The ABN: The Most Misunderstood and Underutilized Document in Healthcare
There’s a new ABN form required to be in use in January 2012 – read about it here in my article “Everybody’s Favorite Form: New Advance Beneficiary Notice of Noncoverage (ABN) Form Begins in 2012”
Note from Mary Pat: The Advance Beneficiary Notice of Noncoverage (ABN) is a collection tool that many medical practices do not know how to implement. It is particularly difficult to determine who has ownership of this process, because the form must be completed and signed by the patient before the service is provided. The patient is in the exam room or the lab, ready for the service or test, and a knowledgeable staff person must step in, explain the rules and pricing and obtain the patient’s signature.
Blogger Charlene Burgett does a great job of explaining the ins and outs of using the ABN, and has agreed to share an article originally published on her blog “Conundrum” with MMP readers.
The use of the ABN is required by Medicare to alert patients when a service will not be paid by Medicare and to allow the patient to choose to pay for the service or to refuse the service.
If the practice does not have a signed ABN from the patient and Medicare denies the service, the charge must be written off and the patient cannot be billed for it. The only exception is for statutorily excluded services (those that Medicare never covers like cosmetic surgery and complete physicals for example). In this case, a practice can bill the patient for the non-covered service despite not having an ABN. It is, however, a good idea to have the ABN signed for non-covered services so the patient is made aware that they are responsible.
If the patient signs the ABN and is made aware of their financial responsibility you may require the patient to pay for this service on the date the service is provided. You may also charge the patient 100 percent of your fee. You do not have to reduce your charge to the Medicare allowable.
With a signed ABN, the practice has proof of the patient’s informed consent to provide the service and their agreement to be financially responsible for the service. In the past, Medicare had a “Notice of Exclusion of Medicare Benefits” (NEMB) that we could provide to the patient (no signature required) to alert them of Medicare’s non-covered services. The ABN has replaced the NEMB.
The typical reasons that Medicare will not cover certain services and that would be applicable are:
- Statutorily Excluded service/procedure (non-covered service)
- Frequency Limitations
- Not Medically Necessary
Statutorily Excluded items are services that Medicare will never cover, such as (not a complete list):
- Complete physicals (excluding Welcome to Medicare Screenings, with caveats)
- Most immunizations (Hepatitis A, Td)
- Personal comfort items
- Cosmetic surgery
For these items, it is a good idea (not a requirement) to complete the ABN and have the patient check the appropriate box under options and sign the ABN. For the sake of the billing department, I strongly encourage the use of ABN’s for statutorily excluded items.
Frequency Limitations are for services that have a specific time frame between services. For example, Medicare allows one pap smear every 24 months if the pap is normal. If the patient wants one every 12 months for their peace of mind, Medicare will pay for year one and the patient will pay for year two and that pattern continues. The ABN needs to be on file for the year that the patient is responsible for paying. If the patient fits Medicare’s guidelines for “high risk” they are allowed to have the pap every 12 months and no ABN is required.
Services that are not considered Medically Necessary are those that do not have a covered diagnosis code based on Local Coverage Determinations (LCD). One example is for excision of a lesion. If the lesion is being removed because the patient just doesn’t like how it looks, that is considered cosmetic surgery. If the lesion is showing some changes (i.e. bleeding, growing, changing color, etc), then it is considered medically necessary because it potentially can be malignant. The removal needs to have diagnosis coding to substantiate the medical necessity and Medicare has Local Coverage Determinations that list all the codes/coding combinations that Medicare will approve for payment.
A rule of thumb in trying to discern the necessity of ABNs is to ask yourself if there may be some times that the service isn’t covered by Medicare. The times the service isn’t covered, an ABN is required. To illustrate this point, here are two examples:
- EKGs are covered for certain cardiac and respiratory conditions. The only time an EKG is covered for preventive screening is during the patient’s first year enrolled in the Medicare program and when being done during the Welcome to Medicare screening. After that time, Medicare will never cover an EKG for preventive screening. To notify the patient of this and to show that the patient agrees to be financially responsible for the EKG, an ABN should be completed.
- Another example is for the Tetanus immunization. Medicare will cover tetanus when medically necessary; if the patient has cut themselves and the tetanus is provided due to that injury. If the tetanus is provided to the patient because it has been ten years since the last tetanus and the tetanus is not in response to a recent injury, then it will be non-covered because it is not “medically necessary” and the ABN will need to be on file.
