US Healthcare: ABN in Medical Billing Explained

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ABN in Medical Billing Explained: ADVANCE BENEFICIARY NOTICE (ABN) is a Standard government form CMS-R-131.

ABN in Medical Billing Explained

An Advance Beneficiary Notice (ABN), also known as a waiver of liability, is a notice a provider should give you before you receive a service if, based on Medicare coverage rules, your provider has reason to believe Medicare will not pay for the service. You may receive an ABN if you have Original Medicare, but not if you have a Medicare Advantage Plan. The ABN may look different, depending on the type of provider who gives it to you.

The Advance Beneficiary Notice of Non-coverage (ABN), Form (CMS-R-131) helps Medicare Fee-for-Service (FFS) beneficiaries make informed decisions about items and services Medicare usually covers but may not cover in specific situations. For example, the items or services may not be medically necessary for a beneficiary.

When health care providers and suppliers expect a Medicare coverage denial for a service Medicare generally covers, they must issue an ABN to transfer financial liability to the beneficiary, including:

  • Independent labs, Skilled Nursing Facilities (SNFs), and Home Health Agencies (HHAs) providing Medicare Part B (outpatient) items and services
  • Hospice providers, HHAs, and Religious Non-Medical Health Care Institutions providing Part A (inpatient) items and services
  • This educational tool shows health care providers and suppliers how to correctly complete an ABN form. In this ABN tutorial, you refers to the provider or supplier issuing the form. On the ABN form, you refers to the beneficiary signing it.

An ABN is a written notice from Medicare (standard government form CMS-R-131), given to you before receiving certain items or services, notifying you: Medicare may deny payment for that specific procedure or treatment. You will be personally responsible for full payment if Medicare denies payment.

The ABN allows you to decide whether to get the care in question and to accept financial responsibility for the service (pay for the service out-of-pocket) if Medicare denies payment. The notice must list the reason why the provider believes Medicare will deny payment. For example, an ABN might say, “Medicare only pays for this test once every three years.” Providers are not required to give you an ABN for services or items that are never covered by Medicare, such as hearing aids. Note that your providers are not permitted to give an ABN all the time, or to have a blanket ABN policy.

While the ABN serves as a warning that Medicare may not pay for the care your provider recommends, it is possible that Medicare will pay for the service. To get an official decision from Medicare, you must first sign the ABN, agreeing to pay if Medicare does not, and receive the care. Make sure you request that your provider bills Medicare for the service before billing you (the ABN may have a place on the form where you can elect this option). Otherwise, your provider is not required to submit the claim, and Medicare will not provide coverage.

Medicare has rules about when you should receive an ABN and how it should look. If these rules are not followed, you may not be responsible for the cost of the care. However, you may have to file an appeal to prove this.

When your Medicare Summary Notice (MSN) shows that Medicare has denied payment for a service or item, you can choose to file an appeal. Remember, receiving an ABN does not prevent you from filing an appeal, as long as Medicare was billed.

You may not be responsible for denied charges if the ABN:

  • Is difficult to read or hard to understand
  • Is given by the provider (except a lab) to every patient with no specific reason as to why a claim may be denied
  • Does not list the actual service provided, or is signed after the date the service was provided
  • Is given to you during an emergency or is given to you just prior to receiving a service (for instance, immediately before an MRI)

You also may not be responsible for denied charges if an ABN was not provided when it should have been. You may not need to pay for care if you meet all of the following requirements:

  • You did not receive an ABN from your provider before you were given the service or item;
  • Your provider had reason to believe your service or item would not be covered by Medicare;
  • Your item or service is not specifically excluded from Medicare coverage; and
  • Medicare has denied coverage for your item or service.

You must issue an ABN:

  • 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

Modifier Required for ABN in Medical Billing Explained

Modifier GA Waiver of Liability Statement Issued as Required by Payer Policy, Individual Case Use this modifier to report when you issue a mandatory ABN for service as required, and it is on file. You do not need to submit a copy of the ABN, but you must have it available on request.

Modifier GX Notice of Liability Issued, Voluntary Under Payer Policy Use this modifier to report when you issue a voluntary ABN for a service Medicare never covers because it is statutorily excluded or is not a Medicare benefit. You may use this modifier in combination with modifier GY

Modifier GY Item or Service Statutorily Excluded, Does Not Meet the Definition of Any Medicare Benefit Use this modifier to report that Medicare statutorily excludes the item or service or the item or service does not meet the definition of any Medicare benefit. You may use this modifier in combination with modifier GX. Modifier GZ Item or Service Expected to Be Denied as Not Reasonable and Necessary Use this modifier to report when you expect Medicare to deny payment of the item or service due to a lack of medical necessity and no ABN was issued.

ABN in Medical Billing Explained with complete information in a presentation. Click Here below to download the PPT Presentation!

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