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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 Covered Indications 
 
All of the following criteria must be met for the application of a skin substitute graft/CTP for lower extremity 
DFU or VLU to be considered medically reasonable and necessary: 
 
   1. The presence of a chronic, non-infected diabetic foot ulcer (DFU) or chronic, non-infected venous leg 
ulcer (VLU) having failed to respond to documented standard of care treatment (outlined below) for a 
minimum of four weeks (defined as 30 days) with documented compliance to prescribed treatment.7,10 
   2. Failure to respond to documented standard of care treatment is defined as an ulcer that has increased in size 
or depth, or no change in baseline size or depth, or no sign of improvement, or no indication that improvement 
is likely (such as granulation, epithelialization, or progress towards closing). Documentation of response 
requires measurements of the initial ulcer, measurements at the completion of at least four weeks of standard of 
care treatment, and measurements immediately prior to placement of the skin substitute graft/CTP for DFUs 
and VLUs. For VLUs, standard of care treatment must continue for no less than four weeks and include on-
going compression therapy. 
   3. Standard of care treatment includes, but is not limited to, the following: 
        Comprehensive patient assessment (history, exam, Ankle-Brachial Index [ABI]) and diagnostic tests as 
indicated) and implemented treatment plan. 
        For patients with a DFU - assessment of Type 1 vs. Type 2 diabetes and management history with 
attention to certain comorbidities (e.g., vascular disease, neuropathy, osteomyelitis), review of current blood 
glucose levels/hemoglobin A1c (HbA1c), diet and nutritional status, activity level, physical exam that includes 
assessment of skin and ulcer, ABI, and check of off-loading device or assessment of appropriate footwear.3 
        For patients with a VLU - assessment of clinical history (prior ulcers, thrombosis risks), physical exam 
(edema, skin changes), ABI, diagnostic testing to verify superficial or deep venous reflux, perforator 
incompetence, and chronic (or acute) venous thrombosis. 
   4. The implemented treatment demonstrates all of the following: 
        Debridement as appropriate. 
        Some form of offloading for DFUs. 
        Some form of compression for VLUs.         Infection control. 
        Management of exudate - maintenance of a moist environment (moist saline gauze, other classic 
dressings, bioactive dressing, etc.). 
        Documentation of smoking history, and that the patient has received counseling on the effect of smoking 
on surgical outcomes and treatment for smoking cessation (if applicable) as well as outcome of counselling (if 
applicable). 
   5. The skin substitute graft/CTP is utilized per the intended use as approved/regulated by the FDA. 
   6. The patient is under the care of a qualified physician/NPP for the treatment of the systemic disease 
process(es) etiologic for the condition (e.g., venous insufficiency, diabetes, neuropathy). 
 
You can find these rules in Local Coverage Determination (LCD) Skin Substitute grafts/Cellular and/or Tissue-
based products for the treatment of Diabetic foot ulcers and Venous leg ulcers (L35041). 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.