Advance Beneficiary Notice of Noncoverage (ABN)
An Advance Beneficiary Notice of Noncoverage (ABN) is a written notice the supplier gives to a Medicare beneficiary before providing items and/or services. An ABN must be issued when the health care provider (including independent laboratories, physicians, practitioners and suppliers) believes that Medicare may not pay for an item or service which is expected to be denied by Medicare based on one of the following statutory exclusions:
- Lack of medical necessity
- Prohibited, unsolicited telephone contacts
- No supplier number
- Denial of an Advanced Determination of Medicare Coverage (ADMC) request
For an ABN form to be acceptable, it must:
- Be on the approved CMS-R-131 form;
- Clearly identify the particular item and/or service; and
- Give the reason(s) for belief that Medicare is likely (or certain) to deny payment for the item and/or service.
The purpose of the ABN is to inform the beneficiary that Medicare will probably not pay for a certain item and/or service in a specific situation, even if Medicare might pay for the item and/or service under different circumstances. This allows the beneficiary to make an informed consumer decision about whether or not to receive the item and/or service for which they may have to pay out of pocket or through other insurance.
ABNs apply to assigned and nonassigned claims, as there are financial liability provisions under Medicare law for both claim types:
Limitations of Liability applies to assigned claims for DMEPOS services disallowed because of medical necessity, due to prohibition on unsolicited telephone calls, no supplier number, or no ADMC. Under Limitation Of Liability (LOL), a beneficiary can be held liable for a service denied due to reasons cited on the ABN.
The financial liability protections (FLP) provisions of the Social Security Act (the Act) protect beneficiaries and health care providers (physicians, practitioners, suppliers, and providers) under certain circumstances from unexpected liability for charges associated with claims that Medicare does not pay. The FLP provisions include:
- LOL under Section 1879(a)-(g) of the Act.
- Refund Requirements (RR) for Non-assigned Claims for Physicians Services under Section 1842(l) of the Act.
- Refund Requirements (RR) for Assigned and Non-assigned Claims for Medical Equipment and Supplies under Sections 1834(a)(18), 1834(j)(4), and 1879(h) of the Act.
Refund requirements (RR) apply to assigned and nonassigned claims for DMEPOS services allowed because of medical necessity, due to prohibition on unsolicited telephone calls, no supplier number, or no ADMC. RR state that suppliers must make refunds of any amounts collected if the beneficiary was not properly notified of possible disallowed Medicare claims. The RR provisions require that the beneficiary is notified and agrees to be financially liable.
If a supplier renders a service which Medicare considers not medically necessary to a beneficiary, the supplier should notify the beneficiary in writing, before rendering the service, that Medicare is likely to deny the claim and that the beneficiary will be responsible for payment. Modifier GA (Waiver of Liability statement on file) should be appended to the claim with the appropriate Healthcare Common Procedure Coding System (HCPCS) code when filed.
Example statements of reasons for belief that Medicare is likely to deny payment:
- Medicare does not usually pay for this many treatments or services
- Medicare usually does not pay for this service
- Medicare does not pay for this because it is a treatment that has yet to be proved effective (experimental)
- Medicare does not pay for this many services within this period of time
- Medicare does not pay for such an extensive treatment
General statements such as "Medicare may not pay" are not acceptable.
The beneficiary or his/her representative has the right to appeal a claim decision if there is dissatisfaction with the amount of payment, denial of coverage for services or supplies, or if the original claim was not acted upon within a reasonable time. The supplier has the right to appeal a claim decision when assignment has been accepted.
Section E Examples
|"The patient does not have the required diagnosis to qualify for this item per the policy."||"Medicare might not pay for this item."|
|"The patient currently has a nebulizer (E0570) paid for by Medicare on 12/2/2013 which is same or similar to this nebulizer (E0570)."||"Patient might have same or similar item on file."|
|"There are no test results available to determine the patient qualifies for oxygen equipment under Medicare guidelines."||"Not enough supporting documentation in the medical record"|
Voluntary Notification of Categorically or Statutory Excluded Items
Under the new instruction for the revised ABN, the Centers for Medicare & Medicaid Services (CMS) advise that this form may be used to voluntarily notify Medicare beneficiaries of an expected noncovered denial of Medicare payment due to the statutory exclusion of an item or service, or the item or service not meeting the definition of any Medicare benefit.
Some examples of statutorily excluded items or situations include, but are not limited to:
- Eyeglasses or contact lenses-except those provided following cataract removal or other cause of aphakia;
- Durable Medical Equipment and related accessories and supplies provided to patients in nursing facilities;
- Personal comfort items; and
- Orthopedic shoes or shoe inserts -other than those covered under the therapeutic shoes for diabetics benefit or those that are attached to a covered leg brace.
Some examples of items or situations which do not meet the definition of a Medicare benefit include, but are not limited to:
- Parenteral or enteral nutrients that are used to treat a temporary (rather than permanent) condition;
- Enteral nutrients that are administered orally;
- Infusion drugs that are not administered through a durable infusion pump;
- Surgical dressings that are used to cleanse a wound, clean intact skin, or provide protection to intact skin;
- Irrigation supplies that are used to irrigate the skin or wounds;
- Immunosuppressive drugs when they are used for conditions other than following organ transplants;
- Most oral drugs;
- Oral anticancer drugs when there is no injectable or infusion form of the drug;
- Nondurable items (that are not covered under any other benefit category), e.g., compression stockings and sleeves;
- Durable items that are not primarily designed to serve a medical purpose, e.g., exercise equipment.
Section 1848(g)(4) of the Social Security Act states that items that are categorically excluded from Medicare benefits (i.e. hearing aids, personal comfort items, etc.) are not required to be submitted to the Medicare program by the supplier. However, if the beneficiary requests the supplier to submit the claim to Medicare, the claim should be coded with the designated HCPCS, however, neither modifiers GA nor GY are required. The supplier and the Medicare beneficiary will receive a patient responsibility denial for the noncovered services.
Last Updated Nov 01, 2016