Article Detail - JD DME

RETIRED ON OCTOBER 5, 2017 DUE TO ARTICLE BEING OUT OF DATE.

Original Effective Date: 12/06/2001
Revision Effective Date: 11/01/2013

An Advance Beneficiary Notice (ABN) is a written notice you can give to a Medicare beneficiary before you provide a beneficiary an item or service that you expect Medicare will deny for the following reasons:

• lack of medical necessity
• prohibited, unsolicited telephone contacts
• no supplier number
• an item that you submitted for an Advance Determination of Medicare Coverage (ADMC) where the DMERC denied the ADMC request

The purpose of an ABN is to inform the beneficiary that Medicare will probably not pay for a certain item or service on a certain occasion, even if Medicare might pay for the item or service under different circumstances. This allows the beneficiary to make an informed consumer decision on whether or not to receive the items or services, for which he/she may have to pay out of pocket or through other insurance.

DMEPOS suppliers have been using an ABN form (HCFA-R-131) when they expect that Medicare may not pay for an item. The Office of Management and Budget (OMB) recently cleared a new, optional ABN form (CMS-R-131-G) that you can also use for the same purpose.

For example, you may think that the DMERC will determine that the item is not medically necessary, or that the quantities of an item exceed the quantity that Medicare allows. On the ABN, you must specify the item in sufficient detail, so the beneficiary can understand what Medicare will not pay for and the reason Medicare won't pay for it. You may not simply give ABNs to every Medicare beneficiary you serve, unless there is a specific reason (e.g., you only sell items that Medicare never covers) why you feel Medicare will deny payment. Statements such as "I never know when Medicare will pay" are not acceptable on ABNs.

Upgrades:
Medicare will accept ABNs on upgrades. For Medicare purposes, CMS defines an upgrade as an item that is more expensive, deluxe, or containing excess components, quantity, or features than what the physician ordered. The upgraded item may be from one HCPCS code to another, or within the same HCPCS code. However, the upgraded item must be within the range of services that are appropriate for the beneficiary's medical condition. For example, the beneficiary can upgrade from a standard manual wheelchair to an ultralightweight wheelchair, but not from a cane to a wheelchair. The choice to upgrade lies with the beneficiary.

CMS is not including items that a physician ordered, but which the supplier believes to be more than what Medicare considers medically necessary. You may still use an ABN in this situation, but must continue to follow the current operating procedures for ABNs that are already in place, and bill them as you have billed them in the past (i.e., bill the item that the physician ordered on one line with the GA modifier).

If a beneficiary signs an ABN, you may collect the difference between the charges for the upgraded item and the charges for the non-upgraded item from the beneficiary.

In some cases, you may choose to provide an upgrade for a beneficiary for free (e.g., to lower costs by maintaining an inventory of only one type of manual wheelchair that can supply all of your manual wheelchair needs). When providing a free upgrade, you do not need to have the beneficiary sign an ABN, because you will not be charging them for anything above their normal deductible and co-payment for the non-upgraded item.

ABNs for upgrades can apply to both assigned and unassigned claims.

Billing Claims for Dates of Service Before April 1, 2002:

• To provide a free upgrade: Bill for the non-upgraded item. You don't need to use any modifiers, but you need to describe the upgraded item in Line 19 of the HCFA-1500/CMS-1500, or the HA0 record on an electronic claim.
• To charge for the difference between the Medicare allowed for a non-upgraded item and an upgrade: Bill for the upgraded item with a GA modifier.

Billing Claims for Dates of Service April 1, 2002 and Later
To provide a free upgrade: Use the correct HCPCS code for the non-upgraded item that the physician ordered. You must only charge for the non-upgraded item. Use a GL modifier with the code. In item 19 of the claim, or as an attachment to the claim, specify the make and model of the upgraded item you actually furnished, and describe why this item is an upgrade (e.g., you provided an ultralight wheelchair when the physician ordered a standard wheelchair).

To charge for the difference between the Medicare allowed for a non-upgraded item and an upgrade: You need to bill two lines on your claim. You must bill the upgraded item that you provided to the beneficiary on the first line, with a GA or GZ modifier. Use the GA modifier if the beneficiary signed the form, and the GZ if you did not get an ABN that the beneficiary signed.

On the next line, bill for the item the physician ordered. Use a GK modifier on this line. If you are upgrading from one item to another within the same HCPCS code, this will be the same code you put on line 1, but with a different charge amount.

You must bill both lines sequentially and on the same claim. You may include more than one upgraded item on a claim, as well as any other items for which you use an ABN. However, for items where you provide an upgrade, you must bill the non-upgraded item on the line immediately following the upgraded item.

You must use the full charge on the claim for both the non-upgraded and the upgraded items. Do not calculate the difference between the non-upgraded item and the upgrade yourself.