Understanding Advance Beneficiary Notices (ABNs): Guidelines for Accurate Medical Coding
In the realm of medical billing and coding, the Advance Beneficiary Notice (ABN) is a crucial tool used by healthcare providers to inform patients about their financial responsibilities for certain medical services. This document becomes particularly important when services might not be covered by Medicare or other insurers. Understanding and implementing ABN guidelines is essential for ensuring compliance and avoiding claim denials.
What is an ABN?
An Advance Beneficiary Notice (ABN) is a written notice from a healthcare provider to a Medicare beneficiary. It is used to inform the beneficiary that a service or item they are about to receive might not be covered by Medicare, and therefore, they may be responsible for paying for it out of pocket. This notice allows patients to make informed decisions about their care and helps avoid unexpected costs.
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. If you do not get an ABN before you get the service from your doctor or supplier, and Medicare does not pay for it, then you probably do not have to pay for it. If the doctor or supplier does give you an ABN that you sign before you get the service, and Medicare does not pay for it, then you will have to pay your doctor or supplier for it. ABNs only apply if you are in the Original Medicare Plan. They do not apply if you are in a Medicare Managed Care Plan or Private Fee-for-Service Plan.
The legal aspect can vary from state to state, and payor to payor (assuming in network, and have a contract which is a legal document.)
The ethical aspect to me is more of a “customer service” issue. If it is something that I would reasonably expect the provider’s office to know ahead of time, it is in EVERYONE’S best interest to have some type of ABN. The patient does not want to feel as though they were tricked or taken advantage of, and the provider’s office wants to be paid for services rendered. A signed document prior to services providing the cost does just that.
CHECK WITH YOUR PAYER!
Some commercial non-Medicare plans are starting to require healthcare providers to obtain ABNs when the insurance plan does not cover a procedure or service, and when the patient is responsible for out-of-pocket expenses.
You can modify the Medicare Part B ABN form and remove the word Medicare and replace it with the name of the medicare insurance carrier. Most vision care plans do not require the provider to obtain an ABN but always verify.
When is an ABN Required?
- Medicare Coverage Issues: An ABN is required when a provider believes that Medicare may not cover a specific service or item. This could be due to the service not being considered medically necessary, being excluded from coverage, or exceeding coverage limits. When a Medicare item or service isn’t reasonable and necessary under Program standards, including care that’s:
- Not indicated for the diagnosis, treatment of illness, injury, or to improve the functioning of a malformed body member
- Experimental and investigational or considered research only
- More than the number of services allowed in a specific period for that diagnosis
- Statutorily Excluded Items: Some items or services are statutorily excluded from Medicare coverage. In such cases, providers must issue an ABN to inform patients of their financial responsibilities.
- Non-Covered Services: When a provider offers services that are generally not covered by Medicare, such as certain elective procedures or services deemed cosmetic, an ABN should be provided.
Key ABN Guidelines
- Notification Timing: The ABN must be provided before the service is rendered. Ideally, it should be given as soon as the provider determines that Medicare may not cover the service.
- Content Requirements: The ABN must include specific information:
- Description of the Service: Clearly describe the item or service that may not be covered.
- Reason for Non-Coverage: Explain why Medicare might not cover the service.
- Estimated Cost: Provide an estimate of the cost that the patient might be responsible for if Medicare does not cover the service.
- Patient Options: Outline the patient’s options, including whether to receive the service and be responsible for the payment or decline the service.
- Signature Requirement: The patient must sign the ABN to acknowledge that they have been informed about the potential non-coverage and understand their financial responsibility. The signature date should be recorded.
- Documentation: Providers should keep a copy of the signed ABN in the patient’s medical record. This documentation is crucial for substantiating that the patient was informed and agreed to the financial responsibility if Medicare denied the claim.
- Use of Correct Form: Providers must use the official ABN form provided by the Centers for Medicare & Medicaid Services (CMS). The form must be current and compliant with CMS regulations.
Required vs. Voluntary ABN
Medicare has defined the use of the ABN into two categories: required and voluntary.
Required
The service or item is a benefit of Medicare (normally payable) but due to restricted coverage will not be paid. For example:
Therapy services that have exceeded the cap amount
Exceeded frequency limits
Not reasonable or necessary (ex: diagnosis restriction)
Skilled nursing services for a patient who is not homebound
Voluntary
The service or item is not a benefit of Medicare (never payable). The use of the ABN in this circumstance is a courtesy to the patient so that the patient can make an informed decision prior to the service being rendered. It also allows your office to provide documentation in case the cost of the service to the patient is questioned at a later date.
Impact on Medical Coding
Accurate medical coding relies heavily on the proper use of ABNs:
- Claims Processing: If an ABN is issued and the service is billed correctly, Medicare may process the claim with the understanding that the patient has been notified about potential non-coverage. This can help prevent claim denials related to coverage issues.
- Patient Billing: Properly issued ABNs help ensure that patients are billed correctly for non-covered services, reducing the likelihood of disputes and billing complaints.
Common Pitfalls
- Failure to Issue: Not providing an ABN when required can lead to claim denials and financial liability for the provider. Ensure that ABNs are issued whenever there is uncertainty about Medicare coverage.
- Incomplete ABNs: Incomplete or improperly filled-out ABNs can lead to compliance issues. Ensure that all required fields are completed and that the language is clear and accurate.
- Incorrect Form Usage: Always use the most recent version of the ABN form. Outdated forms may not meet current CMS requirements and can lead to compliance issues.
Advance Beneficiary Notices (ABNs) play a vital role in the healthcare billing process, providing transparency and protecting both patients and providers. By adhering to ABN guidelines and ensuring accurate documentation, healthcare providers can navigate Medicare coverage issues effectively and minimize the risk of claim denials. Staying informed about ABN requirements and maintaining proper procedures are key to efficient and compliant medical billing and coding practices.
CMS Advance Beneficiary Notice of Non-coverage Tutorial
In this tutorial, select any field (letters A–J) for details on how to complete each ABN section.
Entities who issue ABNs are collectively known as “notifiers,” which can include physicians, practitioners, providers (including labs) and suppliers, and utilization review committees.
If you reproduce the ABN, remove the letters before issuing it to the patient.