An Overview of Advance Beneficiary Notice (ABN) for Physicians

by | Published on Oct 6, 2017 | Medical Billing

Advance Beneficiary Notice
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Advance Beneficiary Notice (ABN), this is a familiar term for physicians and their beneficiaries. ABN is a notice that a doctor or supplier should give a Medicare beneficiary when furnishing an item or service for which Medicare is expected to deny payment. ABNs only apply to patients who are enrolled directly with Medicare, not patients who have coverage through a Medicare product from a private insurance company. Though medical billing companies can assist doctors with their billing, coding and claim submission tasks, physicians must have a clear idea on Medicare’s Advance Beneficiary Notices (ABN) and whether or not to issue the form before providing any service.

ABN will apply only if the patient is in the Original Medicare Plan. It does not apply if they are in a Medicare Managed Care Plan or Private Fee-for-Service Plan.

Signing this form before treatment provides patients the opportunity to accept or refuse the service, and accept financial responsibility if Medicare does not pay. The patient will be personally responsible for full payment if Medicare denies payment for a specific procedure or treatment.

Physicians are recommended to issue the ABN, when

  • They believe Medicare may not pay for an item or service
  • A beneficiary is not terminally ill, and
  • Service provided is not medically reasonable and necessary for this beneficiary

ABN comes under two categories – Required and Voluntary. Required ABN is for the service that is a benefit of Medicare but not paid due to restricted coverage. Meanwhile voluntary ABN is for the service that is not a benefit of Medicare, which is never payable.

Certain common reasons for Medicare to deny the service include the following.

  • Service not indicated for diagnosis and/or treatment in this case
  • Service not considered as safe and effective
  • The service or item is experimental or investigational
  • Limited coverage defined by the diagnosis
  • Limited number of services available

Different ABN forms meet diverse purposes. The form “CMS-R-131” is for General Practice/Physician, Laboratories, Home Health Agencies, Practitioners and Suppliers. Other provider types should use additional forms, just like form “SNFABN CMS-10055” for Skilled Nursing Facility for Part A. Once the correct form is chosen, make sure to fill the form with all blank fields addressed; review the form with the patient or their representative to ensure that they understand the purpose of the form and their financial liability, and provide a paper copy of the form to the beneficiary after they sign it. If the patient refuses to sign the form, ask your staff members to note the refusal to sign or select and list any witness present at the time of refusal.

Before getting to all these steps, it is ideal to ensure that your front and back office staffs are familiar with ABN guidelines and rules or take help from a physician billing company, which could help to avoid any financial pitfalls.

If an ABN is issued, certain modifiers should be added to the claim form.

  • GA modifier is used when you issue a mandatory ABN for a service as required and it is on file.
  • Add GX if you issue a voluntary ABN for a service Medicare never covers as it is statutorily excluded or is not a Medicare benefit.
  • GY indicates that the service is not a benefit of Medicare in any definition. It can be billed in combination with GX if the patient signed an ABN and is liable.
  • GZ is used for service that is expected to be denied and an ABN was not issued and beneficiary is not liable.

For further details on ABN guidelines, you can also refer to CMS’ booklet on Medicare Advance Beneficiary Notices.

Julie Clements

Julie Clements, OSI’s Vice President of Operations, brings a diverse background in healthcare staffing and a robust six-year tenure as the Director of Sales and Marketing at a prestigious 4-star resort.

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