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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 Chronic Wounds are defined as wounds that do not respond to standard wound treatment for at least a 30-day period during organized comprehensive conservative therapy. For all wounds, documentation (as outlined in the documentation requirements of the policy) and a comprehensive treatment plan, before initiation of a specialized wound therapy product is required. For purposes of this LCD a Failed Response is defined as an ulcer or skin deficit that has failed to respond to documented appropriate wound-care measures, has increased in size or depth, or has not changed in baseline size or depth and has no indication that improvement is likely (such as granulation, epithelialization or progress towards closing). Medicare covers application of skin substitutes to Ulcers or Wounds with Failed Response that are: Partial- or full-thickness ulcers, not involving tendon, muscle, joint capsule or exhibiting exposed bone or sinus tracts, with a clean granular base; Skin deficit at least 1.0 square centimeter (cm) in size; Clean and free of necrotic debris or exudate; Have adequate circulation/oxygenation to support tissue growth/wound healing as evidenced by physical examination (e.g., Ankle-Brachial Index [ABI] of no less than 0.60, toe pressure greater than 30 millimeters of mercury [mmHg]); For diabetic foot ulcers, the patient's medical record reflects a diagnosis of Type 1 or Type 2 Diabetes and also reflects medical management for this condition. Wound healing is impaired by the systemic use of tobacco. Therefore, ideally patients who have smoked will have ceased smoking or have refrained from systemic tobacco intake for at least 4 weeks during conservative wound care and prior to planned bioengineered skin replacement therapy. Documentation (in the pre-service record) specifically addressing circumstances as to why the wound has failed to respond to standard wound care treatment of greater than 4 weeks and must reference specific interventions that have failed. Such record should include updated medication history, review of pertinent medical problems that may have occurred since the previous wound evaluation, and explanation of the planned skin replacement surgery with choice of skin substitute graft product. The procedure risks and complications should also be reviewed and documented. Documentation of smoking cessation counseling and cessation measures prescribed, if applicable, must also be
documented in the patient's record. Application of a skin substitute graft for lower extremity chronic wound (DFU and VLU) will be covered when the following conditions are met for the individual patient: Presence of neuropathic diabetic foot ulcer(s) having failed to respond to documented conservative wound-care measures of greater than four weeks, during which the patient is compliant with recommendations, and without evidence of underlying osteomyelitis or nidus of infection. Presence of a venous stasis ulcer for at least 3 months but unresponsive to appropriate wound care for at least 30 days with documented compliance. Presence of a full thickness skin loss ulcer that is the result of abscess, injury or trauma that has failed to respond to appropriate control of infection, foreign body, tumor resection, or other disease process for a period of 4 weeks or longer. In all wound management the ulcer must be free of infection and underlying osteomyelitis with documentation of the conditions that have been treated and resolved prior to the institution of skin substitute therapy. For purposes of this LCD, appropriate therapy includes, but is not limited to: Control of edema, venous hypertension or lymphedema Control of any nidus of infection or colonization with bacterial or fungal elements Elimination of underlying cellulitis, osteomyelitis, foreign body, or malignant process Appropriate debridement of necrotic tissue or foreign body (exposed bone or tendon) For diabetic foot ulcers, appropriate non-weight bearing or off-loading pressure For venous stasis ulcers, compression therapy provided with documented diligent use of multilayer dressings, compression stockings of greater than 20 mmHg pressure, or pneumatic compression Provision of wound environment to promote healing (protection from trauma and contaminants, elimination of inciting or aggravating processes) You can find this information in Medicare's Local Coverage Determination (LCD): Application of Bioengineered Skin Substitutes to Lower Extremity Chronic Non-Healing Wounds (L35041).
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.