Tips for Managing the Advance Beneficiary Notice Process
What is an ABN?
An advanced beneficiary notice (ABN) is a written notice that every qualified healthcare provider (QHP) participating in Medicare programs must provide patients before furnishing items or services that are usually covered by Medicare, but under certain circumstances, are expected not to be covered.
How does an ABN work?
The ABN allows the patient to make an informed decision about whether to receive the item or service that may potentially not be covered and accept financial responsibility for the service or items, if Medicare does not pay for them.
What happens if a practice doesn’t give a patient an ABN?
If the patient does not get a written notice when required, he/she may not be held financially liable if Medicare denies payment. This may cause the QHP to be financially liable for the unpaid service. When an ABN is required and the QHP fails to issue one, or if Medicare finds that the ABN is invalid and the provider knew or should have known that Medicare would not pay for a usually covered item or service, the QHP may be financially liable for the unpaid service and cannot ask the patient to pay for the service.
Refunds are considered timely when they are made within 30 days after you received the Remittance Advice from Medicare or within 15 days after a determination on an appeal, if you or the beneficiary files an appeal CMS source.
What if the patient paid beforehand?
If payment was previously collected from the patient, the QHP must refund the patient the proper amount in a timely manner. The ABN is used for Medicare Part B (outpatient) and Part A (limited to hospice, home health agencies, and religious nonmedical healthcare institutions only) items and services.
What happens if the practice complied with the ABN protocols, but Medicare pays for the service?
When an ABN is required and the patient is notified that the item or service provided is not covered, but the patient has signed the ABN form, the practice can seek payment from the patient directly at the time of service. If by chance, Medicare pays all or part of the claim for items or services previously paid by the patient, the practice is required to refund the patient any and all amounts in a timely manner.
When to issue an ABN?
Most practices struggle with the appropriate use of the ABN and its modifiers. An ABN must be completed and issued to the patient at the time of service when:
The QHP believes that Medicare may not pay for an item or service;
Medicare usually covers the item or service; and
Medicare is expected to deny payment for the item or service because it is not medically reasonable and necessary for the patient at this time, i.e., not considered reasonable and necessary under Medicare program standards or service or therapy is in excess of Medicare capped amounts and does not qualify for a cap exception.
What are medical necessity criteria?
Medicare will routinely deny an item or service as not medically reasonable and necessary when it is considered:
Experimental and investigational or considered “research only”;
Not indicated for diagnosis and/or treatment in the case;
Not considered safe and effective; or
More than the number of services Medicare allows in a specific period for the corresponding diagnosis.
CMS: To be considered medically necessary, services must meet specific medical necessity requirements contained in the statute, regulations, and manuals and specific medical necessity criteria defined by the National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs) (if any exist for the services being reported).
Issuing an ABN voluntarily?
A practice is not required to notify the patient before furnishing a statutorily excluded service for services and items that are known and documented under Medicare policy that it is not a Medicare benefit. However, the practice can choose to issue a voluntary ABN or other financial consent as a courtesy to inform the patient about his/her forthcoming financial liability. When an ABN is issued voluntarily, it has no effect on financial liability and the beneficiary is not required to check an option-box or sign and date the notice.
Completing the ABN
| The ABN should be: | |
|---|---|
| Issued (preferably in person) to and understood by the Medicare patient or his/her representative, for the purpose of giving notice under applicable state or other law. | Explained in its entirety with all questions related to the ABN answered. |
| Completed on the approved, standardized notice format, with all required blanks completed. You may include attachments that list additional items and services. Medicare permits limited customization, such as preprinting information in certain blank fields of the ABN form. | Signed and dated by the patient or his/her representative after he/she selects one option box. If you issue the ABN on an electronic screen, you must ask the beneficiary if he/ she prefers a paper version and issue a paper ABN if he/she prefers such. You should retain a copy and give the beneficiary a paper copy (whether the ABN is signed on paper or electronically). If you maintain electronic medical records, you may scan the signed hard copy for retention. |
| Issued far enough in advance of potentially non-covered items or services to allow sufficient time for the patient to consider available options. | Kept for 5 years from the date-of-care delivery when no other requirements under state law apply. Medicare requires you to keep a record of the ABN in all cases, including when the patient declined the care, refused to choose an option, or refused to sign the ABN. |
Claim Reporting and Use of ABN Modifiers
Report the procedure or Current Procedural Terminology® (CPT®) code as usual to Medicare and append the appropriate ABN modifier. The chart below provides the claim-reporting modifiers associated with ABN use.
| Modifier | When to use modifier |
|---|---|
| GA: Waiver of Liability Statement Issued as Required by Payer Policy, Individual Case | Report when you issue a mandatory ABN for a service as required and it is on file. You do not need to submit a copy of the ABN, but you must have it available upon request. |
| GX: Notice of Liability Issued, Voluntary Under Payer Policy | Report when you issue a voluntary ABN for a service Medicare never covers because it is statutorily excluded or is not a Medicare benefit. You may use this modifier in combination with modifier GY. |
| GY: tem or Service Statutorily Excluded, Does Not Meet the Definition of Any Medicare Benefit | Report that Medicare statutorily excludes the item or service or the item or service does not meet the definition of any Medicare benefit. You may use this modifier in combination with modifier GX. |
| GZ: Item or Service Expected to Be Denied as Not Reasonable and Necessary | Report when you expect Medicare to deny payment of the item or service due to a lack of medical necessity and no ABN was issued. |
ABN flowchart
This chart outlines the modifiers and rules related to voluntary and involuntary ABNs.
Source: Flowchart is reproduced from High-Risk Areas in Medicare Billing Current Developments Newsletter © 2010 by Strategic Management Systems, Inc. and Atlantic Information Services, Inc.
