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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 Indications and Limitations of Coverage: 
 
Two general classifications of electrical nerve stimulators are employed to treat chronic intractable pain: 
peripheral nerve stimulators and central nervous system stimulators. 
 
A. Implanted Peripheral Nerve Stimulators 
 
Payment may be made under the prosthetic device benefit for implanted peripheral nerve stimulators. Use of 
this stimulator involves implantation of electrodes around a selected peripheral nerve. The stimulating 
electrode is connected by an insulated lead to a receiver unit which is implanted under the skin at a depth not 
greater than 1/2 inch. 
 
Stimulation is induced by a generator connected to an antenna unit which is attached to the skin surface over 
the receiver unit. Implantation of electrodes requires surgery and usually necessitates an operating room. 
 
NOTE: Peripheral nerve stimulators may also be employed to assess a patients suitability for continued 
treatment with an electric nerve stimulator. As explained in 160.7.1, such use of the stimulator is covered as 
part of the total diagnostic service furnished to the beneficiary rather than as a prosthesis. 
 
B. Central Nervous System Stimulators (Dorsal Column and Depth Brain Stimulators) 
 
The implantation of central nervous system stimulators may be covered as therapies for the relief of chronic 
intractable pain, subject to the following conditions: 
 
1. Types of Implantations 
 
There are two types of implantations covered by this instruction: 
 
    Dorsal Column (Spinal Cord) Neurostimulation - The surgical implantation of neurostimulator electrodes within the dura mater (endodural) or the percutaneous insertion of electrodes in the epidural space is covered. 
    Depth Brain Neurostimulation - The stereotactic implantation of electrodes in the deep brain (e.g., thalamus 
and periaqueductal gray matter) is covered. 
 
2. Conditions for Coverage 
 
No payment may be made for the implantation of dorsal column or depth brain stimulators or services and 
supplies related to such implantation, unless all of the conditions listed below have been met: 
 
    The implantation of the stimulator is used only as a late resort (if not a last resort) for patients with chronic 
intractable pain; 
    With respect to item a, other treatment modalities (pharmacological, surgical, physical, or psychological 
therapies) have been tried and did not prove satisfactory, or are judged to be unsuitable or contraindicated for 
the given patient; 
    Patients have undergone careful screening, evaluation and diagnosis by a multidisciplinary team prior to 
implantation. (Such screening must include psychological, as well as physical evaluation); 
    All the facilities, equipment, and professional and support personnel required for the proper diagnosis, 
treatment training, and follow up of the patient (including that required to satisfy item c) must be available; and 
    Demonstration of pain relief with a temporarily implanted electrode precedes permanent implantation. 
 
Medicare Administrative Contractors may find it helpful to work with Quality Improvement Organizations to 
obtain the information needed to apply these conditions to claims. You can find this information in Medicare's 
National Coverage Determination (NCD): Electrical Nerve Stimulators (160.7). 
 
The rules say that the implantation of spinal cord stimulators (SCS) may be covered as therapies for the relief 
of chronic intractable pain. SCS is best suited for neuropathic pain, but may have some limited value in other 
types of nociceptive severe, intractable pain. Therapy consists of a short trial with a percutaneous implantation 
of neurostimulator electrode(s) in the epidural space for assessing a patients suitability for ongoing treatment 
with a permanent surgically implanted nerve stimulator. Performance and documentation of an effective trial is 
a prerequisite for permanent nerve stimulation. 
 
Selection of patients for implantation of SCS is critical to success of this therapy. SCS therapy should be 
considered as a late option after more conservative attempts, such as medications, physical therapy, 
psychological therapy or other modalities have been tried. 
 
Patients must have undergone careful screening, evaluation and diagnosis by a multidisciplinary team prior to 
implantation. (Such screening must include psychological, as well as, physical evaluation). Documentation of 
the history and careful screening must be available in the patient chart if requested. 
 
Many experts recommend that the temporary neurostimulator be placed in an Ambulatory Surgical Center 
(ASC) or outpatient hospital setting. However, the temporary neurostimulator trial can be done in an office 
setting if all the sterility, equipment, professional training and support personnel required for the proper 
surgery, and follow up of the patient are available. Permanent neurostimulators must be placed in an ASC or 
hospital. Physicians performing SCS trials in the office setting must have like privileges at a local hospital or 
ASC, or the providers must be subspecialty boarded in Pain Medicine by the American Board of 
Anesthesiology. 
 
It is preferable that physicians performing the SCS trial will also perform the permanent implant. If the 
physician implanting the trial neurostimulator does not or cannot implant the permanent neurostimulator, the 
patient should be informed of this in writing and given the name of the referral surgeon, who will implant the 
permanent neurostimulator(s). It is expected that accurate patient selection will lead to most patients going on 
to receive permanent implants.  
Only patients who experience a positive response to a trial should proceed to a permanent implantation. All 
trials which proceed to permanent implant must have adequate documentation in the chart to support that 
decision. A successful trial should be associated with at least a 50% reduction of target pain, or 50% reduction 
of analgesic medications, and show some element of functional improvement. (Patients with reflex sympathetic 
dystrophy may show lower levels of improvement, since it takes longer periods for improvement than the 
typical 1-to-2-week trial). Physician judgment and experience will also be taken into account. Physicians with a 
low trial to permanent implant ratio (less than 50%) may/can/will be subject to post-payment review and may 
be asked to submit documentation as to the patient selection criteria, the radiologic imaging demonstrating 
proper lead placement, and the medical necessity of the trials. Failure to provide this documentation will be 
cause for post-payment denial and recoupment of reimbursement. It is understood that all patients may not have 
a favorable result of the trial implant; but careful selection should find the most appropriate patients. You can 
find this information in Medicare's Local Coverage Determination (LCD): Spinal Cord Stimulators for Chronic 
Pain (L37632). 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.