Updated: Mar 3, 2020
One of the most popular topics I’ve written about over the past 10 years, and the one I get the most email on, is the ins and outs of using the Medicare Advance Beneficiary Notice of Noncoverage – the ABN – also known as form CMS-R-131.
Why is getting an ABN so important?
The answer to this question is simple. If you supply a service to a Medicare patient and Medicare does not pay for it, you can only collect payment from the patient if you’ve communicated to the patient what the cost is and that the cost will be their responsibility AND the patient has agreed. If you routinely supply services to patients that Medicare does not cover and do not use the ABN, your practice is missing income that is rightfully theirs. Read on for more information on the appropriate times to issue ABNs for Medicare.
Why do practices find it difficult to use ABNs?
The ABN is a collection tool that many medical practices do not know how to implement. It is particularly difficult to determine who has ownership of this process in the practice because the form must be completed and signed by the patient before the service is provided. The patient is in the exam room or the lab, ready for the service or test, and a knowledgeable staff person must step in, explain the rules and pricing and obtain the patient’s signature.
Which insurance plans require the ABN?
Although you can use the ABN for Medicare Advantage Plans (commercial insurance plans that offer Medicare replacement coverage) only original/traditional Medicare (sometimes referred to as the “red, white and blue card” Medicare) REQUIRES the ABN.
Commercial non-Medicare plans have also started asking physicians to issue ABNs when a service will not be covered by the plan and the patient will be paying for the service out-of-pocket. I think ABNs are not a bad idea at all to give to non-Medicare patients as it formalizes the process and drives home to the patient what the cost for something they ask for will be and that they’ve agreed to pay for it.
The ABN is not a replacement for a good financial policy.
Please don’t use a blanket ABN in place of a solid financial policy. Your financial policy should state that patients agree to be responsible for payments for services their plans don’t cover. The ABN is meant for specific individual services or series of services that the insurance plan is not going to cover, not as a catch-all for whatever insurance does not pay for. Note that the ABN is not meant to cover any dollars for which you are contractually obligated to write-off.
What version of the ABN is current?
The most current ABN was implemented in the summer of 2017. You should be using the one that has the date of 03/2020 in the lower left-hand corner. In accordance with Section 504 of the Rehabilitation Act of 1973 (Section 504), the form has been revised to include language informing beneficiaries of their rights to CMS nondiscrimination practices and how to request the ABN in an alternative format if needed.
Who uses the ABN?
The ABN is to be used by all independent laboratories, home health agencies, physicians, practitioners and suppliers paid under Medicare Part B, as well as hospice providers and religious non-medical healthcare institutions (RNHCIs) paid exclusively under Medicare Part A. Since 2013, home health agencies (HHAs) providing care under Part A or Part B issue the ABN instead of the Home Health Advance Beneficiary Notice (HHABN) Option Box 1 to inform beneficiaries of potential liability. The HHABN has been discontinued.
When should the ABN be used?
The ABN’s purpose is to allow the physician practice to collect from the patient for services that the patient wants but are not covered by Medicare. Practices are not expected to give ABNs to patients to cover services that are never covered (called statutory exclusions), however, many practices find that supplying this form to patients helps patients understand why they are responsible for the paying for the service. Practices may collect in full at time of service for services that are never covered by Medicare, but if you are not sure if Medicare will or will not pay, you may want to wait for Medicare to adjudicate the claim before collecting from the patient.
Note that the ABN must be completed and signed BEFORE providing the items or services that are the subject of the notice.
Also note that when the ABN is used as a voluntary notice (i.e. for statutory services), the beneficiary is not required to choose an option box or sign the notice.
The four broad categories of items and services not covered under Medicare are:
Services and supplies that are not medically reasonable and necessary
Non-covered items and services (statutory exclusions)
Services and supplies denied as bundled or included in the basic allowance of another service
Items and services reimbursable by other organizations or furnished without charge
The ABN can be scanned into the EMR or the billing system with the encounter form or any other financial paperwork from the visit so it can be retrieved if requested by Medicare during an audit. If you do not archive your paperwork electronically, you can file the ABNs alphabetically by patient name by month.
What are statutory exclusions (services that are never covered) under Part B?
Oral drugs and medicines from either a physician or a pharmacy. Exceptions: oral cancer drugs, oral antiemetic cancer drugs and inhalation solutions.
Routine eyeglasses, eye examinations, and refractions for prescribing, fitting, or changing eye glasses. Exceptions: post cataract surgery. Refer to benefits under DME prosthetic category.
Hearing aids and hearing evaluations for prescribing, fitting, or changing hearing aids.
Routine dental services, including dentures.
Routine foot care without evidence of a systemic condition.
Injections which can be self-administered. Exceptions: EPO, and clotting factors.
Nursing care on a full-time basis in the home and private duty nursing. (Refer to benefits under Medicare Part A).
Services performed by immediate relatives or members of the household. Services payable under another government program.
Services for which neither the patient nor another party on his or her behalf has a legal obligation to pay.
Immunizations. Exceptions: Influenza, Pneumovax and Hepatitis B.
Wheelchair van ambulance services.
“Annual Physicals” best described by codes 99387 or 99397. This is a long discussion for another post, but note that Medicare does not pay for annual preventive EXAMINATIONS, although they pay for annual wellness visits, which are not physical examinations. They do, however, pay for screening pelvic and breast exams and pap test collection at specific intervals.
How do you complete the “Estimated Cost” Section F of the ABN?
Notifiers must make a good faith effort to insert a reasonable estimate for all of the items or services listed under Blank (D). CMS expects that the estimate should be within $100 or 25% of the actual costs, whichever is greater; however, an estimate that exceeds the actual cost substantially would generally still be acceptable, since the beneficiary would not be harmed if the actual costs were less than predicted. Thus, examples of acceptable estimates would include, but not be limited to, the following:
For a service that costs $250:
Any dollar estimate equal to or greater than $150
“No more than $500”
For a service that costs $500:
Any dollar estimate equal to or greater than $375
“No more than $700”
What about estimating the costs for a series of services?
Multiple items or services that are routinely grouped can be bundled into a single cost estimate. For example, a single cost estimate can be given for a group of laboratory tests, such as a basic metabolic panel (BMP). An average daily cost estimate is also permissible for long term or complex projections. Providers may also pre-print a menu of items or services in the column under Blank (D) and include a cost estimate alongside each item or service. If a situation involves the possibility of additional tests or procedures (such as in laboratory reflex testing), and the costs associated with such tests cannot be reasonably estimated by the notifier at the time of ABN delivery, the notifier may enter the initial cost estimate and indicate the possibility of further testing. Finally, if for some reason the notifier is unable to provide a good faith estimate of projected costs at the time of ABN delivery, the notifier may indicate in the cost estimate area that no cost estimate is available. We would not expect either of these last two scenarios to be routine or frequent practice, but the beneficiary would have the option of signing the ABN and accepting liability in these situations.
How to use the ABN modifiers.
The modifiers can be confusing! Focus on using the GA and GX modifiers as best practice.