Medicare's Advanced Beneficiary Notice

Are you clear on the correct use of Medicare's Advance Beneficiary Notice (ABN)? If you are not sure, don't despair, you're not alone. In my travels, I have found that many physician staff members are confused about how and when the ABN is to be used.

Medicare has very specific rules when it comes to their beneficiaries being made aware of their financial responsibility. For example: Medicare has identified certain codes that have limited coverage. This means that the code is sometimes paid for by Medicare and sometimes not paid for by Medicare due to medical necessity. For codes with limited coverage, medical necessity may be shown with a diagnosis or a time factor. Some of these codes are only paid for if certain diagnoses are used. If the patient does not have one of the approved diagnoses then Medicare will not pay for that service. Other codes with limited coverage are only paid for periodically such as once every 12 or 24 months. If the appropriate time has not passed, Medicare will not pay for the service as it is too soon to have this service repeated as far as they are concerned. For example, Medicare will pay for a well woman once every 12 months if the patient is considered high risk by Medicare. If the patient is not considered high risk then Medicare will pay for this service once every 24 months. If you repeat this service, even one month too soon, Medicare will not pay.

Medicare's general ABN and laboratory services ABN were combined into one form last year. Note that the previous ABN was only required for denial reasons; the revised version may also be used to provide voluntary notification of financial liability. The ABN must be filled out by the physician's office and signed by the patient prior to the patient receiving the service. If this form is not filled and signed prior to the service the physician may not ask for payment from the Medicare beneficiary. Basically, the physician just performed the service at 'no charge' to anyone. The patient will not be responsible because they were not educated concerning their financial responsibility before the service was performed and Medicare will not pay if they do not consider the service medically necessary.

The physician can only ask the patient to sign the ABN if necessary. Your office cannot have every Medicare patient who walks through the door sign the ABN, "just in case." Medicare considers this abuse. Remember that the ABN must be filled out by your office before you ask the patient to sign. The form has a place for you to describe what the service is and why Medicare is not expected to pay for it. If these two areas are not filled out before you ask the patient to sign then you are not using the form properly and can be cited for abuse.

If the patient signs the ABN and is made aware of their financial responsibility you may require the patient to pay for this service on the date the service is provided. You may also charge the patient 100 percent of your fee. You do not have to reduce your charge to the Medicare allowable. When billing a service to Medicare that you have obtained an ABN for you should attach the -GA, -GY, or -GZ modifier to the charge. These modifiers let Medicare know that you have a waiver in place for this service. When the patient receives the MEOB it will show your fee for this service as the patient's responsibility to pay. If you fail to include one of these modifiers the MEOB will show that it is not the patient's responsibility to pay and the patient will want a refund if they have already paid you.

Keep in mind that physicians and Medicare very often have different thoughts about medical necessity. When it comes to the Medicare reimbursement a practice has to be concerned with what Medicare considers medically necessary so that the ABN can be obtained to insure your right to collect from the patient.

By Jimmie Hebert, CMC, CMIS, CMOM