Advanced beneficiary notice

You removed a benign mole because the patient complained that it was ugly. You bill for the services, but Medicare doesn’t pay for the mole removal. Now you’re stumped and left holding the bill. 

Is it covered?

To avoid reimbursement denials, you need to know which services are actually covered in the first place. If there is a service that is uncovered, such as one solely for cosmetic purposes, you must notify your patient — in advance of the procedure — that Medicare will not pay for the service.

Cosmetic surgery
The Centers for Medicare & Medicaid Services (CMS) has a list called “Items and Services That Are Not Covered Under the Medicare Program.” One of the services on this list is particularly relevant to dermatologists: Cosmetic surgery. According to CMS, cosmetic surgery (any surgical procedure that’s performed for the purpose of improving a patient’s appearance) is not covered. 

NCDs and LCDs
National Coverage Determinations (NCDs) and local Medicare contractors’ Local Coverage Determinations (LCDs) offer guidelines that go into further detail about coverage. 

For example, there is an NCD for actinic keratoses, which states that they are covered without restrictions based on patient or lesion characteristics. 

However, the NCD guidelines also allow local Medicare contractors to independently determine the maximum number of treatment visits and limitations. For instance, some LCDs specify how many times a patient can have benign lesion removals. At the same time, they may allow for times when the frequency limitations don’t apply if you document medical necessity for frequent removals, such as a patient history of skin cancer. 

It’s always a good idea to continue to brush up on your NCD and LCD knowledge. Medicare expects you to know which services are covered, which have a frequency of visits limitation of coverage, and which are reasonable and necessary. 

Advanced beneficiary notice of noncoverage

If you’re in doubt about Medicare coverage of a particular service, or you expect it to be denied, your patient needs to fill out and sign an Advanced Beneficiary Notice of Noncoverage (ABN). The ABN alerts patients that the service may not be covered and that they may be held financially responsible for the procedure.

There are four modifiers that relate to ABNs:

1. GA: Given charge may or may not be covered, and ABN has been obtained and is on file.

2. GY: Service is statutorily excluded from coverage (never covered by Medicare due to statute) and no ABN is needed. In this case, there is nothing to submit to Medicare. But you may want to use the GX voluntary ABN to prove that Medicare won’t cover it and the patient was advised*.

3. GX: Service is not covered because it’s statutorily excluded from coverage (never covered by Medicare due to statute) or is not a Medicare benefit, but the signed ABN has been obtained as a voluntary option*.
   
   * Report both GY and GX when the Medicare patient has been informed that the service is statutorily excluded from coverage, and ABN is obtained notifying them that payment of the service is their responsibility.

4. GZ: According to Medicare, the GZ claim line will always be denied due to lack of medical necessity, and no ABN was obtained. In this case, if payment is denied, the patient would not be liable for the bill because they never signed an ABN.

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