Proper Use of the ABN

August 02, 2010

An advance beneficiary notice (ABN) is a written notice that a health-care provider or his/her designee gives to a Medicare beneficiary, before outpatient items or services are rendered, when the health-care provider believes Medicare will not pay for some or all of the items or services because the service is considered by Medicare as “not medically necessary.”

ABNs should only be provided to patients enrolled in original (fee-for-service) Medicare. The ABN allows the patient to make an informed decision about whether to receive services that he/she may be financially responsible for paying. The ABN serves as proof that the patient had knowledge prior to receiving the service that Medicare might not pay. If a health-care provider does not deliver a valid ABN to the patient when required, the patient cannot be billed for the service.

Services denied by the Medicare program as not medically necessary or reasonable fall into these general categories:

  • Experimental and investigational.
  • Not safe and effective.
  • Limited coverage based on certain criteria.
  • Obsolete tests.
  • Number of services exceeds the norm and no medical necessity demonstrated for the extra number of services.

Medical necessity is generally determined by the International Classification of Diseases-9 diagnosis code submitted with the service or the interval of time between services. For the gastroenterology practice, the issue of medical necessity may be impacted by the time restrictions for colorectal cancer screening services. For example, the restricted interval between two average-risk screening colonoscopies is 10 years. If the patient presents for an average-risk screening within the 10-year restricted period and a claim is submitted to Medicare, the claim will be denied as “not medically necessary.” Unless the practice had the patient sign a completed ABN prior to scheduling the procedure, the patient cannot be billed. If the ABN was signed, the practice can bill the patient for the full fee (not the Medicare allowed amount) for the procedure. ABNs are not required for care that is statutorily excluded or for services for which no Medicare benefit category exists. However, in these situations, health-care providers can issue an ABN voluntarily.

Health-care providers are prohibited from issuing ABNs on a routine basis (i.e., where there is no reasonable basis for expectation of non-coverage).

ABN delivery is considered to be effective when the notice is:

  • Delivered and comprehended by a suitable recipient.
  • The correct ABN-approved notice with all required blanks is completed. Note: failure to use the correct notice may lead to health-care providers being found liable.
  • Delivered to the beneficiary in person, if possible.
  • Provided far enough in advance of potentially non-covered items or services to allow sufficient time for the beneficiary to consider all available options.
  • Explained in its entirety and all beneficiary-related questions are answered.
  • Signed by the beneficiary or his/her representative.

In circumstances when in-person delivery is not possible, an ABN may be delivered through the following means:

  • Telephone.
  • Mail.
  • Secure fax machine.
  • E-mail.

When delivery is not in person, the contact must be documented in the patient’s records. To be considered effective, the beneficiary cannot dispute such contact. Telephone contacts must be followed immediately by either a hand-delivered, mailed, e-mailed or faxed notice. The patient or representative must sign and retain the notice and send a copy of this signed notice to the health-care provider for retention in the patient’s record.

The health-care provider must keep a copy of the unsigned notice on file while awaiting receipt of the signed notice. If the patient does not return a signed copy, the health-care provider must document the initial contact and subsequent attempts to obtain a signature in appropriate records or on the notice itself.

Other general ABN requirements include:

  • A minimum of two copies, including the original, must be made so the beneficiary and health-care provider each have one. The beneficiary should be given a copy of the signed and dated ABN immediately and the health-care provider should retain the original copy with the beneficiary’s records.
  • The ABN must not exceed one page in length; however, attachments are permitted for listing additional items and services. If an attachment sheet is used, a notation such as “see attached page” must be inserted in the items/services area of the ABN. Attached pages must include the following:
    • Beneficiary’s name.
    • Identification number (optional).
    • Date of issuance.
    • Table listing the additional items/services, the reasons Medicare may not pay and the estimated costs.
    • A space below the table in which the beneficiary inserts his/her initials to acknowledge receipt of the attachment page.
    • A visually high-contrast combination of dark ink on a pale background must be used.

Some customization of the ABN is permitted, such as preprinting information in certain blanks to promote efficiency and ensure clarity for beneficiaries. Customization guidelines can be found at the Web site listed directly below. In general, the ABN should be kept for five years from discharge/completion of delivery of care when there are no other applicable requirements under state law. Health-care providers are required to keep a record of the ABN in all cases, including those cases in which the beneficiary declined the care, refused to choose an option or refused to sign the notice.

The GA modifier is added to the current procedural terminology/health-care common procedure coding system code to report a required ABN was issued for a service and is on file. A copy of the ABN does not have to be submitted, but must be made available upon request.

The official ABN can be found on the CMS Web site. The Medicare Learning Network has published a brochure on the use of the ABN, which can be accessed at www.cms.hhs.gov .

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