Advance Beneficiary Notice of Noncoverage (ABN)
An Advance Beneficiary Notice of Noncoverage (ABN), Form CMS-R-131, is a standardized notice that a health care provider/supplier must give to a Medicare beneficiary, before providing certain Medicare Part B or Part A items or services. This 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 because of:
- Medical necessity
- Frequency limitations
- Discontinued services
- Experimental and investigational
- Not safe or proven effective
The ABN gives the beneficiary the opportunity to make an informed decision prior to the procedure or service being rendered to decide whether to receive the service and accept financial responsibility if denied by Medicare. This ABN serves as proof that the beneficiary had knowledge prior to receiving the service that Medicare might not cover. If the provider does not deliver a valid ABN to the beneficiary when required, the beneficiary cannot be billed for the service and the provider may be held financially liable.
An ABN must not be used for all services and are not required for services that are statutorily excluded – examples include:
- Nutritional counseling
- Office visit
A single ABN is acceptable when:
- The ABN identifies all items/services and duration of period of treatment
- No treatment changes have occurred
- Services have not been added/deleted
If there are any changes, a new ABN is required.
Medical Necessity is defined as services that are reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member and are not excluded under another provision of the Medicare Program.
Coverage of certain items/services is limited by the diagnosis. If the diagnosis listed on the claim is deemed not medically necessary, the procedure is denied. Limited coverage may be the result of National Coverage Determinations (NCDs) or Local Coverage Determinations (LCDs). The Medicare Coverage Database (MCD) at http://www.cms.gov/medicare-coverage-database/overview-and-quick-search.aspx contains all NCDs and LCDs, local policy articles and proposed NCD decisions. NCDs are published at http://www.cms.gov/Manuals/IOM/list.asp on the CMS website. The official versions of LCDs may be viewed by contractor, state or alphabetically at http://www.cms.gov/medicare-coverage-database/overview-and-quick-search.aspx on the CMS website.
42 C.F.R.411.406 states that a provider, practitioner or supplier that furnished services which constitute custodial care under 411.15(g) or that are not reasonable and necessary under 411.15(k) is considered to have known that the services were not covered if any one of the conditions listed below are met:
- Notice from the Quality Improvement Organization (QIO), intermediary or carrier. The QIO, intermediary or carrier had informed the provider, practitioner or supplier that the services furnished were not covered or that similar or reasonably comparable services were not covered.
- Notice from the utilization review committee or the beneficiary's attending physician. The utilization review group or committee for the provider or the beneficiary's attending physician had informed the provider that these services were not covered.
- Notice from the provider, practitioner or supplier to the beneficiary. Before the services were furnished, the provider, practitioner or supplier informed the beneficiary that
- The services were not covered; or
- The beneficiary no longer needed covered services.
- Knowledge based on experience, actual notice or constructive notice. It is clear that the provider, practitioner or supplier could have been expected to have known that the services were excluded from coverage on the basis of the following:
- Its receipt of CMS notices, including manual issuances, bulletins, or other written guides or directives from intermediaries, carriers or QIOs including notification of QIO screening criteria specific to the condition of the beneficiary for whom the furnished services are at issue and of medical procedures subject to preadmission review by the QIO.
- Federal Register publications containing notice of national coverage decisions or of other specifications regarding non-coverage of an item or service.
- Its knowledge of what are considered acceptable standards of practice by the local medical community.
ABN Triggering Events
An ABN is required when an item or service is expected to be denied. This may occur at any one of three points during a course of treatment which are initiation, reduction and termination, also known as "triggering events".
- Initiation – New patient encounter, start of plan of care or beginning of treatment
- Covered items or services that might be non covered because not reasonable and necessary or frequency if done by another provider
- Reduction – Decrease in a component of care
- Patient request a frequency in care that is no longer considered reasonable and necessary
- Termination – Discontinued services
- Patient request continuation of service that is no longer medically reasonable and necessary
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Key Points to Remember
- Section C of the ABN form is an optional field. You may include an identifier, such as a medical record number or date of birth. Do not use Medicare numbers, Health Insurance Claim Numbers (HICNs), or Social Security Numbers (SSNs) as this will invalidate the ABN form.
- Provider/supplier must issue an ABN to beneficiary prior to providing care that may not be covered by Medicare because it is not medically reasonable and necessary in a particular case
- After beneficiary signs a properly issued ABN indicating his/her choice to receive item or service and accept financial liability, provider/supplier is permitted to bill beneficiary for care
- If an ABN is not issued or found to be an invalid notice in a situation where notice is required, provider/supplier is not permitted to bill beneficiary for services and provider supplier may be held liable if Medicare does not cover.
- Health care providers/suppliers are not permitted to use ABNs to charge a beneficiary for a component of a service when full payment is made through a bundled payment
- Providers and suppliers are prohibited from using an ABN to transfer liability to beneficiary when items and services would otherwise be covered by Medicare
- Health care providers/suppliers are prohibited from issuing ABNs on a routine basis (i.e., where there is no reasonable basis for Medicare to not cover). Providers and suppliers must be sure that there is a reasonable basis for non-coverage associated with issuance of each ABN. Some situations may require a higher volume of ABN issuance. As long as there is proper evidence for ABN use, provider will not have violated routine notice prohibition
- ABNs are not required for care that is statutorily excluded or for services that are never a Medicare benefit; however, in these situations, providers/suppliers can issue an ABN voluntarily
- It is inappropriate to produce an ABN for all Medicare beneficiaries receiving services for every procedure or office visit
Last Updated Mar 21, 2016