CMS revises Advance Beneficiary Notice of Non-coverage (ABN) requirements

CMS released MLN Matters Number: MM12242 (PDF) announcing reorganizations, edits, and other changes to the Advance Beneficiary Notice of Non-coverage (ABN) section in the Medicare Claims Processing Manual.

Chapter 30, section 50 of the Financial Liability Protections (FLP) includes provisions that protect patients, health care providers, and suppliers under certain circumstances, such as when Medicare deems a service or item statutorily not covered; from unexpected liability for charges associated with claims that, after coverage determination, Medicare does not pay. The changes to this section went into effect on Oct. 14, 2021.

Some of the key changes to the FLP include:

• Some general notice preparation requirements for the ABN

• Period of effectiveness of the ABN for repetitive or continuous non-covered care

• How the FLP apply to dually eligible individuals (a Qualified Medicare Beneficiary (QMB) Program or Medicaid coverage)

Applicability to limitation on liability (LOL)

In order to shift financial liability to the beneficiary for non-covered services, section 1879 of the Social Security Act (the Act) requires the dermatologist (i.e., notifier) to notify a beneficiary in advance of providing a service or item when they believe that service(s) or item(s) will likely be denied by Medicare for any of the reasons specified in the statutory provision.

Medicare has identified the following provisions that require delivery of an advance notice to the patient if the service or item is expected to be denied:

• The service(s) and/or item(s) are found not to be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member under §1862(a)(1)(A) of the Act.

• In the case of hospice care, the service(s) and/or item(s) are not reasonable and necessary or related for the palliation or management of the terminal illness.

Compliance with limitation on liability provisions

Failure to comply with the ABN instructions on LOL may result in the dermatologist being held financially liable and/or sanctioned by the Medicare Contractor for the denied service. Non-compliance can include failing to give notice when required or giving defective notice. Medicare considers an ABN notice defective when the beneficiary has questions that the notifier refuses, cannot answer, and fails to direct them to 1-800-MEDICARE to get clarity.

Dermatologists can be exempt from sanctions or financial liability for failing to give notice if you can demonstrate that you did not know and could not reasonably be expected to know that Medicare would not make payment for the service or item provided. Medicare beneficiaries cannot be billed for non-covered services if they do not receive adequate advance notice.

ABN standards

The ABN, Form CMS-R-131, is the Office of Management and Budget (OMB) approved standard written notice to shift financial liability to the beneficiary for non-covered services and items. Failure to use this notice as mandated could result in the notice being invalidated and/or the notifier being held liable for the services or items in question.

CMS has made replicable copies of the ABN with instructions available on their website.

The form is available in English and Spanish, and It is recommended that you provide a copy in the language that is most appropriate to the beneficiary’s best understanding. Verbal assistance in other languages may be provided to assist beneficiaries in understanding the document. Notifiers should document any types of translation assistance that are used in the “Additional Information” section of the notice. Dermatologists can also consider using the AAD-designated medical expert translation and interpreting services.

ABNs are effective as of the OMB approval or expiration date given at the bottom of each notice. The routine approval is for three-years use. Notifiers are expected to exclusively use the current version of the ABN, although CMS is allowing a transition period to switch from using expiring notices to newly approved notices. Dermatologists may give a beneficiary a single ABN describing a repetitive or continuous course of non-covered services or items provided that the ABN lists all items and services that are believed to be non-covered Medicare items. If applicable, the ABN must also specify the duration of the period of treatment. If during treatment additional non-covered items or services are needed, the physician must give the beneficiary another ABN.

If the beneficiary refuses to choose an option and/or refuses to sign the ABN when required, the notifier should annotate the original copy of the ABN indicating the refusal to sign or choose an option and may list witness(es) to the refusal on the notice, although this is not required. If a beneficiary refuses to sign a properly delivered ABN, the notifier should consider not furnishing the item/service, unless the consequences (health and safety of the patient, or civil liability in case of harm) are such that this is not an option.

A beneficiary who refuses to sign a properly executed ABN may decide to receive the item(s) and/or service(s). In this case, the beneficiary should indicate that they are willing to be personally and fully responsible for payment of the affected services. Dermatology practices must ensure that a completed Financial Consent is signed and on file. In any case, the notifier should provide a copy of the annotated ABN to the beneficiary and keep the original version of the annotated notice in the patient’s file.

The dermatologist should retain the ABN copy that was given to the beneficiary on file in case there are any questions regarding whether the beneficiary had knowledge of the potential financial liability. The general timeframe for retention of the ABN copy is five years from discharge/completion of delivery of care when there are no other applicable requirements under state law. Electronic retention of the signed paper document is also acceptable.

Completing the ABN

Step-by-step instructions for notice completion are posted, along with the notice, on the CMS website.

For additional guidance, visit the AAD/A Coding Resource Center, and check out tips for managing the Advance Beneficiary Notice (ABN) process.