Awareness : OBC Tips

How Does an Advanced Beneficiary Notice (ABN) Influence A Medicare Payment

Services must meet specific medical necessity requirements contained in the statute, regulations, and manuals and specific medical criteria defined by National Coverage Determinations (NCD) and Local Coverage Determinations if any exist for the service being provided. For every service billed, you must indicate the specific sign, symptom, or patient complain that makes the service reasonable and necessary. You must issue the ABN when you expect Medicare may deny payment for an item or services because:

  • It is not considered reasonable and necessary under Medicare Program standards;
  • The care is considered custodial;
  • Outpatient therapy services are in excess of therapy cap amounts and do not qualify for a therapy cap exception

Common reasons for Medicare to deny an item or service as not medically reasonable and necessary include care that is:

  • Experimental and investigational or considered “research only”;
  • Not indicated for diagnosis and/or treatment in this case;
  • Not considered safe and effective; or
  • More than the number of services Medicare allows in a specific period for the corresponding diagnosis

Your are not required to notify the beneficiary before you furnish a service that Medicare never covers or is not a Medicare benefit. You may, however, choose to issue a voluntary ABN or similar notice as a courtesy to alert the beneficiary about his or her forthcoming liability. When you issue the ABN as a voluntary notice. it has no effect on financial liability, and the beneficiary is not required to check an option box or sign and date the notice.

You may not issue an ABN on a routine basis or when there is no reasonable basis to expect that Medicare may not cover the item or service. You must ensure reasonable basis exists for non-coverage associated with the insurance of each ABN. The non-coverage notice should also not be issued in cases that:

  • Shift liability and bill the beneficiary for the services denied due to Medically Unlikely Edit (MUE)
  • A beneficiary in a medical emergency or under great duress (compelling or coercive circumstances). ABN use in the emergency room or during ambulance transports may be appropriate in some cases for a medically stable beneficiary who is not under duress;
  • Charge a beneficiary for a component of a service when Medicare makes full payment through a bundled payment; or
  • Transfer liability to the beneficiary when Medicare would otherwise pay for items and services.

When completing the ABN form it should (preferably) be done in person and comprehended by the Medicare beneficiary or his or her representative, for the purpose of giving notice under applicable State or other law. It should also very importantly be issued in advance of potentially non-covered services to allow sufficient time for the beneficiary to consider available options. The provider should also take the time to explain the form in its entirety with all question related to the ABN answered to the beneficiary. Above all its should be signed and dated by the beneficiary or his or her representative, and the form should be kept for five years from the date-of-care delivery when no other requirements under State law apply.

If the beneficiary refuses the sign the ABN, the provider should annotate the original copy of the ABN indicating the refusal to sign the ABN. The provider may list any witnesses to the refusal on the ABN, although a witness is not required.