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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 state that covered indications include: 
 
1. For evaluation of an abnormality discovered on barium enema and/or other imaging technique that is likely 
  
  to be clinically significant, such as a filling defect or stricture or an inadequate examination; 
 
2. For evaluation of unexplained gastrointestinal (GI) bleeding;   
 
    Hematochezia not thought to be from rectum or perianal source 
    Melena of unknown origin 
    Presence of fecal occult blood 
 
3. For unexplained iron deficiency anemia; 
 
4. For surveillance of colonic neoplasia; 
 
    For examination to evaluate the entire colon for synchronous cancer or polyps in a patient with treatable 
cancer or polyps. 
    For follow-up 1 year after surgery for treatment of colorectal cancer when the patient is identified as being at 
high-risk for colon cancer and is eligible for continued screenings at 24-month intervals. 
    For follow-up at least 3-6 months after colonoscopic removal of a large sessile adenoma (i.e., greater than 2 
cm in greatest dimension). 
    For patients with Crohns colitis, chronic ulcerative colitis (UC), pancolitis of greater than 7 years duration 
or left-sided colitis of over 15 years duration (no surveillance needed for disease limited to rectosigmoid) may 
have a colonoscopy every 1-2 years for multiple biopsies to detect cancer and/or dysplasia. 
 
5. For chronic inflammatory bowel disease (IBD) of the colon (if a more precise diagnosis or if a determination 
of the extent of activity of disease will influence immediate management); 
 
6. For clinically significant diarrhea of unexplained origin with additional findings (e.g., weight loss or 
negative stool cultures persisting for more than 3 weeks); 
 
7. For intraoperative identification of the site of a lesion that cannot be detected by palpation or gross 
inspection at surgery (e.g., polypectomy site or location of a bleeding source); 
 
8. For evaluation of acute colonic ischemia/ischemic bowel disease; 
 
9. For evaluation of a patient with Streptococcus bovis (S. bovis) endocarditis or bacteremia; 
 
10 For treatment of bleeding from such lesions as vascular anomalies, ulceration and neoplasia; 
 
11. For removal of a foreign body; 
 
12. For excision of colonic polyps; 
 
13. For decompression of pseudo-obstruction of the colon (Olgilvies Syndrome) following a trial of 
neostigmine or cathartics or a documented reason that this would be either unsafe or inappropriate for the 
beneficiary; 
 
14. For treatment of colonic volvulus or stricture; 
 
15. For evaluation of an unexplained, new onset constipation, refractory to medical therapy; 
 
16. For evaluation of an anorectal polyp (adenomatous polyp only); or, 
 
17. For palliative treatment of stenosing, bleeding neoplasms (e.g., laser, electrocoagulation, stenting).  
You can find this information in the Local Coverage Determination (LCD) 
Colonoscopy/Sigmoidoscopy/Proctosigmoidoscopy L34454. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.