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Practice Management & Allied Staff News & Materials

Use of the Medicare Advanced Beneficiary Notice (ABN)

June 12th, 2013

An ABN should be provided to a Medicare patient prior to rendering a service that Medicare might otherwise cover, however is likely to be denied on this particular occasion. For example, when you have good reason to expect the procedure will be denied based on other Medicare denials and local medical review policies, or that the patient's diagnosis or procedure does not meet the Medicare program standards for medical necessity.

The ABN is intended to provide the patient advanced notice that it is likely the procedure will be denied and allows the patient to make an informed decision whether to receive the service for which he or she may be personally responsible. The provider will be financially responsible if he or she fails to obtain a signed ABN for a service that is billed to Medicare and determined to be not reasonable and necessary.

Claims for such services may be submitted with any of the following HCPCS modifiers:

  • GA- Waiver of liability statement issued as required by payer policy
  • GX- Notice of liability issued, voluntary under payer policy (A voluntary ABN was issued for a non-covered service)

There may be instances in which the service to be rendered is expected to be denied however a signed ABN was not obtained because the patient refused to sign it. If this is the case, the physician may choose not to render the service, unless the health and safety of the patient is at risk, otherwise the physician is responsible for the payment. Another scenario might be that the patient presents a medical emergency and under great duress in which EMTALA (Emergency Medical Treatment and Labor Act) provisions apply and therefore could not have been provided with an ABN prior to rendering treatment. In these situations, the claim may be submitted to Medicare, although in these situations Medicare will most likely hold the provider financially liable. The claim may be reported with the following HCPCS modifier:

  • GZ- Item or service expected to be denied as not reasonable and necessary

Just as Medicare does not require claims for statutorily excluded services such as dental procedures or cosmetic surgery, an ABN is not required for such non-covered services. However, a patient may believe that a service may be covered and may request that a claim be submitted or may request a formal Medicare determination for consideration by a supplemental insurance plan. In such cases, a claim must be submitted to Medicare. The ABN is not required when submitting claims for non-covered services, but rather voluntary in these situations. Many providers prefer providing Medicare patients written notice that the service to be rendered is excluded from Medicare benefits. This ensures the patient has acknowledged responsibility for the payment and allows the patient to make an informed decision about whether or not they want to receive the service or treatment knowing they will be personally financially responsible. Such claims may be reported with the following modifier:

  • GY- Item or service statutorily excluded, does not meet the definition of any Medicare benefit

Before electing to not obtain a signed ABN, it is imperative that you be certain that the service is statutorily excluded. If you charge the patient your standard fee for services that may possibly be covered, you may be charged with violating Medicare policy, and risk penalties or exclusion from Medicare and other federal health programs. Remember it is unlawful to provide the ABN on a routine indiscriminate basis. The ABN is not intended to be a blanket statement to protect a physician from financial liability. Generic ABNs simply stating "Medicare will likely deny this service" are also unacceptable. For and ABN to be valid, the physician must specify, in beneficiary-friendly language, at least one reason the service may be denied along with the services estimated cost. Also, according to the Medicare Processing Manual, an ABN may not be used for items or services provided under the Medicare Advantage (MA) Program or for prescription drugs provided under the Medicare Prescription Drug Program (Part D).

The Advance Beneficiary Notice (ABN) form became available March, 2011 and fully implemented January 1, 2012. Although the form was named: "Advance Beneficiary Notice of Noncoverage" it is still referred to as the "ABN". The ABN form is available to download on the Beneficiary Notices page of the CMS Web site. For more information, view the CMS Medicare Learning Network "Advanced Beneficiary Notice of Noncoverage (ABN)" booklet which provides information on when providers should use an ABN, ABN policies, how to properly complete an ABN and ABN modifiers.

NOTE: For those who find it difficult to determine whether a procedure is a covered Medicare benefit, Medicare has made it easier by posting national and local coverage policies within the Medicare Coverage Database on the CMS website.