Complete Medical Billing Services

Revisit the Rules

With a Revised ABN

Get a signature or you may not get paid

The Centers for Medicare 86 Medicaid Services (CMS) recently released a new Advanced Beneficiary Notice ofNoncoverage (ABN).  If you are unsure ofwhen or how to apply an ABN, now is the perfect time to brush up on the details.

ABN Basics

The ABN is a standard form to inform a patient that Medicare may deny coveragéfor a recommended or desired item or service. It explains why Medicare may deny the item or service, and provides a cost estimate for it. Finally, an ABN notifies the patient of his responsibility to pay for the noncovered item or service, if he chooses to receive it. In many cases, a provider cannot seek payment from the patient for unpaid Medicare services if an ABN was not properly issued.

CMS periodically revises the ABN. The most recent version, Form CMS-R-131 (release date March 2011), is mandatory as ofjan. 1, 2012. Previous versions of the ABN (release date March 2008) are no longer being accepted. The “Revised ABN CMS-R-131 Form and Instructions” may be downloaded from the CMS website: http://www.cms.gov/BNl/02_ABN.asp.

ABNs must be reproduced on a single page (either letter or legalsize). To be safe, reproduce the ABN “as is” from the CMS website: Except where specifically allowed by the form instructions, “to integrate the ABN into other automated business processes,” you may not customize the ABN. 

Who Should Use an ABN

Per CMS instructions, ABN “notifiers” may include:

• Physicians
• Providers (including institutional providers, such as outpatient hospitals)
• Practitioners
• Suppliers paid under Part B (including independent laboratories)
• Hospice providers and religious non-medical health care institutions (RN I-ICIs) paid exclusively under Medicare Part A
• Skilled nursing facilities (SNFs), for items or services expected to be denied under Medicare Part B

The notifier must list her name in section A of the ABN form. The physician, provider, etc., does not have to present the ABN to the patient personally; employees or subcontractors of the notifier may deliver the ABN.

When to Use an ABN

The ABN gives a Medicare beneficiary notice that Medicare “ is not likely to provide coverage in a specific case.” The patient’s name is listed in section B of the ABN, and the item or service must be listed in section D. Section C is an optional field to enter an identification number for the beneficiary to link the notice with a related claim. Section C is not used to indicate the provider’s identification number.

The provider must explain “in beneficiary friendly language” Why he or she believes Medicare may not cover the items or services (section E). Common reasons a service may be denied include:

• Medicare does not pay for the procedure or service for the patient’s condition.
• Medicare does not pay for the procedure or service as frequently as proposed.
• Medicare does not pay for experimental procedures or services.

The explanation of why _/Medicare may deny the item or service should be as specific as possible. A simple statement of “Medicare may not cover this procedure” is not sufficient.  Providers should list on the ABN each and every item or service that might not be covered. Medicare relieves beneficiaries from financial liability where they did not know and did not have reason to know a service would not be covered. Without a valid ABN, the Medicare beneficiary cannot be held responsible for denied charges.

Estimating Costs

The provider must provide a cost estimate for the proposed procedure or service (section F). CMS instructions stipulate, “Notifiers must make a good faith effort to insert a reasonable estimate” and “within $100 or 25 percent of the actual costs, whichever is greater.” CMS would allow an estimate to substantially exceed the actu- al costs because the beneficiary “would not be harmed if the actual costs were less than predicted.”  CMS allows exceptions if the provider is unable to give a goodfaith estimate of costs, but these circumstances are expected to be infrequent.  

Complete the Form, Confer with the Patient

After ABN sections A-F have been completed, the Medicare beneficiary may choose to proceed with the procedure or service a.nd assume financial responsibility, or may elect to forego the procedure or service (section G). Under no circumstances can the notifier decide this for the beneficiary. If the patient chooses to proceed, he may nevertheless request that the charge be submitted to Medicare for consideration (with the understanding that it will probably be denied).

The ABN “must be verbally reviewed with the beneficiary or his/ her representative and any questions raised during that review must be answered” bejbre the patient signs and dates theABN (sections I and  CMS requires that the provider present the ABN “far enough in advance that the beneficiary or representative has time to consider the options and make an informed choice.”  A copy of the completed, signed form must be given to the beneficiary or representative, and the provider must retain the original notice on file.

You Can Proceed Without a Signature, If Necessary

If the beneficiary refuses to sign an ABN, but still requests the procedure or service, the provider should document the patient’s refusal.  The provider and a witness should then sign the form. The patient’s signature is not required for assigned claims (claims submitted by and paid to a physician on behalf of the beneficiary).

To hold the patient financially liable, a signature is required on the ABN for unassigned claims (claims submitted by the patient, who then reimburses the physician). If the patient refuses to sign, the options are not to provide the service or procedure (which might raise potential negligence issues), or to provide the service knowing that the provider may not get paid.

Append Modifiers to Your Claim

When filing your claim, apply modifier GA Waiver ofliability statement on file when the provider believes the service is not covered and the office has a signed ABN on file.  Modifier GY Item ar sert/ice statutorily excluded or does not meet the definition ofizn)/Medicare benefitapplies when Medicare excludes the item or service from coverage. When you report modifier GY, Medicare will generate a denial notice that the beneficiary may use to seek payment from secondary insurance, for instance.

If the provider fails to issue an ABN for a potentially uncovered service, append modifier GZ Item orserz/ice expected to be denied as not reasanable and necessary to the claim. This indicates that the provider cannot hold the patient financially responsible if Medicare denies the service, but will reduce the risk of fraud or abuse allegations for claims deemed “not medically necessary.”

© 2012 AAPC, Coding Edge Magazine. March Edition - www.aapc.com