ABNs need to be completed in their entirety. The “Options” box can only be completed by the patient and it states that “We cannot choose a box for you”. That would appear to be coercion.
A “blanket” ABN, one that is signed by the patient for all services provided within a certain time period, is not acceptable and is illegal.
In addition, there is a small area to provide additional information that can be used by either the patient or the provider’s office. This could be anything pertinent to the information that the ABN covers. The bottom of the form is where the patient signs and dates. We keep the original ABN in the chart behind the progress note for that day. Providers MUST provide a copy of the signed ABN to the patient.
The current ABN form with instructions can be found here.
If a service is denied by Medicare and the physician does not have a signed ABN prior to the service being rendered, the service can not be billed to the patient and will need to be written off. Sometimes a patient may refuse to sign the ABN – if this happens it is appropriate for the physician to document the refusal and sign, along with having a witness sign. Medicare will accept this and the patient can be billed for the service if denied by Medicare.
How does Medicare know whether or not you have a signed ABN? You tell them, by adding a modifier to the CPT code when completing the claim form. The appropriate modifiers are:
GA: The ABN is signed, but the service may not be covered.
GY: A “statutorily excluded” service.
GZ: The service is expected to be denied as not reasonable or necessary. This is typically used when there is a secondary payer that requires the Medicare denial before they pay benefits.
The use of the ABN is often misunderstood; however, it is the only way a patient can be informed about their financial responsibility prior to agreeing to a service being rendered. This is an issue that the OIG has reportedly been interested in investigating for fraud and abuse.
Charlene Burgett, MA-HCM
Note: Readers, how do you make the ABN work in your practice? Do you train the clinical staff, the physicians, or other staff to recognize the “ABN Moment”? How do you make it work? Please share your ideas by responding with a comment.
I suggest you get in touch with Allison Lux Nuovo, who is currently writing a book on starting a billing company. She is an excellent resource! Her email is Allison@IntegrityBillingSolutions.com.
When Medicare is primary is an ABN still required when pt has a secondary insurance whether it is a Medigap policy or not?
Medicare supplemental policies do not always pay for anything/everything Medicare does not. If you expect to bill the patient for any portion, I would play it safe and get an ABN.
I work for a hospital. The cardiologists have some new technology they want to use as part of a cardiac cath which has a temporary code. Medicare won’t cover it as they still consider it experimental. If we use the technology but do not bill Medicare or the patient, is the ABN required? (The procedure is intravascular optical coherence tomography.) Can we choose to not bill this procedure without repercussions or is that frowned upon by Medicare?
Hi Mary Anne,
You do not have to bill Medicare, and as far as I know, Medicare does not frown on this practice.
The ABN is only required if you plan to bill Medicare and if/when Medicare denies payment for the service, you intend to hold the patient responsible for the balance.
When Medicare is the secondary payer, is an ABN required?
Yes, the ABN must be used whether the patient has Medicare as a primary or secondary payer.
Are only Medicare patients required to sign an ABN form? If a patient does not have Medicare, but other insurance, is that patient also REQUIRED to sign an ABN, or is that up to the policy/guidelines of the medical cliic?
I know that UHC (United HealthCare) is implementing a custom ABN in some markets, but I am not sure if it is being launched in all markets in the US.
I LOVE to use an ABN because it gives the practice an opportunity to communicate with the patient about their financial responsibility before the service is rendered. Regardless of whether or not an ABN is required by a payer, I think any time there is a question whether or not a payer will cover a service, an ABN should be issued to help the patient understand the implications of accepting a service. I have a non-Medicare ABN that I am glad to send to anyone who requests it – just send me an email at firstname.lastname@example.org.
What if I am sure something may meet “incident to” for some patients, but not others? ABN’s for the “others” may be appropriate, but how will the carrier know from the code the reason we issued the ABN? I’m worried about never getting denials for services that I don’t think are covered.
I’m not 100% sure I understand the situation, but an ABN is not routinely used in this situation.
Incident-to is a billing situation where the mid-level provider renders the service, but the supervising physician’s NPI is used for billing. In most outpatient settings, mid-level providers (nurse practitioners and physician assistants) are not supposed to see new Medicare patients or established Medicare patients with new problems. The physician sees the patient first and creates a care plan, then in future visits the mid-level provider carries out the care plan.
