The advance beneficiary notice (ABN) is a powerful tool for practices to educate patients about their benefits and responsibilities for Medicare non-covered services. Many of our readers still write us to ask questions about the form and the correct way to use it in the office, so we developed this Frequently Asked Questions list for the ABN to clear up some of the confusion.
We always tell the physicians we work with: “If you are going to accept insurance, you need to be the expert on insurance.” In practice this means knowing your patient’s benefits and working with them to communicate with them about what, if anything, they will owe before or after payer adjudication. No one enjoys being surprised about money!
The ABN is also a tremendous opportunity to talk about financial responsibilities with a patient. If you don’t have a credit card on file program in your practice, it’s important to be proactive about patient financial responsibilities and how they will be handled. Having a patient sign that they understand they will be financially responsible for payment for a non-covered service is a natural way to start that process.
Here are some of your most frequently asked ABN questions.
What is the ABN? What does it do?
The ABN was originally developed by the Centers for Medicare and Medicaid Services (CMS) to make sure Medicare patients were aware that if they received services that were not covered by Medicare, payment for these services would be their responsibility. By signing the ABN, the patient agrees that if Medicare (or other payer) does not pay the physician then the patient will have to pay for it. The document affirms that the patient knows they could be required to pay out of pocket. Once the ABN is signed, if you are sure Medicare won’t pay you can (and probably should) collect the patient portion listed on the form immediately. You can charge in full for the services if the ABN is signed, however the service is self-pay at that point, so I always suggest you charge your self-pay rate.
What won’t Medicare pay for?
The classic example is an annual physical, which many people assume is part of their Medicare coverage. Medicare will pay for an initial “Welcome to Medicare” visit, as well as an “Annual Wellness” visit, but the key word to hear is “visit”. These are not physical examinations. If a patient wants a physical, they will need to sign an ABN before the service saying they understand that Medicare will not pay for it. Other things that Medicare will not pay for include services without specific medical need, like labs or imaging diagnostics without diagnoses that are accepted as medically necessary. Medicare will also only pay for certain services at regular intervals, for example women who are considered “low risk” for cervical cancer can only receive a pap smear every 24 months. Note that you are not required by Medicare to get an ABN signed for services that are never covered, such as the annual physical, however, it pays to be absolutely clear when discussing payments, so I suggest you get an ABN signed by the patient regardless.
Should we just have everybody sign an ABN?
No. The ABN is to be used in specific instances for a specific service. You cannot require a patient to sign a “blanket” ABN for the year, just in case. If Mr. Smith wants a service that Medicare is unlikely to, or definitely will not pay for and the physician is comfortable ordering or performing the service, a staff member should present an ABN to Mr. Smith for that specific day’s procedure, before it is performed. If the patient is a having a series of recurring services that will not be covered, you can have one ABN signed for up to twelve months of the specific service. An example of this might be a series of physical therapy sessions. The ABN is not a catch- all to protect from denial, however, and persistent misuse will not only be denied, but could open the door to an audit.
We are a small, busy practice; that sounds like a lot of work!
It is a lot of work for a practice! Many practices choose to not use the ABN rather then work out a protocol to implement it. The practice has to have a system in place so that the physician or staff member can explain the situation, fill out the form, answer the patient’s questions and file the ABN for posterity (they have to be kept seven years, like other records). It can be the physician in a micropractice, or a dedicated billing or customer service employee in a larger setting. Also, a note has to be made of the ABN signing in the patient’s chart so that modifiers can be added to the CPT codes for billing.
Are ABNs for Medicare only?
No. You can also have a patient sign an ABN for a private payer. This helps the patient to understand that if their insurance doesn’t cover the service specified, the patient will have to pay for it. Medicare requires an ABN be signed in order to bill the patient, but for patients with private insurance it’s still a great opportunity to talk about non-covered services, deductibles, copays, coinsurance or any past balances if you haven’t already. A few private payers actually require a waiver/ABN to bill patients for non-covered services – check your contract to be sure.
Mary Pat has created a generic non-Medicare ABN; if you’d like a copy for $20, just email Mary Pat and she can send you one.