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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 medically necessary services are those that are reasonable and necessary for the diagnosis or 
treatment of an illness or injury. Medically necessary services include services to improve the functioning of a 
malformed body member. You can find this rule in the Social Security Act, Section 1862(a)(1)(A). 
 
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). 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.