Each payer has their own requirements for incident-to billing. Some require modifiers and some require very specific supervision.
Regardless of who the payer is, the practice should not put the patient in a situation where the claim may not be paid based on who the provider is. The ABN is to make sure the patient understands and is willing to pay for the service because it is NOT COVERED by the payer. So the ABN is related to the service, not the provider.
I would like to know if there is a booklet that basically is a tabbed index that allows an individual to lookup quickly if an ABN is required. I am trying to get multiple clinics to utilize the ABN form properly and a quick reference booklette would be an awesome way to simplify the whole If this then that process.
This is a good idea, but I am not aware of anyone that has created anything like that.
I have seen some clinics pre-complete the ABNs for each possible scenario and keep them in the exam rooms in folders, and I have also seen them complete all ABNs with all possible services and have the assistant highlight the applicable services.
Other than CMS.GOV for looking up the NCD or LCD (or the local jurisdiction site), when I am seeing a new patient that is not new to medicare (just new to me), how would I determine if a frequency based rule is in place, and therefore that the ABN is required? For example, if the patient comes in asking for a pap smear, how would I know if they already had one within 24 months?
Would I have to actually perform an eligibility check, or is it general practice to just assume that since there is a frequency limitation that I should fill in an ABN?
The ABN is supposed to be used in circumstances when the service might not be covered, so the example you cited is a good one. You may not have prior knowledge of what services the patient has received, so letting them know about the ABN and giving them an opportunity to decline the service is the appropriate step to take.
I would ask the patient first if she’s had a pap smear in the past 24 months and unless she is definitive about absolutely not having one, complete the ABN. As long as Medicare doesn’t see every single patient coming through with the modifier showing you’ve gotten an ABN, you should be fine.
What if we have a signed ABN but the cpt code was billed without the modifier? Can the patient still be held responsible?
Thanks very much,
Yes the patient can be held responsible if they signed the ABN. The patient’s EOB from Medicare may not reflect that this amount is their responsibility to pay the practice, however, and it might be difficult to convince the patient otherwise! You may be wise to resubmit a corrected claim with the modifier, and they will send out a new EOB to the patient.
Could you reference what Medicare documentation states that we may charge our fee and not the Medicare allowable if a service is not approved and an ABN is on file, so that I may show my physician? I assume this means that on the ABN form under “estimated cost” our charges should be listed, not the Medicare allowable?
Here is the language from the Medicare claims manual:
50.7.3 – Effects of Lack of Notification, Medicare Review and Claim Adjudication
(Rev. 2480, Issued: 06-01-12, Effective: 09-04-12, Implementation: 09-04-12)
A. Beneficiary Liability
A beneficiary who has been given a properly written and delivered ABN and agrees to pay may be held liable. The charge may be the supplier/provider’s usual and customary fee for that item or service and is not limited to the Medicare fee schedule. If the beneficiary does not receive proper notice when required, s/he is relieved from liability.
You are correct about listing your charge on the ABN and not the Medicare allowable. Remember, you will not be able to find a Medicare allowable for a non-covered service since Medicare never pays for it!
Can you please tell me if we can bill Medicaid or any other carrier if a ABN was signed or not signed?
Yes, you can bill any provider for services they don’t cover if you want to be sure they are not going to pay for the service before you require the patient to pay. Medicare used to be the only payer that required an ABN, but I know UHC is starting to require it as well.
Can ABN’s be used for ER/Clinic visits? Ex: we had a patient come in to be tested for Hepatitis C because his brother had it. It was explained to the patient how it can be spread, but he still wanted tested. Of course the claim wasn’t paid. Thank you
Yes, the Medicare ABN can be used for any services when you have advised the patient that Medicare will not pay for the service. You may also charge the patient your full charge (this must be listed on the ABN) and collect the full charge at time of visit. If the patient is a non-Medicare patient, you may use a generic ABN (I can send you one I developed) in the same way.
