan; 
 
2. reasonably be expected to improve the patients condition, or for the purpose of diagnosis; and 
 
3. be supervised and evaluated by a physician.   
You can find these rules in the Centers for Medicare and Medicaid Services, Internet Only Manual, Publication 
100-02, Medicare Benefit Policy Manual, Chapter 2, Sections 30.2.2 and 30.2.2.1. 
 
The rules say that Medicare will not pay any expenses for items or services which are not medically necessary 
and reasonable for the diagnosis or treatment of illness or injury. This exclusion extends to claims for services 
which are provided in inappropriate settings. You can find this rule in the Social Security Act, Section 
1862(a)(1). 
 
The rules say many hospitals provide detoxification services during the more acute stages of alcoholism or 
alcohol withdrawal. When the high probability or occurrence of medical complications (e.g., delirium, 
confusion, trauma, or unconsciousness) during detoxification for acute alcoholism or alcohol withdrawal 
necessitates the constant availability of physicians and/or complex medical equipment found only in the 
hospital setting, inpatient hospital care during this period is considered reasonable and necessary and is 
therefore covered under the program. Generally, detoxification can be accomplished within two to three days 
with an occasional need for up to five days where the patients condition dictates. This limit (five days) may be 
extended in an individual case where there is a need for a longer period for detoxification for a particular 
patient. 
 
In such cases, however, there should be documentation by a physician which substantiates that a longer period 
of detoxification was reasonable and necessary. When the detoxification needs of an individual no longer 
require an inpatient hospital setting, coverage should be denied on the basis that inpatient hospital care is not 
reasonable and necessary as required by 1862(a)(l) of the Social Security Act (the Act). Following 
detoxification, a patient may be transferred to an inpatient rehabilitation unit or discharged to a residential 
treatment program or outpatient treatment setting. 
 B. Inpatient Hospital Stay for Alcohol Rehabilitation 
 
Hospitals may also provide structured inpatient alcohol rehabilitation programs to the chronic alcoholic. These 
programs are composed primarily of coordinated educational and psychotherapeutic services provided on a 
group basis. Depending on the subject matter, a series of lectures, discussions, films, and group therapy 
sessions are led by either physicians, psychologists, or alcoholism counselors from the hospital or various 
outside organizations. In addition, individual psychotherapy and family counseling (see 70.1) may be 
provided in selected cases. These programs are conducted under the supervision and direction of a physician. 
Patients may directly enter an inpatient hospital rehabilitation program after having undergone detoxification in 
the same hospital or in another hospital or may enter an inpatient hospital rehabilitation program without prior 
hospitalization for detoxification. 
 
Alcohol rehabilitation can be provided in a variety of settings other than the hospital setting. In order for an 
inpatient hospital stay for alcohol rehabilitation to be covered under Medicare it must be medically necessary 
for the care to be provided in the inpatient hospital setting rather than in a less costly facility or on an outpatient 
basis. Inpatient hospital care for receipt of an alcohol rehabilitation program would generally be medically 
necessary where either (l) there is documentation by the physician that recent alcohol rehabilitation services in 
a less intensive setting or on an outpatient basis have proven unsuccessful and, as a consequence, the patient 
requires the supervision and intensity of services which can only be found in the controlled environment of the 
hospital, or (2) only the hospital environment can assure the medical management or control of the patients 
concomitant conditions during the course of alcohol rehabilitation. (However, a patients concomitant 
condition may make the use of certain alcohol treatment modalities medically inappropriate.) You can find this 
information in Medicare's National Coverage Determination (NCD): Inpatient Hospital Stays for Treatment of 
Alcoholism (130.1). 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.