Thank you for the info. I work in an Oral and Maxillofacial Surgery clinic. Our provider is a dual degree (both MD and DDS). He removes skin lesions as well as provides full scope oral surgery services. In regards to dental extractions, do I need an ABN for these services? We do not file teeth extractions to Medicare because it is statutorily excluded. We file to dental ins, should they have it. But, I know if they request we file to Medicare for a denial we must do so. Should we have them sign an ABN? In some cases, the patient does not make us aware they have Medicare, they only present their dental ins card or say they are self pay. I am aware of the narrow exceptions where Medicare where cover a dental service.I do use an ABN for oral lesion and skin lesion biopsies as necessary.
In instances where the service is statutorily excluded, you have the option to have the patient sign an ABN or not. You are not required to file, unless the patient asks you to, which is how you are currently handling it. You may choose to have the patient sign the ABN, both to jog their memory about having Medicare, and to let them know what the service will cost before any dental insurance pays and before any potential self-pay discounts.
Who, in your opinion, is the best professional or individual within an inpt hospital setting to deliver ABNs and obtain patient signatures? What if the patient is incapable of signing and family are fearful that THEY will be billed for a service if they sign the document? I am primarily talking about ABNS for ambulance services at time of discharge from inpt hospital. I work in a large tertiary care center and our pts are from far beyond the “closest facility that can provide the level of care needed”. They want to return closer to home for SNF levels of care, but come to our facility for specialized care. Any thoughts? Thank you!
This is a very tough situation! If the patient is incapable of signing and an authorized representative refuses to sign, the only option that I know of is to try and deliver the ABN to the patients home via mail (or email) and have it signed before the ambulance service brings the patient back to your facility for specialized care.
I suggest that the ABN be communicated during the early discharge phase. The patient is most likely to be in the best shape physically, the authorized representative is most likely signing other paperwork, and it is a more upbeat time for everyone. If the case manager, discharge planner, or a patient accounting representative can perform this, I think any of the three would be acceptable.
Is it required by Medicare to have an ABN signed in order to bill secondary insurance other than a supplement/medigap? In other words, if Medicare denies for non medically necessary and no ABN was obtained, can we bill secondary insurance?
Secondary insurance (not supplemental) can be billed once Medicare denies, and in some cases, the secondary will not pay until the Medicare denial is produced. One example I can think of is a gastric bypass. If Medicare denies the gastric bypass as not medically necessary based on their BMI/co-morbidities guidelines and the secondary insurance will pay based on their BMI/co-morbidities guidelines, the secondary insurance will require the Medicare denial before they pay.
I would suggest that you get the ABN so the Medicare EOB reflects that it is the patient’s responsibility. You can bill the secondary insurance without the ABN, but my rule is – when you know that Medicare is going to deny the service, regardless of any other insurance that is present, get the ABN!
How long does a doctor’s office need to keep the ABN’s the patients sign?
The ABNs are required to be kept for the same amount of time as any other financial document – 7 years. You can, however, keep an electronic copy and shred the original, keeping the electronic copy for 7 years.
Dear Mary Pat,
The chiropractor that I work for just came back from a conference where usage of ABN’s was discussed. He was told that everytime a Medicare patient came in for a new incident requiring treatment (meaning they are not under a treatment plan at this time)that a new ABN must be signed for every incident. Is this correct? I have always had the patient sign a yearly ABN and Procedures Never Covered By Medicare statement and used it for the whole year.
Please guide us in the right direction.
Also, he was told to put the Medicare accepted fees on the ABN-have the guidelines changed or can we still be the full amount?
Thanks so much for any help,
If Medicare will not cover treatment, I advise you to do an ABN for an ongoing treatment plan – for instance, the patient will come in once a month for a year for maintenance visits. Chiropractic maintenance visits, considered preventive/supportive, are non-covered services under Medicare.
If in the midst of the maintenance plan, the patient comes in for an acute issue, or new issue that is not “maintenance”, I advise you to do a new ABN for treatment for the new incident – maybe the patient will need to come in once a week until the issue is resolved. In this case, if manipulation is medically necessary, Medicare will pay for the manipulation but will not pay for the exam or x-rays.
Once the medical issue is resolved, the patient will revert back to the maintenance plan under the original ABN. Remember that you are not REQUIRED to complete an ABN if the service is never covered by Medicare, however, I think this helps the patient understand the financial side of things. The ABN does not commit them to any services, it just advises them of their financial obligations under Medicare rules, and requires that they sign acknowledging their financial obligation.
This is a good practice as it should clarify for the patient the two different plans. Remember that you are not supposed to get a “blanket ABN” by having every single Medicare patient sign an ABN for a monthly maintenance plan at the beginning of the year.
ABNs are used for two purposes. The first is when you know Medicare will not pay and will never pay for the service. In this case, the patient will pay your standard fee in whole, and that amount must be listed on the ABN. Again, if your services are never covered by Medicare, you are not required to get an ABN signed, but you may choose to do so to help the patient understand.
The second situation is when Medicare may or may not pay for the service, so you are making sure the patient understands that if Medicare does not pay, the patient is responsible.
The second is when Medicare might not pay for the service, and you are letting the patient know that they will be responsible for payment of the service if Medicare denies. This is the first time I have heard someone advised to put the amount Medicare will reimburse on the ABN, as that information is not needed if Medicare pays.
Are you aware of any rules by Medicare that would prevent an ABN form from being pre populated with services (check box beside)and reasons why it may not be covered also with a check box so staff can check the appropriate box when discussing with patient?
You absolutely can pre-populate the ABN with services that Medicare will not, or may not cover. Many practices have an ABN pre-printed for each service that requires an ABN, but you can put as many services on the form as will fit. You do have to conform to the official form, and cannot change it to suit your needs.
This is one way that practices can make the ABN process a little easier to implement, as many forget exactly what Medicare won’t cover.
Dear Mary Pat,
I work in a retail pharmacy with DME. When a patient comes in with a prescription for any DME in this case a walker. How would we word the ABN if they choose to purchase the walker outright. The Doctor just wrote the prescription and did not do an actual eval on the patient. We explained to the pt what would be needed in order to bill Medicar and they decided just to purchase it instead of going back to the doctor. So in this case we would want to do an ABN?
There is no need to get an ABN if the insurance is not going to be filed. The ABN is only for you to let Medicare know if they do not pay for something, that the patient has indicated their willingness to pay in full for the service or article.
The ABN protects you from the patient saying “I wouldn’t have gotten it if I had known Medicare wasn’t going to pay for it.” and “I refuse to pay for this.”
Is it acceptable for patients to write in and initial qualifiers? Example: when pt has both Medicare & Medicaid. Pt writes ” if my insurance is not going to pay/ is unlikely to pay, I will not be responsible ”
Or, in an out pt surgery setting, when presented with ABN, a patient states she does not believe she has complete information or full understanding , writes ” signed under duress ” alongside signature
The ABN is a yes or no proposition. Patients can either accept that the service may not be covered and they will have to pay for it themselves, or they can reject the service.
It is not appropriate to present the ABN to the patient at outpatient surgery – the financial discussion should have taken place and the ABN presented at the time the surgery was scheduled.
Of course, I don’t know what the services were that were being presented, but it sounds like maybe the ABN is being used out of context.
Glad I found your article! Question pertains to retail pharmacy and is two fold:
1) Can a pharmacy accept assignment on one part B product (i.e. test strips) and deny billing medicare B on a second product (i.e. insulin for pump) for the same patient? If so, are we allowed to bill the second product for any other patients’ insurances?
2) If we accept assignment to bill to medicare a product which we will be reimbursed below our cost, can we utilize an ABN in this situation to collect additional dollars to cover our cost?
The insulin issue has been a hotbed topic in our city, as many pharmacies have been refusing this service. I want to make sure if I choose to provide it, we can recoup our costs at minimum.
These are great questions!
I assume you are enrolled in Medicare, but are not a participating provider. If you are a participating provider, you must accept assignment on everything that Medicare Part B covers (see list below relating to diabetes.) If you are not a participating provider, you may accept assignment on a claim-by-claim basis, so you could file one claim accepting assignment on one product and one claim not accepting assignment on another product. If you do not accept assignment and therefore collect payment in from the patient, you may not collect any additional amount from a second insurance. The patient, however, may recoup some of their out-of-pocket by filing their own secondary insurance (with information you supply) once Medicare reimburses them.
You cannot use an ABN to bill the patient what Medicare only partially covers. The ABN may only be used to collect from patients what Medicare does not cover at all due to medical necessity, frequency limitations, or statutory noncoverage.
Medicare covers certain supplies if a beneficiary has Medicare Part B and has diabetes. These supplies include:
• Blood glucose self-testing equipment and supplies;
• Therapeutic shoes and inserts; and
• Insulin pumps and the insulin used in the pumps
Blood glucose self-testing equipment and supplies are covered for all people with Medicare Part B who have diabetes. This includes those who use insulin and
those who do not use insulin. These supplies include:
• Blood glucose monitors;
• Blood glucose test strips;
• Lancet devices and lancets; and
• Glucose control solutions for checking the accuracy of testing equipment and test strips.
Medicare Part B covers the same type of blood glucose testing supplies for people with diabetes whether or not they use insulin. However, the amount of supplies
that are covered varies.
If the beneficiary
• Uses insulin, they may be able to get up to 100 test strips and lancets every month, and 1 lancet device every 6 months.
• Does not use insulin, they may be able to get 100 test strips and lancets every 3 months, and 1 lancet device every 6 months.
If a beneficiary’s doctor documents why it is medically necessary, Medicare will cover additional test strips and lancets for the beneficiary. Medicare will only cover a beneficiary’s blood glucose self-testing equipment and supplies if they get a prescription from their doctor.
Their prescription should include the following information:
• That they have diabetes;
• What kind of blood glucose monitor they need and why they need it (i.e., if they need a special monitor because of vision problems, their doctor must
• Whether they use insulin; and
• How often they should test their blood glucose.
A beneficiary needing blood glucose testing equipment and/or supplies:
• Can order and pick up their supplies at their pharmacy;
• Can order their supplies from a medical equipment supplier, but they will need a prescription from their doctor to place their order; and
• Must ask for refills for their supplies.
Keep in mind that when you accept assignment, the Medicare check comes to you, and when you don’t accept assignment, the check goes to the patient and you must collect the allowed amount in full (called the “limiting” charge) from the patient.
A lot of our patients have Medicare as primary and Medicaid as secondary payer. If an ABN is signed for a non covered charge, can we bill the patient even though they have state coverage as secondary? It is my impression that we do not bill Medicaid patients for anything ever so does an ABN make this lawful? Thank you so much for your time!
You cannot use an ABN in the case of a dual eligible – Medicare + Medicaid coverage – for most routine services if they are covered by one payer or the other.
The exception to this would be in the provision of a service that neither payer covers. I am not sure if there might be a case where a dual eligible patient wanted fertility services, but that would not be covered by either Medicare or Medicaid and so an ABN could be issued with payment in full due at time of service.
Thanks so much for this article. I am trying to help my parents understand the ABN that my mom signed (and forgot she signed). This is my first encounter with one. I understand that physicals are not regularly covered so it is more of a courtesy for the office to issue an ABN. The part that is confusing to me is they listed four possible types of physicals (annual, new pt, GYN only annual and GYN only new pt) under part D and nothing at all under part E. Is this ok on an ABN or do they need to list only the specific service that patient is having? Also since this is a courtesy as opposed to a requirement, does it matter that it was not filled in completely? My mom claims that no one ever explained that medicare might not cover this so she is quite upset to be receiving a bill. But then, she also swore she never signed anything and she did… 🙂
You are right that giving an ABN for a non-covered service is a courtesy, but how much of a courtesy is it if your mom didn’t understand what she was being given? For the situation where the ABN is required, if more than one service is listed, the service that the patient chooses is circled or checked and the price is also circled or checked. If it is a service that Medicare MIGHT cover, the reason Medicare would not cover it must be listed on the form.
It sounds as if this practice is mixing the regular physical, a service that Medicare never covers, with the gynecologic exam, a service that Medicare covers at different intervals based on need.
The four types of physicals this practice is referring to are:
– a complete physical – head to toe – for a new patient (Medicare never covers)
– a complete physical – head to toe – for an established patient (Medicare never covers)
– a gynecologic-only exam for a new patient (Medicare covers a pelvic & Pap once every 24 months for all women, more often if necessary)
– a gynecologic-only exam for an established patient (Medicare covers a pelvic & Pap once every 24 months for all women, more often if necessary)
I can understand why your mom is confused – this is confusing to me too. I’d recommend (if they asked me!) that the practice list the four services on two separate ABNs – one for the “never covered services” and one for the “sometimes covered services.”